ITO 8(2)-4, MUMBAI V. PISHO ENTERPRISES P.LTD, MUMBAI

ITA 472/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5764 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Keywords: Corroborative evidences
• Section: 68

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL C CC C BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.472/M/201 472/M/201 472/M/201 472/M/2011 11 1 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2007-08) ITO-8(2)-4, ROOM NO. 213/216A, 2 ND FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 % % % % / VS. M/S PISHO ENTERPRISES PVT. LTD. D/18, 702, YAMUNA NAGAR, OSHIWARA, ANDHERI (W) MUMBAI-400053 #' ! ./ ( ./ PAN/GIR NO. :AADCP5163F ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) $% $%$% $% ,- ,- ,- ,- . / . / . / . / /ASSESSEE BY : NONE # # # # . / . / . / . / / REVENUE BY : SMT. PARMINDER % % % % . .. . -! -! -! -! / DATE OF HEARING : 7 TH JANUARY 2014 01& 01& 01& 01& . .. .-! -! -! -! /DATE OF PRONOUNCEMENT: 17 TH JANUARY 2014 ' 2 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 15.10.2010 OF COMMISSIONER OF INCOME TAX(APPEALS) F OR THE ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS IN THIS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 68 AMOUNTING TO ` 3,80,000/- ON ACCOUNT OF SHARE CAPIT AL AND OF ` 89,09,000/- ON ACCOUNT OF UNSECURED LOANS WITHOUT A PPRECIATING THE FACT THAT THE ASSESSEE NEITHER AT ASSESSMENT PR OCEEDINGS NOR AT APPELLATE PROCEEDINGS HAD FURNISHED ANY PROOF TO DISCHARGE ITA NO.472/M/2012 PISHO ENTERPRISES PVT. LTD. 2 THE ONUS PUT ON IT TO SUBSTANTIATE THE GENUINENESS OF THESE CREDITS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 26,28,934/- BEING 10% OF THE SALES ADOPTED BY THE A.O AS THE AS SESSEES PROFIT AND REJECTING THE ASSESSEES CLAIM OF LOSS O F ` 23,07,851/- WITHOUT APPRECIATING THE FACT THE ASSESSEE COMPANY HAD NOT SUBSTANTIATED ITS CLAIM OF VARIOUS EXPENSES WITH AN Y SUPPORTING EVIDENCE IN SPITE OF ADEQUATE OPPORTUNITY GIVEN TO IT. 3. NOBODY HAS APPEARED ON BEHALF OF THE ASSESSEE RE SPONDENT DESPITE THE REPEATED NOTICES DULY SERVED ON THE ASSESSEE. A CCORDINGLY, WE PROPOSE TO HEAR AND DISPOSED OFF THIS APPEAL EX-PAR TE. 4. GROUND NO. 1 REGARDING ADDITION U/S 68. WE HAVE HEARD THE LD. D.R AND CAREFULLY PERUSED THE RELEVANT RECORD. THE LD. D.R HAS SUBMITTED THAT THE CIT(A) HAS DECIDED THE ISSUE OF ADDITION OF U/S 68 WITHOUT GOING INTO THE FACTS AND ONLY BY FOLLOWING THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS 216 CTR 195. THE LD. D.R HAS SUBMITTED THAT THE ASSESSEE DID NOT FURNISH THE RELEVANT INFO RMATION AND RECORD BEFORE THE ASSESSING OFFICER IN SUPPORT OF ITS CLAI M AND THE CIT(A) WITHOUT EXAMINE THE RECORD AS ALLOWED THE CLAIM OF THE ASSE SSEE. HE HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CA SE OF CIT VS NIPUN BUILDERS AND DEVELOPERS PVT. LTD. 350 ITR 407 AND S UBMITTED THAT THE HONBLE DELHI HIGH COURT AFTER CONSIDERING THE DECI SION OF HONBLE SUPREME COURT IN CASE OF CIT VS LOVELY EXPORTS (SUP RA) AS DECIDED THE ISSUE IN CASE OF PRIVATE LIMITED COMPANY AGAINST TH E ASSESSEE. 5. WE NOTE THAT THE A.O HAS CATEGORICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESSEE WAS GIVEN VARIOUS OPPORTUNI TY BY ISSUING THE ITA NO.472/M/2012 PISHO ENTERPRISES PVT. LTD. 3 REMINDER NOTICES AND EVEN AFTER GIVING A LAST AND F INAL OPPORTUNITY NOBODY ON BEHALF OF THE ASSESSEE APPEARED BEFORE THE A.O. ACCORDINGLY, THE ASSESSMENT WAS FRAMED U/S 144(1) OF THE INCOME TAX ACT. WE FURTHER NOTE THAT THE CIT(A) DECIDED THE ISSUE WITHOUT ANALYZING AND EXAMINING THE RELEVANT RECORD BECAUSE NO SUCH RECORD WAS AVAILABL E WITH A.O AS NOBODY HAS APPEARED DESPITE VARIOUS OPPORTUNITIES GIVEN. W E FURTHER NOTE THAT AS REGARDS THE ADDITION IN RESPECT OF SHARE CAPITAL IN CASE OF PRIVATE LIMITED COMPANY THE LATEST DECISION OF DELHI HIGH COURT IN CASE OF CIT VS NIPUN BUILDERS AND DEVELOPERS PVT. LTD. (SUPRA) IS RELEVA NT ON THE POINT. DESPITE THE ASSESSMENT ORDER WAS PASSED U/S 144, THE CIT(A) WITHOUT ISSUING ANY REMAND ORDER OR EXAMINATION OF THE RELEVANT MATERIA L DECIDED THE ISSUE IN SUMMARY IN PARA 3.3 AS UNDER: 3.3 THE SUBMISSION HAS BEEN CONSIDERED. THE SHARE CAPITAL INTRODUCED IN EARLIER YEAR CANNOT BE ADDED U/S 68 A S THE SECTION ONLY RELATES TO FRESH CREDITS DURING THE YEAR. MAJO R PORTION OF LOANS FROM DIRECTORS WERE CARRIED FORWARD FROM EARL IER YEAR. NOTHING HAS BEEN BROUGHT ON RECORD TO DISPROVE THES E LOANS. MOREOVER IN VIEW OF DECISIONS IN CIT VS LOVELY EXPO RTS 216 CTR 195 (SC), CIT VS DIVINE INVESTMENTS 299 ITR 268 AND VENKATESHWARA ISPAT (P) LTD. 319 ITR 393 (P&H) SUCH CREDITS CANNOT BE ASSESSED IN THE APPELLANTS HANDS. IN THE CIRCUMSTANCES THE ADDITION OF ` 92,89,000/- IS DELE TED. 6. THUS, IT IS CLEAR THAT THIS ISSUE REQUIRES A PRO PER EXAMINATION AND VERIFICATION OF FACTS. ACCORDINGLY, IN THE INTEREST OF JUSTICE WE SET ASIDE THIS ISSUE TO THE RECORD OF THE CIT(A) FOR PROPER EXAMIN ATION AND VERIFICATION OF THE FACTS AND DECIDE THE SAME BY CONSIDERING THE DE CISION IN CASE OF CIT VS NIPUN BUILDERS AND DEVELOPERS PVT. LTD. (SUPRA) AS RELIED UPON BY THE LD. D.R. ITA NO.472/M/2012 PISHO ENTERPRISES PVT. LTD. 4 7. GROUND NO. 2 REGARDING ADDITION BEING 10% OF SAL ES ADOPTED BY THE A.O AS PROFIT OF THE ASSESSEE. THE A.O HAS NOTED TH AT THE NATURE OF BUSINESS OF THE ASSESSEE APPEARS TO BE RESTAURANT S ALES AND HENCE NET PROFIT WAS ESTIMATED AT 10% OF SALES AMOUNTING TO ` 3,21,082. ON APPEAL, THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE B USINESS OF THE ASSESSEE WAS MULTIMEDIA SOFTWARE AND 3D ANIMATION A CCORDINGLY THE CIT(A) DELETED THE ADDITION. 8. THE LD. D.R HAS SUBMITTED THAT THE A.O HAS MADE THE ADDITION FOR WANT OF DETAILS OF THE EXPENSES, VOUCHER BILLS ETC. THE CIT(A) WITHOUT EXAMINING OF THE RELEVANT DETAILS VOUCHERS, BILLS E TC. HAS ALLOWED THE CLAIM OF THE ASSESSEE THEREFORE, THE ISSUE HAS TO BE EXAM INED IN THE LIGHT OF THE NECESSARY DOCUMENTS AND DETAILS. 9. HAVING CONSIDERED THE SUBMISSIONS OF THE LD. D.R AND CAREFUL PERUSAL OF ORDERS OF THE AUTHORITIES BELOW WE NOTE THAT THE A.O MADE THE ADDITION BECAUSE THE RELEVANT DETAILS, VOUCHERS, BI LLS OF THE EXPENSES ARE NOT FURNISHED BY THE ASSESSEE. THE CIT(A) HAD DELET ED THE ADDITION BY RECORDING THE FACT THAT THE NATURE OF BUSINESS OF T HE ASSESSEE IS NOT RESTAURANT SALES BUT IT WAS MULTIMEDIA SOFTWARE AND 3D ANIMATION. THE CRUCIAL ASPECT OF THE ISSUE OF NON-FURNISHING OF TH E DETAILS VOUCHERS, BILLS ETC. HAS NOT BEEN EXAMINED BY THE CIT(A). ACCORDING LY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT T HE ISSUE HAS NOT BEEN PROPERLY EXAMINED BY THE AUTHORITIES BELOW. THE A.O DID NOT EXAMINING THE ISSUE AS NOBODY HAS APPEARED ON BEHALF OF THE A SSESSEE AND THEREFORE, THE RELEVANT DETAILS AND MATERIAL WAS NO T FURNISHED WHEREAS THE ITA NO.472/M/2012 PISHO ENTERPRISES PVT. LTD. 5 CIT(A) HAS NOT GONE INTO THE ISSUE ON MERITS. HENCE , WE SET ASIDE THIS ISSUE TO THE RECORD OF THE CIT(A) TO DECIDE THE ISS UE AFRESH AFTER PROPER VERIFICATION AND EXAMINATION OF THE RELEVANT RECORD . 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JANUARY 2014 SD/- SD/- ( . ) ! '# (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 17 TH JANUARY 2014 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI