ACIT - 2(3)(1), MUMBAI V. VOLANT TEXTILE MILLS LTD., MUMBAI

ITA 5258/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0280 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'I' BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 5258/MUM/2016 (ASSESSMENT YEAR: 2012-13) A C I T - 2(3)(1) ROOM NO. 552, 5TH FLOO AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 VS. M/S. VOLANT TEXTILE MILLS LTD. A-ROYAL INDUSTRIAL ESTATE 4TH FLOOR, NAIGAON CROSS ROAD WADALA, MUMBAI 400 -031 PAN AAACV3463P APPELLANT RESPONDENT APPELLANT BY: SHRI SOURABH KUMAR RAI RESPONDENT BY: NONE DATE OF HEARING: 07.02.2018 DATE OF PRONOUNCEMENT: 14.02.2018 O R D E R PER RAJESH KUMAR, AM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-6, MUMBAI DATED 27.05.2016 FOR A.Y. 2012-13. 2. THE ONLY GROUND TAKEN BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) IN NOT PROVIDING OPPORTUNITY TO THE AO BEFOR E ADJUDICATING THE MATTER ON THE BASIS OF ADDITIONAL EVIDENCES FILED B Y THE ASSESSEE THEREBY CONSTITUTING VIOLATION OF RULE 46A OF THE I.T. RUL ES, 1961. 3. AT THE OUTSET WE WOULD LIKE TO MENTION THAT NONE AP PEARED ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING NOR ANY APPL ICATION FOR ADJOURNMENT WAS RECEIVED FROM THE ASSESSEE. WE THEREFORE PROCEE D TO DISPOSE OFF THE APPEAL AFTER CONSIDERING THE MERIT AND HEARING THE LEARNED D.R. 4. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAS S HOWN UNSECURED LOAN OF ` 16,61,81,984/- IN THE BALANCE SHEET WHEREAS THE ASS ESSEE COULD ITA NO. 5258/MUM/2016 M/S. VOLANT TEXTILE MILLS LTD. 2 PRODUCE ONLY CONFORMATION AND DETAILS IN RESPECT OF UNSECURED LOANS TO THE TUNE OF ` 15,78,95,301/- AND CONSEQUENTLY ADDED THE DIFFERENC E OF ` 82,86,683/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). IN THE APPELLATE PROCEEDINGS THE LEARNED CIT(A) ALL OWED THE APPEAL OF THE ASSESSEE ACCEPTING THE ARGUMENTS THAT THE SAID AMOU NT REPRESENT AN OLD LOAN FROM M/S. KIRLOSKAR INVESTMENT AND FINANCE LTD TAKEN IN F.Y. 1997- 98. THE ASSESSEE ALSO FILED COPY OF THE LEASE AGREE MENT DATED 12.11.1997 BEFORE THE CIT(A) AND LIST OF LOANS TAKEN BY THE AS SESSEE AT PAGE NO. 51 OF THE PAPER BOOK. THE SAID AMOUNT OF ` 82,86,682/- WAS SHOWN AS OPENING BALANCE AGAINST KIRLOSKAR INVESTMENT AND FINANCE LT D. AND THE CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT TAKEN ANY FRESH LOAN DURING THE YEAR. THE SAID OUTSTANDING AMOUNT REPRESENTED LEASE CHARG ES PAYABLE TO KIRLOSKAR INVESTMENT AND FINANCE LTD. AND THUS ADDI TION UNDER SECTION 68 OF THE ACT CANNOT BE MADE. THUS HE DELETED THE ADDI TION. 5. THE LEARNED D.R. VEHEMENTLY SUBMITTED BEFORE US TH AT THE CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCES WITHOUT CONFR ONTING THE SAME TO THE AO THEREBY CONSTITUTING VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS THE EVIDENCES, ON THE BASIS OF WHICH THE ADDITION WAS D ELETED, WAS NOT CONFRONTED TO THE AO BY WAY OF REMAND PROCEEDINGS. THEREFORE, HE PLEADED THAT THE ISSUE BE RESTORED TO THE FILE OF THE AO TO VERIFY THE EVIDENCES AND DECIDE THE ISSUE DE NOVO. 6. WE HAVE HEARD THE LEARNED D.R. AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. AS IS APPARENT FROM THE RECORD AND THE O RDER OF THE CIT(A) THE ADDITION HAS BEEN DELETED ON THE BASIS OF THE ADDIT IONAL EVIDENCES FILED BY THE ASSESSEE WHICH WERE NOT BEFORE THE AO IN THE AS SESSMENT PROCEEDINGS AND THEREFORE WE FIND MERIT IN THE ARGUMENTS OF THE LEARNED D.R. THAT THE ISSUE BE REMITTED BACK TO THE AO TO DECIDE THE CASE OF THE ASSESSEE ACCORDINGLY AFTER CONSIDERING SAID EVIDENCES. IN VI EW OF THE ABOVE WE ARE INCLINED TO SET ASIDE THE ORDER OF THE CIT(A) AND R ESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO CONSIDER T HE EVIDENCES WHICH THE ITA NO. 5258/MUM/2016 M/S. VOLANT TEXTILE MILLS LTD. 3 ASSESSEE MAY FILE BEFORE THE AO AND DECIDE THE SAME IN THE LIGHT OF THE SAID EVIDENCES. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2018. SD/ - SD/ - (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 14 TH FEBRUARY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -6, MUMBAI 4. THE CIT - 2, MUMBAI 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.