ANGEL PIPES AND TUBES P.LTD, MUMBAI V. ASST CIT 5(1), MUMBAI

ITA 480/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0818 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: SANJUKTA CHOW DHURY
• Keywords: Unexplained cash credit; Unexplained expenditure; Principle of natural justice; Additional evidence
• Section: 69C; 131

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ITA NO. 480 / MUM/ 20 1 3 ( / ASSESSMENT YEAR: 20 09 - 10 ) M/S ANGEL PIPES AND TUBES P VT.LTD., 110/112, 1 ST FLOOR, KUMBHARWADA, MUMBAI - 400020 / VS. ASSTT.COMMISSIONR OF INCOME TAX - 5(1)(, 5 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 4000 20 . ( / APPELLANT) : ( / RESPONDENT ) ./ PAN : AAFCA9203P ( / APPELLANT) : ( / RESPONDENT ) / A SSESSEE BY : MS.SANJUKTA CHOWDHURY /R EVENUE BY : MS.ANUPAMA SINGLA / DATE OF HEARING : 22.3.2017 / DATE OF PRONOUNCEMENT : 11. 5 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: BY WAY OF THIS APPEAL THE ASSESSEE IS CHALLENGING THE ORDER OF LD.CIT(A) - 9 , MUMBAI DATED 20.11. 201 2 FOR THE ASSESSMENT YEAR 20 09 - 10 , WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1 . TH E LEARNED ASSESSING OFFICER HAS ERRED IN ADDING AN AMOUNT OF RS. 1,75,00,000/ - TO THE INCOME OF YOUR PETITIONER COMPANY. THE LEARNED C IT(A) - 9 HAS ERRED IN CONFIRMING THE ABOVE ADDITION OF RS.I,75,00,000/ - TO THE INCOME OF YOUR PETITIONER COMPANY. 2 ITA NO. 480/MUM/2013 2. THE LEARNED CIT (A) - 9 HAS ERRED IN STATING THAT YOUR APPELLANT HAD FA ILED TO ESTABLISH THE CREDIT WORTHINESS OF THE SHARE HOLDERS WHO HAD SUBSCRIBED TO THE SHARE CAPITAL OF THE PETITIONER COMPANY. 3. THE LD. A.O. HAS ERRED IN IGNORING THE FOLLOWING EVIDENC ES: ( I)PERMANENT ACCOUNT OF EACH SHARE HOLDER (II)CONFIRMATORY LETTER OF EACH SHARE HOLDER (III)AUDITED ANNUAL ACCOUNTS OF EACH SHARE HOLDER COMPANY (IV)RELEVANT EXTRACT OF THE BANK ACCOUNT FROM EACH SHARE HOLDER COMPANY. (V) ACKNOWLEDGEMENT SLIP FO R HAVING FILED THE INCOME - TAX RETURNS THE LD. A.O. HAS NOT CONTRADICTED THE GENUINENESS OF THE ABOVE MEN TIONED DOCUMENTARY EVIDENCES PRODUCED BY YOUR PETITIONER. 4. THE LD. CJT(A) HAS ERRED IN CONFIRMING THE ASSESSMENT ORDER PASSED BY LD. A.O. IN THI S RESPECT. BOTH THE LD. A.O. AND THE CJT(A) HAVE ERRED IN IGNORING THE DECISIONS OF THE SUPREME COURT IN THE CASE OF CIT V/S LOVELY EXPORT PVT LTD (2008) 216 CTR (SC) 195. 5. THE LD. CJT(A) HAS ERRED IN NOT APPRECIATING THE ADDITIONAL EVIDENCES PRODUCE D B Y YOUR PETITIONER IN RESPECT OF N EW TREE MERCANTILE CO. P. LTD. , A SHARE HOLDE R OF THE ASSESSEE COMPANY. THE CIT(A) HAS NEITHER MADE ANY REFERENCE TO THI S ADDITIONAL EVIDENCES GIVEN DURING THE COURSE OF THE HEARING OF THE APPEAL. 6. THE LD. A.O. HAS ERRED IN NOT TAKING INTO ACCOUNT THE E IDENCE GIVEN BY SHR I GIRISHCHAND YADAV ON 23 - 11 - 2011 IN THE COURSE OF RECORDING OF THE STATEMEN T U/S. 131 OF THE I NCOME - TAX ACT, 1961. 7. THE LD. A.O. HAS ERRED IN NOT ADJUSTING THE BUSINESS LOSS INCURRED BY YOU R PETITIONER TO THE EXTENT OF RS.1,25,61,168/ - AGAIN T O THE ADDITIONS OF RS.I,79,48,630/ - MADE UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THE L D. A.O. HAS ERRED IN STATING (PAGE 11 OF THE ASSESSMENT ORDER) THAT YOUR PETITIONE R WOULD NOT BE ALLOWED TO SET O FF AGAINST THE BUSINESS LOSS, THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT AND EXPENDITURE UNDER THE HEADING 'INCOM E FROM OTHER - SOURCES'. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE SAI D ADDITIONS. BOTH THE LD. A.O. AND THE LD. CIT(A) HAVE ERRED IN IGNORING TH E PROVISIONS OF SEC. 71 OF THE INCOME - TAX ACT, 1961. 8. THE A.O. HAS ERRED IN ADDING TWO AMOUNTS OF RS. 4,35,500/ - AND RS. 11,125/ - ON ACCOUNT OF 'UNEXPLAINED EXPENDITURE U/S. 69C'. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE SAME . 3 ITA NO. 480/MUM/2013 9. THE ORDER APPEALED AGAINST IS BAD IN LAW AND IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 2. AT THE OUTSET, THE LD.AR SUBMITTED BEFORE US THAT THE ISSUE RAISED IN THIS APPEAL IN GROUND OF APPEAL NO.1,2 AND 8 IS IN RESPECT OF ADDITION OF RS.1,75,00,000/ - MADE UNDER SECTION 69C OF THE INCOME TAX ACT, WHICH IS NOW STANDS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE ORDER OF CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.405/MUM/2012 (AY - 2008 - 09), DATED 13.8.2014 AND T HEREFORE REQUESTED THAT THE SAME ANALOGY BE APPLIED TO THE PRESENT ASSESSMENT YEAR AND ALSO TH IS ISSUE BE RESTORED TO THE FILE OF THE LD.CIT(A) TO DECIDE THE SAME ON SIMILAR LINES WITH THE SAME DIRECTION AS GIVEN BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE EARLIER YEAR. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING T HE IMPUGNED ORDERS AND CASE LAW RELIE D UPON BY THE ASSESSEE. WE FIND FROM THE ORDER OF CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CA SE (SUPRA) VIDE PARA 5 OF THE ORDER, THE TRIBUNAL HAS OBSERVED AND HELD AS UNDER: 5. THE MATTER IS ACCORDINGLY RESTORED BACK TO THE FILE OF THE LD. CIT(A), WHO SHALL ADJUDICATE THE SAME IN ACCORDANCE WITH LAW PER A SPEAKING ORDER AFTER ALLOWING BOTH THE PARTIES BEFORE HIM TO STATE THEIR CASE WITH REFERENCE TO ALL THE MATERIALS BEING RELIED UPON BY EITHER SIDE. HE SHALL DO SO QUA EACH CREDIT. IT IS PERTINENT TO STATE THAT THE ASSESSEE HAS MADE NO CASE EITHER BEFORE US OR BEFORE THE LOWER AUTHORITIES IN RES PECT OF THE SHARE SUBSCRIPTIONS BY OTHER THAN THE SIX COMPANIES ALLEGEDLY INVOLVED IN BOGUS BILLING, EVEN AS THE ADDITION UNDER REFERENCE IS FOR THE ENTIRE SUM CREDITED. THE LD. CIT(A) SHALL, IN DECIDING THE MATTER, BE GUIDED BY OUR OBSERVATIONS, WHICH THO UGH CANNOT BE REGARDED AS CONCLUSIVE, BEING MADE ON THE BASIS OF THE EXISTING MATERIAL ON RECORD. HE SHALL ALSO DECIDE THE SUBJECT MATTER OF THE REVENUES APPEAL; THE LD. DR CONTENDING OF LACK OF OPPORTUNITY AS 4 ITA NO. 480/MUM/2013 WELL AS OF THEIR BEING A QUALITATIVE CHANGE I N THE CREDIT BROUGHT FORWARD FROM THE EARLIER YEAR, REFERRING TO THE DECISION IN THE CASE OF MAJOR METALS LTD. (SUPRA), WHERE LOAN/S RECEIVED IN AN EARLIER YEAR STOOD CONVERTED TO SHARE CAPITAL DURING THE RELEVANT YEAR, INASMUCH AS THE SAME MAY HAVE A BEAR ING ON THE OTHERWISE TRITE LAW THAT IT IS ONLY THE AMOUNT CREDITED IN THE BOOKS OF ACCOUNT THAT CAN FORM THE BASIS OF ASSESSMENT U/S. 68, SO THAT THE SUMS CREDITED IN THE BOOKS PRIOR TO THE CURRENT YEAR ARE EXCLUDED. WE DECIDED ACCORDINGLY. 4. THE FACTS OF THE ISSUE BEFORE US ARE MATERIALLY SAME AS IN THE ITA NO.405/MUM/2012 AND THEREFORE , WE RESPECTFULLY FOLLOWING THE ORDER OF TRIBUNAL (SUPRA) SET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THE SAME TO THE FILE OF FAA TO DECIDE THE ISSUE ON THE SAME LI NES IN TERMS OF THE DIRECTION GIVEN BY THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) . GROUND NO.1,2 AND 8 ARE ALLOWED FOR STATISTICAL PURPOSES. 5. AS REGARDS GROUND NO.3,4, 5, 6 AND 7, WE FIND THAT THE LD. CIT(A) HAS NOT PASSED SPEAKING ORDER ON THESE ISSU ES AND THEREFORE, WE SET ASIDE THE ORDER OF LD.CIT(A) ON THESE GROUNDS AND RESTORE THE SAME TO THE FILE OF LD.CIT(A) TO PASS SPEAKING ORDER . ACCORDINGLY, THESE GROUNDS ALSO ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 11TH MAY, 2017. S D SD ( MAHAVIR SINGH ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 11. 5 .2017 SRL,SR.PS 5 ITA NO. 480/MUM/2013 / 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 F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI