ACIT CIR 15(2), MUMBAI V. ABEE ASSOCIATES, MUMBAI

ITA 4750/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92675 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 08-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-06-2010
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.4750/M/2010 (AY:2006 - 2007 ) ASST. CIT 15(2), R.NO.113, MATRU MANDIR, TARDEO, MUMBAI 400 008. / VS. M/S. ABEE ASSOCIATES, PLOT NO.703, PARK PARADISE, KAYBEE CHS LTD., NEAR SHANTIVAN, MHB COMPLEX, OSHIWARA ANDHERI (W), MUMBAI. ./ PAN : AAKFM 3568 K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI JEEVAN LAL LAVIDIYA / RESPONDENT BY : NONE / DATE OF HEARING : 08.06.2015 / DATE OF PRONOUNCEMENT : 08.06.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 8.6.2010 IS AGAINST THE ORDER OF THE CIT (A) - 26, MUMBAI DATED 5.4.2010 FOR THE ASSESSMENT YEAR 2006 - 2007. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE ON ACCOUNT OF DISALLOWANCES OF RS. 22,72,598/ - MADE BY THE AO, BY IGNORING THE FACTS THAT NO AUTHENTIC EVIDENCE WAS PRODUCED BY THE ASSESSEE, IN SUPPORT O F THESE EXPENSES, BEFORE THE AO OR BEFORE THE CIT (A). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSE E ON ACCOUNT OF DISALLOWANCES OF RS. 22,72,598/ - MADE BY THE AO, BY IGNORING THE FACTS THAT ALL THESE EXPENSES WERE INCURRED IN CASH AND ONLY SELF MADE VOUCHERS WERE PRODUCED BY THE ASSESSEE, AND THEREFORE, THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS FOR CLAIMING THESE EXPENSES. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD CIT (A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE ON ACCOUNT OF DISALLOWANCES OF RS. 22,72,598/ - MADE BY THE AO, BY GROSSLY IGNORING THE FACTS THAT NO CONSTRUCTION ACTIVITY HAS TAKEN PLACE DURING THE YEAR AND IF SUCH EXPENSES WERE GENUINELY CLAIMED, THESE MUST HAVE BEEN INCLUDED IN THE CLOSING STOCK. REVENUE ALSO RAISED THE ADDITIONAL GROUND AS UNDER: 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN ALLOWING THE RELIEF ON THE BASIS OF ADDITIONAL EVIDENCE LIKE BANK STATEMENT AND TRANSPORTATION BILLS, WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER, FOR HIS COMMENTS AS PER RULE 46A OF THE INCOME TAX RULES, 1962. 2. IN THIS APPEAL, REVENUE RAISED AN ISSUE RELATING TO DELETION OF DI SALLOWANCE OF RS. 22,72,598/ - . BRIEFLY STATED, RELEVANT FACTS IN THIS REGARD ARE THAT THE ASSESSEE IS ENGAGED IN CONSTRUCTION BUSINESS AND FILED THE RETURN OF INCOME DECLARING LOSS OF RS. 2.75 LAKHS. ASSESSMENT WAS COMPLETED U/S 143(3)(II) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 35,85,022/ - . IN THE ASSESSMENT, AO MADE ADDITION OF RS. 33,10,016/ - BY TREATING ERRONEOUSLY THE LOSS OF RS. 2,75,006/ - AS POSITIVE INCOME AND QUANTIFIED THE ASSESSED INCOME AT RS. 35,85,022/ - . AO MADE DISALL OWANCES ON ACCOUNT OF VARIOUS EXPENSES FOR WANT OF EVIDENCE AND VOUCHERS. PARA 4 OF THE ASSESSMENT ORDER IS RELEVANT FOR THE ADDITION OF RS. 23,42,598/ - , WHICH IS MADE ON ACCOUNT OF ASSESSEES FAILURE TO PRODUCE EVIDENCE. SIMILARLY, AO MADE OTHER ADDITIO N OF RS. 53,568/ - , TREATING THE SAME AS A BOGUS LIABILITY, AGAIN FOR THE FAILURE OF THE ASSESSEE TO DEMONSTRATE THE GENUINENESS OF THE LIABILITY. OUT OF ANOTHER A DDITION OF RS. 9,13,850/ - , RS. 6,88,850/ - WAS MADE FOR ASSESSEES FAILURE TO PRODUCE THE MAIN TENANCE RECEIPT AND RS. 2.25 LAKHS WAS ADDED TOWARDS EXCESS AMOUNT RECEIVED OVER AND ABOVE THE AMOUNT SHOWN IN THE AGREEMENT. ALL THESE ADDITIONS WERE MADE PRIMARILY ON ACCOUNT OF ASSESSEES FAILURE TO DEMONSTRATE, BEFORE THE AO, THE CREDITWORTHINESS OF T HE CLAIMS IN THE BOOKS OF ACCOUNT. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE CIT (A), ASSESSEE SUBMITTED VARIOUS EXPLANATIONS AND EVIDENCES. CIT (A) CONSIDERED THE SAME AND PARTLY ALLOWED THE APPEAL OF THE ASS ESSEE ADMITTING THE SAID EVIDENCES WITHOUT REMANDING THE ISSUE TO THE FILE OF THE AO. AGGRIEVED WITH THE SAID ORDER OF THE CIT (A), REVENUE IS IN APPEAL BEFORE US AGAINST THE DELETION OF ADDITION TO THE EXTENT OF RS. 22,72,598/ - . ASSESSEE IS NOT IN APPEA L AGAINST THE SUSTAINING OF THE ADDITION BY THE CIT (A). REVENUE HAS ALSO RAISED ADDITIONAL GROUND BEFORE US STATING THAT THE CIT (A) ADMITTED THE ADDITIONAL EVIDENCES AT THE BACK OF THE AO AND VIOLATED THE PROVISIONS OF RULE 46A OF THE IT RULES, 1962. 4. DURING THE PROCEEDINGS BEFORE US, NONE APPEARED TO REPRESENT THE CASE OF THE ASSESSEE AND FROM THE RECORD, WE FIND THERE AS A DIFFICULTY IN SERVICE OF NOTICE TO THE 3 ASSESSEE. HOWEVER, THIS TIME, THE NOTICE WAS SERVED THROUGH THE LD DR AS EVIDENT FROM T HE AOS LETTER DATED 5.6.2015, WHICH IS COMMUNICATED THE FACT OF SERVICE OF NOTICE ON THE ASSESSEE ON 27.5.2015. DESPITE THE SERVICE OF NOTICE , NOBODY WAS PRESENT FOR THE ASSESSEE BEFORE US. CONSIDERING THE SUBMISSION OF THE LD DR, WE PROCEED TO ADJUDICA TE THE ISSUE. LD DR APPEARING FOR THE REVENUE HAS EXPLAINED THE FACTS OF THE CASE LEADING TO THE AFORESAID ADDITIONS AND HE DEMONSTRATED THE ASSES SEES FAILURE TO EVIDENCE THE CLAIMS MADE IN THE FINANCIAL STATEMENTS / RETURN OF INCOME. HE ALSO DEMONSTRAT ED THE VIOLATION OF THE PROVISIONS OF RULE 46A OF THE I.T. RULES, 1962. 5. ON HEARING THE LD DR AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US, WE FIND, IT IS A FACT THAT THE CIT (A) ADMITTED CER TAIN DETAILS AND EVIDENCES TO SOME EXTENT AND ADMITTED THE SAME WITHOUT REMANDING THE MATTERS TO THE FILE OF THE AO. IN THAT SENSE OF THE MATTER, WE FIND, THE ADDITIONAL GROUND RAISED BY THE REVENUE IS ADMISSIBLE , AND , IN THE INTEREST OF JUSTICE, WE FIND THE NECESSITY OF REMANDING THE GROUNDS AND ADDITIONAL GROUND RELATING TO THE DISALLOWANCE OF RS. 22,72,598/ - TO THE FILE OF THE AO FOR FRESH ADJUDICATION AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, ISSUE RAISED BY THE REVENUE IN THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE, 2015. SD/ - SD/ - (I.P. BANSAL) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 8.6 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 4 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI