ITO 32(1)(2), MUMBAI V. ASHISH P. SHAH, MUMBAI

ITA 4686/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3371 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 18-08-2015
• Court: TRIBUNAL
• Department Lawyers: MAHUA SARKAR
• Keywords: Difference of opinion; Change of opinion
• Section: 133(6)

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.4686/MUM/2015 ASSESSMENT YEAR: 2007-08 INCOME TAX OFFICER-32(1)(2), ROOM NO.204, BLDG. NO. C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 / VS. SHRI ASHISH P. SHAH, 44, RADHASHYAM APARTMENT BEHIND BURFIWALA LANE, ANDHERI(W), MUMBAI-400058 / REVENUE / ASSESSEE P.A. NO . ANZPS9797E $ % & / REVENUE BY MS. MAHUA SARKAR -DR $ % & / ASSESSEE BY NONE / DATE OF HEARING 31/08/2016 & / DATE OF ORDER: 01/09/2016 ITA NO.4686/MUM/2015 ASHISH P. SHAH 2 & / O R D E R THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 15/06/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED PERTAINS TO DELETING THE ADD ITION OF RS.30,17,415/- WITHOUT APPRECIATING THE FACT THAT T HE SAID TRANSACTIONS DO NOT FIND MENTION IN THE AUDITORS R EPORT AND THE CONFIRMATION RECEIVED FROM THE PARTIES WERE REP LIES ONLY AND NOT WITH RESPECT TO SQUARING UP OF LOAN. 2. DURING HEARING, THE LD. DR, MS. MAHUA SARKAR, DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER BY CONTENDING THAT THE RELIEF WAS GRANTED BY THE FIRST APPELLATE AUTHORITY WITHOUT CONSIDERING THE FACTUAL MATRIX AN D EVEN THE TRANSACTIONS DO NOT FIND MENTION IN THE REPORT OF THE AUDITOR. 2.1. ON THE OTHER HAND, NONE WAS PRESENT FOR THE ASSESSEE IN SPITE OF ISSUANCE OF REGISTERED AD NOTI CE ISSUED TO THE ASSESSEE. THE ASSESSEE NEITHER PRESENTED HIMSEL F NOR MOVED ADJOURNMENT PETITION. IT SEEMS THAT THE ASSES SEE IS NOT INTERESTED TO PURSUE THE APPEAL FILED BY THE RE VENUE, THEREFORE, I HAVE NO OPTION BUT TO PROCEED EX-PARTE , QUA THE ASSESSEE, AND TEND TO DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.2. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR A ND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FAC TS, IN BRIEF, ARE THAT THE ASSESSEE IS RUNNING A PROPRIETARY BUSI NESS IN THE ITA NO.4686/MUM/2015 ASHISH P. SHAH 3 NAME OF MITTAL TRANSPORT, WHICH HE UNDERTAKES AS A SUB- CONTRACTOR FOR SUPPLYING BUILDING MATERIALS. THE A SSESSEE SHOWED TO HAVE MADE PURCHASES FROM THREE PARTIES NA MELY TUSHAR RUPAREL PROP. M/S FORUM TRADERS, MS. NEELIMA RUPAREL, PROP. M/S NILAM ENTERPRISES AND M/S V.S. K . ENTERPRISES. THE ASSESSEE ALSO MADE CERTAIN OTHER TRANSACTIONS FROM THESE PARTIES. A SHOW CAUSE NOTIC E WAS ISSUED TO THE ASSESSEE TO WHICH THE ASSESSEE CLAIME D THAT THE SAID SQUARED UP LOANS WERE TAKEN BY THE ASSESSEE FR OM THESE PARTIES. FROM THE AUDITORS REPORT, IT WAS NOTICED THAT NO SUCH LOANS WERE SQUARED UP/TAKEN BY THE ASSESSEE. I N RESPONSE TO NOTICES U/S 133(6) OF THE ACT, THE LD. ASSESSING OFFICER GOT THE CONFIRMATION FROM THESE PARTIES BUT MERELY ON THIS TECHNICAL FLAW, ADDITION WAS MADE. 2.3. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEAL), THE ADDITION WAS DELETED. THE RELEVAN T FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS REPR ODUCED HEREUNDER FOR READY REFERENCE:- I HAVE GONE THROUGH THE FACTS OF THE CASE. IT IS A FACT THAT THE APPELLANT IS A BUILDING MATERIAL SUPPLIER AND HAS PURCHASE TRANSACTIONS WITH THE 3 PARTIES WHICH ARE M/S.TUSA R RUPAREL (HUF), PROP. M/S. FORAM TRADERS, MS. NEENMA RUPAREL PROP. M/S NEERAM ENTERPRISES AND M/S.TUSHAR RUPAREL, PROP .VSK ENTERPRISES. IN THE BANK STATERNENT OF THE ASSESSEE , THERE ARE FURTHER TRANSACTIONS OF RECEIPTS AND PAYMENTS BACK TO THE SAID 3 PARTIES OVER AND ABOVE THE PURCHASES THAT HAS BEE N DECLARED IN ,THE BOOKS OF ACCOUNTS. THE A.D. HAS HE LD THAT SINCE THE SAID TRANSACTIONS BEING LOANS TAKEN AND G IVEN BACK IS NOT MENTIONED IN THE TAX AUDIT REPORT, THEN THE SAME WOULD CONSTITUTE ALSO AS BUSINESS TRANSACTION AND HAS, TH EREBY CALCULATED THE PROFIT @ 8% OF THE TOTAL RECEIPT AND BROUGHT THE SAME TO TAX. ITA NO.4686/MUM/2015 ASHISH P. SHAH 4 WHILE IT IS A FACT THAT THE SAID SQUARE OFF OF LOA N DOES NOT FIND MENTION IN THE TAX AUDIT REPORT AND TO THAT EXTENT THE TAX AUDIT REPORT IS DEFECTIVE/INCOMPLETE, IT ALSO HOWEVER REM AINS A FACT THAT THE 3 PERSONS. HAVE CONFIRMED THE SAID TRANSAC TIONS TO BEING THE NATURE OF LOANS GIVEN AND (RECEIVED BACK DURING THE YEAR . IT IS NOT THE-CASE OF THE A.O. THAT THE SAID MONEY HAS BEEN ADVANCED BY THESE 3 PERSONS OR REPAID BACK BY THE APPELLANT FROM ANY UNACCOUNTED SOURCES AND NEITHER IS IT THE CASE OF THE A.D. THAT THERE IS A DIFFERENTIAL OF EV EN A PENNY IN WHAT THE APPELLANT HAS REPAID AS SAID AMOUNTS. THER EFORE, IN LIGHT OF ONLY THE FACT THAT THE SAID TRANSACTIONS D O NOT FIND MENTION IN THE AUDITOR'S REPORT, REJECTING THE BOOK S OF ACCOUNTS AND THEREBY ESTIMATING INCOME WOULD BE PRESUMPTIVE LOGIC NOT BORNE BY THE FACTS AND CIRCUMSTANCES OF THE CASE. T HEREFORE, IN LIGHT OF THIS OBSERVATION THE ADDITION MADE BY T HE A.D. BY TREATING THE SAID ,AMOUNT AS PERTAINING TO BUSINESS TURNOVER IS HEREBY DELETED. THE APPELLANT GETS RELIEF OF RS.30, 17,145/-. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LE ADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, IT IS NOTICED THAT THE ASSESSEE DULY ENTERED INTO LOAN TRANSACTIONS WITH THESE PARTIES AND ALSO FILED LOAN CONFIRMATIONS THAT TO IN RESPONSE TO NOTICES ISSUED U/S 133(6) OF THE ACT TO THE RESPECTIVE PARTY. NO EVID ENCE WAS PRODUCED ON RECORD ON THE BASIS OF WHICH, THESE CAN BE TREATED AS SALES. NO NEW MATERIAL WAS BROUGHT ON RE CORD EVIDENCING THAT ANY INCOME HAS ESCAPED. THE LD. ASS ESSING OFFICER HAS MADE THE ADDITION MERELY ON THE BASIS O F NON- MENTIONING OF THESE LOANS IN THE AUDITORS REPORT. HOWEVER, THE AUDITOR HIMSELF GAVE IN WRITING STATING THAT TH ERE WAS INADVERTENT ERROR ON HIS PART AND THE LOANS WERE IN FACT IN EXISTENCE. CONSIDERING THE FACTUAL MATRIX AND THE D ECISION IN ITA NO.4686/MUM/2015 ASHISH P. SHAH 5 CIT VS THE SIMBHAOLI SUGAR MILLS LTD. 2011-TIOL-293 (DEL.), THE HON'BLE DELHI HIGH COURT HELD THAT REOPENING ON THE BASIS OF OPINION FORMED BY THE AUDITOR CANNOT BE SA ID TO BE VALID AT IT AMOUNTS TO CHANGE OF OPINION. I HAVE PE RUSED THE FACTS VERY CAREFULLY AND FOUND NO INFIRMITY IN THE IMPUGNED ORDER, THEREFORE, THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 31/08 /2015. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 01/09/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * / THE CIT, MUMBAI. 4. ) ) * / CIT- , MUMBAI 5. +,- ' , ) '#$ ' / , / DR, ITAT, MUMBAI 6. -0 1$ / GUARD FILE. & / BY ORDER, (+# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI