ITO 1(1)(2), MUMBAI V. DHARMAKOT INVESTMENT AND TRADING CO,. P.LTD, MUMBAI

ITA 521/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8895 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 521/ MUM/20 17 ( ASSESSMENT YEAR : 2009 - 10 ) ITO 1(1)(2) 534, AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 VS. M/S. DHARMAKOT INVESTMENT AND TRADING CO. PVT. LTD., 8, RAJABH MAHAL 144, M.K.ROAD MUMBAI 400 020 PAN/GIR NO. AAACD2115N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI RAJESH P. SHAH REVENUE BY SHRI RAM TIWARI DATE OF HEARING 27 / 0 9 /201 7 DATE OF PRONOUNCEME NT 23 / 10 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 2, MUMBAI DATED 18/10/2016 FOR THE A.Y. 2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF THE IT ACT. 2.THE FOLLOWING GROUNDS HAV E BEEN TAKEN BY THE REVENUE: - (I) 'WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.37,00,000/ - MADE U/S.68 ON ACCOUNT OF UNSECURED LOAN BY SOLELY RELYING ON THE DECISION OF CIT(A) - 37, MUMB AI IN THE CASE OF VASHU BHAGNANI WITHOUT APPRECIATING THAT THE FACTS OF THAT CASE ARE TOTALLY DIFFERENT FROM THE INSTANT CASE?' (II) 'WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN IGNORING THAT IN THE CASE OF VASHU BHA GNANI, THE SAID ASSESSEE HAD PAID INTEREST OFRS.4,50,000/ - AFTER EFFECTING TDS WHEREAS IN THE INSTANT CASE NO SUCH TRANSACTION OF INTEREST PAYMENT HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE?' (III) 'WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) WAS RIGHT IN HO/DING THAT A O HAD SOLELY RELIED ON THE ITA NO. 521/MUM/2017 M/S. DHARMAKOT INVESTMENT AND TRADING CO. PVT. LTD., 2 INFORMATION OF INVESTIGATION WING, WITHOUT APPRECIATING THE FACTS THAT ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST UPON IT TO PROVE THE IDENTITY & CREDIT WORTHINESS OF THE LENDER, AS ALSO GENUINENESS OF THE TRANSACTION WAS NOT ESTABLISHED, HENCE THE AO WAS LEGALLY CORRECT IN INVOKING SECTION 68 OF THE INCOME TAX ACT SINCE THE LENDER WAS FOUND TO BE ONE OF THE GROUP CONCERN OF PRAVIN JAIN GROUP ENGAGED IN PROVIDING ACC OMMODATION ENTR IES AND ASSESSEES NAME WAS REFLECTED IN THE LIST OF BENEFICIARIES OF SUCH TRANSACTIONS?' THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR WITHDRAW THE AFORESAID GROUND OF APPEAL. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. THE AO H AS ADDED A SUM OF RS. 37,55,500/ - BY TREATING RS. 37,00,000/ - AS BOGUS UNSECURED LOANS FOUND TO BE RECEIVED FROM ONE SHRI PRAVEEN KUMAR JAIN AND FURTHER A SUM OF RS. 55,500/ - AS COMMISSION FOR THE ABOVE TRANSACTION AND THEREFORE ARRIVED AT A TAXABLE INCOME OF RS. 37,55,500/ - AGAINST THE LOSS FILED BY THE ASSESSEE ON 26.09.2009 OF RS. 11,210 / . THEREFORE, .HE ISSUED NOTICE U/S. 148 AFTER RECEI VING INFORMATION FROM DG1T, MUM BAI AS THE A SSESSEE IS FOUND TO BE ACCEPTING SOME ACCOMMODATION LOANS FROM ONE SHRI PRAVE EN KUMAR JAIN. 4. BY THE IMPUGNED ORDER, CIT(A) DELETED THE ADDITION AFTER OBSERVING THAT ORDER PASSED BY CLT(A) - 37, MU M BAI VIDE ORDER NO. CLT(A) - 37/IT - 119/ACIT 25(3)/2015~16 DATED 14.07.2016 ON IDENTICAL GROUNDS WHEREIN THE LD. CIT(A) HAS DECIDED THE ISSU E IN FAVOUR OF THE A SSESSEE . THE RELEVANT PORTION IS AS UNDER : '6.6. IN VIEW OF THE FACTS AND CIRCUMSTANCES MENTIONED ABOVE, IN MY OPINION, THE APPELLANT HAS SUBMITTED SUFFICIENT EVIDENCES TO PROVE THE GENUINENESS OF TRANSACTIONS DURING THE YEAR UNDER CO NSIDERATION. THE AO HAS SOLELY RELIED UPON THE STATEMENTS OF BHAWAR LAL JAIN AND DID NOT CARRY OUT ANY WORTHWHILE INDEPENDENT INQUIRY IN THE MATTER. HE HAS ITA NO. 521/MUM/2017 M/S. DHARMAKOT INVESTMENT AND TRADING CO. PVT. LTD., 3 TOTALLY IGNORED THE DOCUMENTARY EVIDENCE SUBMITTED BY THE APPELLANT. THE AO HAS NOT POINTED OUT ANY DEFECT IN THE ABOVE MENTIONED DOCUMENTARY EVIDENCES SUBMITTED DURING ASSESSMENT PROCEEDINGS. WITHOUT POINTING OUT ANY LACUNA IN THE EVIDENCES SUBMITTED BY THE APPELLANT, THE SOURCES AND THE GENUINENESS CANNOT BE REJECTED, UNLESS AND UNTIL PROVED OTHERWISE BY THE AO, WHICH HE HAS FAILED TO DO. THEREFORE, THE DECISION OF THE AO TREATING THE SAME AS BOGUS OR NON - GENUINE TRANSACTIONS IS NOT IN ORDER AND CANNOT BE JUSTIFIED. THE AO IS ACCORDINGLY DIRECTED TO DELETE THE ADDITION OF RS. 50,00,000/ - .' IN THE ASSE SSEES CASE THE AO HAS SOLELY RELIED ON THE INVESTIGATION WING AND FURTHER HAS ALSO RELIED ON THE STATEMENT RECORDED FROM DDIT, MUMBAI ONLY. THEREFORE, I AM INCLINED TO FOLLOW CIT(A)'S DECISION CITED ABOVE WHICH WAS PASSED ON 14.07.2016 . S O ACCORDINGLY I A M OF THE OPINION THAT THE ADDITION MADE WAS NOT FOUND TO BE IN ORDER AND I DIRECT THE AO TO DELETE THE ADDITION MADE. THE GROUNDS OF APPEAL ARE ALLOWED. 5. AGAINST THE ABOVE ORDER OF CIT(A) , REVENU E IS IN FURTHER APPEAL BEFORE ME. 6 . I HAVE CONSIDERED RI VAL CONTENTIONS AND FOUND THAT CIT(A) HAS DELETED THE ADDITION JUST BY FOLLOWING THE ORDER OF CIT(A) 37 IN SOME OTHER CASES. NOWHERE CIT(A) HAS INDICATED HOW THE FACTS OF THAT CASE ARE IDENTICAL TO THE FACTS OF THE INSTANT CASE. FROM THE ORDER OF AO I FO UND THAT AO HAS DISCUSSED THE ISSUE THREADBARE AND OBSERVED THAT ASSESSEE WAS UNABLE TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS . HOWEVER, WITHOUT GIVING ANY FINDING ON THESE INGREDIENTS, THE CIT(A) HAS DELETED THE ADDITION JUST BY FOLLOWING THE ORDER OF ANOTHER CIT(A). I DO NOT FIND ANY MERIT IN THE ORDER OF CIT(A), ACCORDINGLY SAME IS SET ASIDE AND MATTER IS RESTORED BACK TO THE FILE OF CIT(A) FOR DECIDING AFRESH AS PER LAW. 7 . NEEDLESS TO SAY THAT ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY BE FORE DECIDING THE ISSUE. ITA NO. 521/MUM/2017 M/S. DHARMAKOT INVESTMENT AND TRADING CO. PVT. LTD., 4 8 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 23 / 10 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBA I ; DATED 23 / 10 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//