ITO 7(3)2, MUMBAI V. M/S. UDAIPUR TREASURE MARKET CITY PVT. LTD., MUMBAI

ITA 471/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84365 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 26-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Assessee Lawyers: APURV GANDHI
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence
• Section: 143(3); 68

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNALF BENCH, MUMB AI , , ,, , , ,, , ! ' BEFORE SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARORA, AM ITA NOS.471/MUM/2011 ASSESSMENT YEARS-2007-08 INCOME-TAX OFFICER-7(3)2, ROOM NO.616, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-400020 # # # # / VS. M/S UDAIPUR TREASURE MARKET CITY PVT LTD. IEWPDL, G-16, GROUND FLOOR, R.R. HOSESJERY BLD. SHRI LAXMI WOLLEN MILL COMPOUND, OPP. SHAKTI MILL COMPOUND, OFF. DR.E. MOSES ROAD, MAHALAXMI, MUMBAI-400011 $ ! ./ PAN :AAACU8782C ( / REVENUE ) .. ( %&$' / RESPONDENT ) ( ) / REVENUE BY: SHRI PAWAN KUMAR BEERLA %&$' ( ) / RESPONDENT BY : SHRI APURV GAN DHI # ( *+! / DATE OF HEARING 26/11/2014 ,- ( *+! / DATE OF PRONOUNCEMENT : 26/11/2014 . / O R D E R PER JOGINDER SINGH, JM: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 21/09/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, ON THE GROUND WHETHER THE LD. COMMISSIONER OF INCOME T AX 2 M/S UDAIPUR TREASURE MARKET CITY PVT LTD.. (APPEALS) WAS RIGHT IN ACCEPTING NEW EVIDENCE IN CONTRAVENTION OF RULE 46A OF INCOME-TAX RULES, 1962 , EVEN THOUGH THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUN TS AND AUDITORS CERTIFICATE BEFORE THE ASSESSING OFFICER. 2. AT THE TIME OF HEARING, LD. DR, SHRI PAWAN KUMA R BEERLA DEFENDED THE CONCLUSION DRAWN IN THE ASSESSM ENT ORDER BY ASSERTING THAT THE LD. COMMISSIONER OF INC OME TAX (APPEALS) ADMITTED ADDITIONAL EVIDENCE CONTRAVENING RULE 46A OF THE INCOME-TAX RULES. IT WAS ALSO SUBMITTED THA T THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS AND AUDI TORS CERTIFICATE DURING ASSESSMENT PROCEEDINGS. THUS, I T IS A VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AS THE AS SESSING OFFICER WAS NOT PROVIDED OPPORTUNITY. ON THE OTHER HAND, SHRI APURV GANDHI, LD. COUNSEL FOR THE ASSESSEE DEF ENDED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER BY SUBMITTED THAT THERE IS NO CONTRAVENTION OF RULE 46A AS THE ADDITI ONAL EVIDENCE, FILED BEFORE THE LD. COMMISSIONER OF INCO ME TAX (APPEALS), WAS DULY SENT TO THE ASSESSING OFFICER F OR HIS COMMENT AND IN TURN THE ASSESSING OFFICER SEND THE REMAND REPORT WHICH WAS DULY CONSIDERED. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BR IEF, ARE THAT ASSESSEE IS A PRIVATE LIMITED COMPANY, DECLARED NIL INCOME. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCO ME-TAX ACT,1961 (HEREINAFTER THE ACT) ASSESSING THE INCOME AT RS.11,14,00,000/- . THE ASSESSEE RECEIVED LOAN OF RS.11 3 M/S UDAIPUR TREASURE MARKET CITY PVT LTD.. CRORES FROM ITS HOLDING COMPANY I.E. EWDPL INDIA PV T. LTD. APART FROM THIS LOAN, THE HOLDING COMPANY (EWDPL) A LSO MADE PAYMENT OF RS.7 CRORES TO DELHIWALA REAL ESTAT E PVT. LTD. ON BEHALF OF THE ASSESSEE. THE SAID AMOUNT WAS SUBSEQUENTLY REPAID BY THE ASSESSEE TO EWDPL. THUS , AN AMOUNT OF RS.18 CRORES WAS RECEIVED FROM EWDPL AND AFTER CONSIDERING THE PAYMENT OF RS.7 CRORES MADE BY THE ASSESSEE AN AMOUNT OF RS.11 CRORES REMAINED OUTSTANDING AS O N 31/03/2007. THE SAID AMOUNT WAS DISCLOSED AS LOAN FROM HOLDING COMPANY IN SCHEDULE-2, RELATING TO UNSECUR ED LOAN, IN THE ACCOUNTS OF THE ASSESSEE, LIKEWISE, THE AMOU NT OF RS.11 CRORES, DUE FROM THE ASSESSEE, WAS INCLUDED UNDER T HE HEAD LOAN TO SUBSIDIARY COMPANIES IN SCHEDULE-9, RELAT ING TO LOAN AND ADVANCES, IN THE ACCOUNTS OF HOLDING COMPANY. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED CONF IRMATION FROM THE HOLDING COMPANY ALONGWITH LEDGER ACCOUNT O F THE ASSESSEE IN THE BOOKS OF THE HOLDING COMPANY. THE ASSESSEE AS WELL AS HOLDING COMPANY MAINTAINED SEPARATE ACCO UNTS IN THEIR BOOKS PERTAINING TO ADVANCES AS LOAN AND AMOU NT PAID ON BEHALF I.E. THE AMOUNT OF RS.11 CRORES & 7 CRORE S WERE SEPARATELY MAINTAINED. THE LD. ASSESSING OFFICER M ADE ADDITION OF RS.7 CRORES TO THE TOTAL INCOME OF ASSE SSEE U/S 68 OF THE ACT AS UNEXPLAINED CREDIT ON THE GROUND THAT IN THE NOTES TO THE ACCOUNTS OF THE HOLDING COMPANY, THE A MOUNT OF UNSECURED LOANS ADVANCED WAS SHOWN AT RS.18 CRORES. ON 4 M/S UDAIPUR TREASURE MARKET CITY PVT LTD.. APPEAL, THE LD. CIT(A) DECIDED IN FAVOUR OF THE ASS ESSEE AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 2.2. HOWEVER, BEFORE US, THE ONLY GROUND RAISED BY THE REVENUE PERTAINS TO ONLY CONTRAVENTION OF RULE 46A OF THE INCOME-TAX RULES, THEREFORE, WE ARE PROCEEDING TO D ISPOSE OF THE APPEAL LIMITED TO THE GROUND RAISED BEFORE US. WE NOTE THAT BEFORE THE LD. COMMISSIONER OF INCOME TAX (APP EALS) ADDITIONAL EVIDENCE WAS FILED BY THE ASSESSEE WHICH WAS REMANDED TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER DID NOT POINTED OUT ANY SPECIFIC DISCREPANCY WITH RESPECT TO THE BOOKS OF THE ASSESSEE VIS--VIS EWDPL INDIA (P.) LTD. AFTER MAKING NECESSARY VERIFICATION FROM BOOKS OF ACCOUNTS, BANK STATEMENTS OF THE CONCERNED PARTI ES. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THERE IS NO CONTRAVENTION OF RULE 46A OF THE RULES AS HAS BEEN CANVASSED BY THE LD. DR, CONSEQUENTLY, WE FIND NO INFIRMITY I N THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITH RESPECT TO THE GROUND RAISED BEFORE US. SINCE, NO GROUND WAS RAISED BY THE REVENUE UPON THE MERIT OF THE CASE AND JUSTIFICATION FOR DELETING THE ADDITION MA DE U/S 68, WE REFRAIN OURSELVES TO COMMENT UPON THE SAME. FIN ALLY, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE WITH RES PECT TO THE GROUND RAISED. THE STAND OF THE LD.CIT(A) IS AFFIR MED WITH RESPECT TO THE IMPUGNED GROUND. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. 5 M/S UDAIPUR TREASURE MARKET CITY PVT LTD.. THIS ORDER WAS PRONOUNCED, IN THE OPEN COURT, IN TH E PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING, ON 26 TH NOVEMBER, 2014. SD/- SD/- (SANJAY ARORA) ( JOGINDER SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI; /# DATED.- 26/11/2014 F{X~{T? P.S/. # . . . . . . ( (( ( %*0 %*0 %*0 %*0 1 0-* 1 0-* 1 0-* 1 0-* / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. %&$' / THE RESPONDENT. 3. 2 ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. 2 / CIT CONCERNED, MUMBAI 5. 03 %*# , , / DR, ITAT, MUMBAI E BENCH 6. 45 6 / GUARD FILE. .# .# .# .# / BY ORDER, &0* %* //TRUE COPY// 7 77 7 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI.