KAMLESH PARSHURAM KUMAR, NAVI MUMBAI V. ITO WD 22(3)-2, NAVI MUMBAI

ITA 48/MUM/2011

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0219 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR RAI LD
• Keywords: Opportunity of being heard; Additional evidence; Deemed dividend
• Section: 143(3)

Judgement Text

ITA.NO.48/MUM/2011 KAMLESH PARSHURAM KUMAR ASSESSMENT YEAR 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 48/MUM/2011 ( / ASSESSMENT YEAR: 2007-08) KAMLESH PARSHURAM KUMAR 101, SAI MAYA, PLOT NO.104 SECTOR 29, VASHI NAVI MUMBAI / VS. INCOME - TAX OFFICER WARD 22(3)(2) VASHI NAVI MUMBAI ./ ./PAN/GIR NO. AAMPK-9088-J ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : KAMLESH PASHURAM KUMAR, ASSESSEE IN PERSON REVENUE BY : SAURABH KUMAR RAI, LD. DR / DATE OF HEARING : 19/02/2018 / DATE OF PRONOUNCEMENT : 21 /02/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2007-08 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-33 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-33/IT/1085/09-10 DATED 12/10/2010 BY RAISING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1) THE APPELLANTS PRAYS AND SUBMITS THAT THE LEARN ED APPELLATE AUTHORITY HAS PASSED THE ASSESSMENT ORDER IN HASTE AND WITHOUT GI VING SUFFICIENT ITA.NO.48/MUM/2011 KAMLESH PARSHURAM KUMAR ASSESSMENT YEAR 2007-08 2 OPPORTUNITY OF BEING HEARD THEREFORE WITHOUT CONSID ERING FULL FACTS PUT BEFORE HIM DURING THE TIME OF ASSESSMENT. 2) THE APPELLANT PRAYS AND SUBMITS THAT THE LEARNE D CIT(A) ERRED IN TREATING BUSINESS TRANSACTION AS LOANS AND ADVANCES AND FURT HER HOLDING THAT SECTION 2(22)(E) IS APPLICABLE TO BUSINESS TRANSACTION, WIT HOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE BUSINESS ACTIVITIES OF ALL THREE FIRMS I.E. TWO PRIVATE LIMITED COMPANIES AND ONE PROPRIETOR CONCERN HAVING THE SAME KIND OF BUSINESS THAT IS EXPORT OF MARINE MACHINERY COMPONE NTS AND SPARE PARTS AND WHEN THE AMOUNT WAS USED FOR ADVANCE FOR PURCHA SE OF MATERIAL FOR DUE COMPLIANCE OF EXPORT SALES, PAYMENT TO CREDITORS FO R SPECIFIC PURCHASES, PERSONAL GUARANTEE TO BANK AND TO FOREIGN VENDORS. 3) THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF RS.96,72,500/- AS DEEMED DIVIDEND. 4) THE APPELLANT PRAYS AND SUBMIT THE LEARNED CIT( A) HAS ERRED IN NOT HOLDING THAT THE SAID ADVANCES WERE NOT FOR ANY PERSONAL BE NEFIT OF THE APPELLANT THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME-TAX OFFICER- WARD 22(3)(2), MUMBAI [AO] U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 10/12/2009 WHEREIN THE TOTAL INCOME HAS BEEN DETERM INED AT RS.106.58 LACS AFTER CERTAIN ADDITIONS / ADJUSTMENTS AS AGAIN ST RETURNED INCOME OF RS.9.86 LACS FILED BY THE ASSESSE ON 02/11/2007. TH E SOLITARY ISSUE INVOLVED IN THE APPEAL IS CERTAIN ADDITION U/S 2(22 )(E). 2. FACTS QUA THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE BUSINESS OF EXPORT OF MARINE MACHINERY COMPONENTS AND SPARES UNDER PROPRIETORSHIP CONCERN NAMELY MARLINE MARINE TRADE INC. WAS FOUND TO HAVE RECEIVED CERTAIN UNSECURED LOANS AGGREGATING TO RS.96.72 LACS FROM TWO ENTITIES NAMELY KPS TRONICS INDIA PVT. LTD. & MARLINE MARINE SERVICES PVT. LTD. IT WAS FURTHER FOUND THAT THE ASSESSEE HAD SUBSTANTIAL INTEREST IN BOTH THESE CONCERNS IN TERMS OF SECTION 2(22)(E) AND BOTH THE CONCERNS HAD SUFFICIENT ACCUM ULATED RESERVES AT THE TIME OF GRANTING OF LOANS. RESULTANTLY, THE SAI D LOANS WERE ADDED TO THE INCOME OF THE ASSESSEE BY INVOKING THE PROVISIO NS OF SECTION 2(22)(E). THE AFORESAID ADDITION, UPON CONFIRMATION BY LD. CIT(A) VIDE ITA.NO.48/MUM/2011 KAMLESH PARSHURAM KUMAR ASSESSMENT YEAR 2007-08 3 IMPUGNED ORDER DATED 12/10/2010, HAS BEEN CONTESTED BY THE ASSESSEE BEFORE US. 3. THE ASSESSEE-IN-PERSON PLEADED FOR ANOTHER OPPOR TUNITY TO SUBSTANTIATE HIS STAND THAT THE SAID TRANSACTIONS W ERE BUSINESS TRANSACTIONS AND THE AMOUNT WERE ADVANCED TO CARRY OUT CERTAIN TRANSACTIONS ON BEHALF OF TWO ENTITIES AND NOT COVE RED BY THE PROVISIONS OF SECTION 2(22)(E). PER CONTRA, LD. DR POINTED OUT THAT THE ASSESSEE UTILIZED THE SAID UNSECURED LOANS IN MAKING FIXED D EPOSITS WITH THE BANK AND THEREFORE, THE SAID PLEA COULD NOT BE ACCEPTED. 4. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED ORDERS OF LOWER AUTHORITIES. PRIMA FACIE, THE ASSESSEE WAS UNABLE TO SUBSTANTIATE HIS STAND BEFORE THE LOWER AUTHORITIES . HOWEVER, WE FIND THAT THE ASSESSEE, BEFORE US, HAS PLACED CERTAIN ADDITIO NAL EVIDENCES IN THE PAPER-BOOK TO SUPPORT THE CONTENTION THAT THE SAID AMOUNT WERE RECEIVED TO CARRY OUT BUSINESS TRANSACTIONS FOR THE SAID ENT ITIES. THEREFORE, IN ALL FAIRNESS, WE SEE NO HARM IN PROVIDING ANOTHER OPPOR TUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CONTENTIONS BEFORE THE LOWER AUTHORITIES. THEREFORE, WITHOUT DELVING MUCH DEEPER INTO THE ISS UE, THE SAME IS RESTORED BACK TO THE FILE OF LD. AO TO CONSIDER THE SAID CONTENTION OF THE ASSESSEE IN THE LIGHT OF THE ADDITIONAL EVIDENCES. 5. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D FOR STATISTICAL PURPOSES. ITA.NO.48/MUM/2011 KAMLESH PARSHURAM KUMAR ASSESSMENT YEAR 2007-08 4 ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2018 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21. 02.2018 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. !$- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI