ITO WD 9(3)(2), MUMBAI V. SMITH PLASTIC P. LTD, MUMBAI

ITA 5453/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84499 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEY
• Assessee Lawyers: B B NEGANDHI
• Section: 68

Judgement Text

, , ,, , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , . . , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C.SHARMA, ACCOUNTANT MEMBER . / ITA NO.5453/MUM/2013 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, 9(3)-2, ROOM NO. 227, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S SMIT PLASTIC PVT. LTD. 1001, MANAS BLDG. DEVIDAS ROAD, OPP. ST. LAWARANCE HIGH SCHOOL, BORIWALI(W), MUMBAI-400103 ( # / REVENUE) ( $%&' / RESPONDENT ) P.A. NUMBER : AAACS5635G # ( ) / REVENUE BY: SHRI SACHIDANAND DUBEY $%&' ( ) / RESPONDENT BY : SHRI B.B. NEGANDHI ! ( *+ / DATE OF HEARING : 15/12/2014 ,-' ( *+ / DATE OF PRONOUNCEMENT : 16/12/2014 O R D E R PER JOGINDER SINGH, JM: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 25/06/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, CHALLENGING THE DELETION THE ADDITION OF RS.12 LA KH MADE U/S 68 OF THE INCOME TAX ACT, 1962. 2 M/S SM IT PLASTIC PVT. LTD. . 2. THE CRUX OF ARGUMENT ADVANCED BY SHRI SACHIDNAND DUBEY, LD. DR. IS THAT THE IMPUGNED ADDITION WAS DELETED B Y THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT APPREC IATING THE FACT THAT THE ASSESSEE DID NOT PRODUCE BOOKS OF ACC OUNTS, VOUCHERS, BILLS AND BANK STATEMENTS TO ESTABLISH TH E GENUINENESS OF THE TRANSACTION OF THE ADVANCES. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, SHRI B.B. NEGANDHI, DEFEN DED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF T HE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), SO THAT ITS CORRECTNESS MAY BE APPRECIATED: 3.3. I HAVE CONSIDERED THE FINDING OF THE ASSESSING OFFICER AND RIVAL SUBMISSION OF THE APPELLANT CAREFU LLY. I FIND THAT ASSESSING OFFICER HAS WRONGLY MADE ADDITION OF RS.12,00,000/- WITHOUT ANY VALID REASON. IT IS VERY EVIDENT FROM THE ASSESSMENT ORDER ITSELF THAT APPELLANT HAS SUBMITTED LOAN CONFIRMATION, BANK STATEMENT, ACKNOWLEDGEMENT OF INCOME TAX RETURN, TAX AUDIT REP ORT, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF UNIQUE PLASTIC BY LETTER DATED 29/08/2012. SIMILARLY, APPELLANT HA S SUBMITTED ALL THESE EVIDENCES BY LETTER DATED 03/10/2 012 IN RESPECT OF M/S PARAM WOOD MOULDING PVT. LTD. AND A LL THESE EVIDENCES WERE SUBMITTED REVEALING THE FACT TH AT ADVANCES TAKEN BY THE APPELLANT, IT IS WRONG ON THE PART OF THE ASSESSING OFFICER TO ARGUE THAT APPELLANT HAS N OT 3 M/S SM IT PLASTIC PVT. LTD. . EXPLAINED THE UTILIZATION OF CREDIT TAKEN BY THESE TW O PARTIES. WHEN SOURCE OF LOAN HAS BEEN EXPLAINED WITH DOCUMENTA RY EVIDENCES, THERE IS NO VALID REASON TO MAKE SUCH ADDI TIONS ON SUCH FLIMSY GROUND. THERE MAY NOT BE ANY BUSINE SS ACTIVITIES BUT OBTAINMENT OF LOAN AND ADVANCES OR CR EDIT CANNOT BE SUBJECTED TO ADDITION U/S 68 EVEN IN THE E VENT OF PROPER EXPLANATION OF SOURCE OF SUCH ADVANCES OR CR EDITS. APPELLANT HAS DEMONSTRATED ALL THE RELEVANT EVIDENCES, HENCE IT IS WRONG PART OF THE ASSESSING OFFICER TO MAKE SUCH BASELESS ADDITION. IT MAKES NO DIFFERENCE IF AMOUN T HAS BEEN TAKEN AS CREDIT BY THE APPELLANT AND KEPT IN BA NK ACCOUNT. LD. ASSESSING OFFICER HAS WRONGLY MENTIONED THAT GENUINENESS OF THE TRANSACTION HAS NOT BEEN ESTABLI SHED BY THE APPELLANT. THERE MAY NOT BE ANY NEED OF BUSINES S AT THE TIME OF OBTAINING LOAN BUT ONLY ON THAT REASON NO SUCH ADDITION CAN BE MADE AS THERE MAY BE POSSIBILITY OF UTILIZING SAME IN FUTURE. AFTER GOING THROUGH PARAGRAPH 4, 5 AND 6 OF THE ASSESSMENT ORDER, I FIND THAT LD. ASSESSING OFF ICER HAS MADE THIS ADDITION FOR SAKE OF ADDITION WITHOUT APPRECIATING THE APPLICABILITY OF LAW OVER SUCH ISS UE AND DISRESPECTING THE DOCUMENTARY EVIDENCES SUBMITTED B Y THE APPELLANT DURING THE APPELLATE PROCEEDING. THUS, IN THE BACKGROUND OF THE ABOVE DISCUSSION, I REACH TO THE CONCLUSION THAT LD. ASSESSING OFFICER HAS MADE ADDI TION OF RS. 12 LAKH DISRESPECTING THE DOCUMENTARY EVIDENCES ON RECORD AND WITHOUT APPRECIATING THE LAW U/S 68 OF THE I.T. ACT. ASSESSING OFFICER IS THEREFORE DIRECTED TO DELE TE THE ADDITION OF RS.12,00,000/-. 4 M/S SM IT PLASTIC PVT. LTD. . AS REGARDS, ADDITION OF RS.5,000/- BEING DIVIDEND INCOME LD. A.R. HAS NOT PRESSED FOR ADJUDICATION BEIN G SMALL AMOUNT, SAME IS HEREBY CONFIRMED AS THERE IS N O CONTRARY EVIDENCES SUBMITTED BY THE APPELLANT. 3.4. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OBSERVATION M ADE IN THE ASSESSMENT ORDER, LEADING TO MAKING ADDITION, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD AND THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT THE LD. AS SESSING OFFICER WHILE MAKING THE ADDITION, IGNORED THE EVIDENCES, S UBMITTED DURING ASSESSMENT PROCEEDINGS, VIDE LETTER DATED 29 /08/2012 AND 03/10/2012. THE ADVANCES WERE TAKEN FROM M/S PA RAM WOODS AND M/S UNIQUE PLASTICS. THE NECESSARY DETAIL S OF THE CREDITORS WERE ALSO FURNISHED DURING ASSESSMENT PRO CEEDINGS. THE LOAN CONFIRMATIONS, BANK STATEMENT, COPY OF THE INCOME TAX RETURNS, TAX AUDIT REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF UNIQUE PLASTICS WERE FURNISHED BY THE ASSESSEE V IDE LETTER DATED 29/08/2012. LIKEWISE, VIDE LETTER DATED 03/1 0/2012, IDENTICAL DETAILS FROM PARAM WOOD MOULDING PVT. LTD . WERE ALSO FURNISHED BY THE ASSESSEE. THUS, THE FINDINGS OF T HE ASSESSING OFFICER ARE NOT SUBSTANTIATED. UNDISPUTEDLY, THE A DDITION WAS MADE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS PROPERLY, THUS WE FIND NO MERIT IN THE APPEAL OF TH E REVENUE. THE 5 M/S SM IT PLASTIC PVT. LTD. . STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) IS AFFIRMED. FINALLY, APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCL USION OF THE HEARING ON 15/12/2014. SD/- SD/- (R.C.SHARMA) ( JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED - 16/12/2014 F{X~{T? P.S/. ! . . ( (( ( $*. $*. $*. $*. /.'* /.'* /.'* /.'* / COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. $%&' / THE RESPONDENT. 3. 0 ( ) / THE CIT(A)- 4. 0 / CIT 5. .12 $*! , , / DR, ITAT, MUMBAI 6. 23 4 / GUARD FILE. ! ! ! ! / BY ORDER, %.* $* //TRUE COPY// 5 55 5 / 6 6 6 6 # # # # (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI