ANIL BASUDEVO BERIWAL, MUMBAI V. ACIT 30(1), MUMBAI

ITA 5538/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7179 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 12-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Keywords: Opportunity of being heard; Principle of natural justice; Earning of tax free income; Source of fund
• Section: 143(3); 14A; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RA M LAL NEGI , JUDICIAL MEMBER ITA NO. 5538/MUM/2016 : A.Y : 2012 - 13 ANIL BASUDEVO BERIWAL M - 2, MAGANLAL CHAMBERS, DEVI GALLI, S.T. ROAD, CARNAC BUNDER, MASJID (E), MUMBAI 400 009 (APPELLANT) PAN : AABPB7414Q VS. ACIT - 30(1), MUMBAI (RESPONDENT) APPELLANT BY : SHRI DHARMESH SHAH RESPONDENT BY : MS . ARJU GARODIA DATE OF HEARING : 16/04/2018 DATE OF PRONOUNCEMENT : 15 /06/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 41, MUMBAI DATED 29.07.2016 PERTAINING TO THE ASSESSMENT YEAR 2012 - 13 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 31.03.2015 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN T HIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 2 ITA NO. 5538/MUM/2016 ANIL BASUDEVO BERIWAL 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS PASSING THE ORDER AND PARTLY CONFIRMING THE APPEAL OF THE APPELLANT WITHOUT APPRECIATING THAT THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. 2 . THE LD. CIT( A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.5,00,000/ - ON ACCOUNT OF LOAN TAKEN FROM AKHIL STEELS TREATING THE SAME AS UNEXPLAINED U/S. 68 OF THE ACT. 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.1 5,00,000/ - ON ACCOUNT OF LOAN TAKEN FROM S. K. STEELS TREATING THE SAME AS UNEXPLAINED U/S. 68 OF THE ACT. 4. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS.25,00,000/ - ON ACCOUNT OF LOAN TAKEN FROM VARNA SARUP CORPORATION TREATING THE SAME AS UNEXPLAINED U/S. 68 OF THE ACT. 5. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 41,282/ - U/S. 14A OF THE ACT. 3. IN THIS APPEAL, THE FIRST ISSUE IS WITH REGARD TO THE ADDITION OF RS.45,00,000/ - MADE BY THE INCOME - TAX AUTHORITIES U/S 68 OF THE ACT BY TREATING THE LOANS RECEIVED BY THE ASSESSEE FROM THREE CONCERNS, NAMELY, M/S. AKHIL STEELS RS.5,00,000/ - , M/S. S.K. STEELS RS. 15,00,000/ - AND M/S. VAMA SARUP CORPORATION RS.25,00,000/ - AS UNEX PLAINED. IN THIS REGARD, THE RELEVANT FACTS ARE THAT THE APPELLANT - INDIVIDUAL IS ENGAGED IN THE BUSINESS OF WHOLESALE DEALING IN IRON AND STEEL AND ALLIED PRODUCTS. IT WAS NOTICED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD RECEIVED FRESH LOA NS FROM M/S. AKHIL STEELS RS.5,00,000/ - , M/S. S.K. STEELS RS. 15,00,000/ - AND M/S. VAMA SARUP CORPORATION RS.25,00,000/ - . ON BEING ASKED TO EXPLAIN, ASSESSEE FURNISHED THE REQUISITE DETAILS ALONGWITH THE CONFIRMATION OF THE 3 ITA NO. 5538/MUM/2016 ANIL BASUDEVO BERIWAL PARTIES AS WELL AS THEIR ADDRESSES AND PAN. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICES TO THE CREDITORS U/S 133(6) OF THE ACT CALLING FOR CERTAIN DETAILS AND DOCUMENTS REQUIRING THE ASSESSEE TO SERVE THE NOTICES ON THE PARTIES. AFTER CONSIDERING THE RESPONSE, THE ASSESSING OFFICER TREATED THE AMOUNT OF RS.45,00,000/ - AS UNEXPLAINED AND ADDED IT TO THE RETURNED INCOME U/S 68 OF THE ACT. 4. B EFORE THE CIT(A), ASSESSEE , INTER - ALIA , CANVASSED THAT THE BURDEN WAS PUT ON THE ASSESSEE TO SERVE THE NOTICES ON THE PARTIES AND THE TIME ALLOWED WAS INSUFFICIENT. IT WAS POINTED OUT THAT NOTICES U/S 133(6) OF THE ACT WERE ISSUED ON THE ASSESSEE ON 2 6 .03.2015 , WHEREAS NOTICE TO M/S. AKHIL STEELS WAS DELIVERED ON 27.03.2015, THAT TO M/S. S.K. STEELS ON 29.03.2015 AND TO M/S. VAM A SARUP CORPORATION IT WAS DELIVERED ON 30.03.2015. AS THE ASSESSMENT WAS GETTING TIME - BARRED, EFFECTIVELY ASSESSEE WAS GIVEN ONLY ONE DAY TO COMPLY WITH THE REQUIREMENT AND, THEREFORE, NO PROPER OPPORTUNITY WAS GIVEN. ASSESSEE ALSO POINTED OUT THAT , EVE N OTHERWISE ENOUGH MATERIAL WAS FURNISHED TO THE ASSESSING OFFICER TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE THREE PARTIES. AS PER THE ASSESSEE, THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER MERELY ON DOUBTS AND SUSPICION. THE CIT(A) DISAGREED WITH THE ASSESSEE AND NOTED THAT OUT OF THE THREE PARTIES, ONLY ONE, I.E., M/S. AKHIL STEELS HAD FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2012 - 13, WHEREAS THE OTHER TWO CONCERNS HAD NOT SUBMITTED THEIR RETURNS OF INCOME. IN THE CASE OF M/S. AKHIL STEELS, IT WAS NOTED THAT A CASH OF RS.5,00,000/ - WAS DEPOSITED ON 31.03.2012 AND THE SAME WAS GIVEN AS LOAN TO THE ASSESSEE, THEREFORE, THE SOURCE OF CASH DEPOSITED WAS NOT EXPLAINED. EVEN WITH REGARD TO M/S. S.K. STEELS, THE 4 ITA NO. 5538/MUM/2016 ANIL BASUDEVO BERIWAL CIT(A) NOTICED DE POSITS IN THE BANK ACCOUNT ON VARIOUS DATES, BUT IN THE ABSENCE OF ANY EXPLANATION REGARDING SOURCE OF FUNDS IN THE BANK ACCOUNT OF THE CREDITOR, HE UPHELD THE ADDITION. EVEN WITH REGARD TO M/S. VAMA SARUP CORPORATION , THE CIT(A) UPHELD THE ADDITION ON TH E PLEA THAT CONFIRMATION OF THE PARTY WAS SIGNED BY THE ASSESSEE HIMSELF. IN THIS BACKGROUND, ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS VEHEMENTLY POINTED OUT THAT SO FAR AS THE BURDEN CAST ON THE ASSE SSEE IS CONCERNED, THE SAME WAS FULLY DISCHARGED AND REFERRED TO PAGE 11 OF THE PAPER BOOK WHEREIN IS PLACED THE DETAILS OF THE EVIDENCES FILED BEFORE THE ASSESSING OFFICER AND / OR CIT(A) IN RESPECT OF THE THREE PARTIES IN QUESTION, WHICH READS AS UNDER : - SR. NO. PARTICULARS AKHIL STEELS 1 LEDGER ACCOUNT OF AKHIL STEELS IN THE BOOKS OF THE APPELLANT. 2 JURISDICTION DETAILS OF AKHIL STEELS AS PER INCOME TAX DEPARTMENT WEBSITE. 3 ITR ACKNOWLEDGEMENT OF AKHIL STEELS. 4 LOAN CONFIRMATION OF AKHII STEELS IN THE BOOKS OF THE APPELLANT 5 RELEVANT EXTRACTS OF BANK STATEMENT OF AKHIL STEELS. 6 RELEVANT EXTRACTS OF BANK STATEMENT OF THE APPELLANT. 7 LETTER FROM BANK CONFIRMING PAYMENTS MADE TO AKHIL STEELS S.K. STEELS 8 JURISDICTION DETAILS OF S.K. STEELS AS PER INCOME TAX DEPARTMENT WEBSITE. 9 LOAN CONFIRMATION BY S .K. STEELS. 10 LEDGER ACCOUNT OF S.K. STEELS IN THE BOOKS OF APPELLANT SHOWING REPAYMENT OF LOANS 11 CONFIRMATION FROM S.K. STEELS IN RESPECT OF REPAYMENT OF LOAN. 12 RELEVANT EXTRACTS OF BANK STATEMENT OF S.K. STEELS. 5 ITA NO. 5538/MUM/2016 ANIL BASUDEVO BERIWAL 13 RELEVANT EXTRACTS OF BANK STATEMENT OF THE APPELLANT. 14 LETTERS FROM BANK CONFIRMING PAYMENTS MADE TO S.K. STEEL VAMA SWARUP CONSTRUCTION 15 LEDGER ACCOUNT OF VAMA SARUP CONSTRUCTION IN THE BOOKS OF THE APPELLANT. 16 JURISDICTION DETAILS OF VAMA SARUP CONSTRUCTION AS PER INCOME TAX DEPARTMENT WEBSITE. 6. IN ANY CASE, IT IS POINTED OUT THAT THE NOTICES TO THE THREE PARTIES U/S 133(6) OF THE ACT WERE DATED 26.03.2015, COPIES OF WHICH HAVE BEEN PLACED IN THE PAPER BOOK, THUS LEAVING HARDLY ANY TIME TO RESPOND EFFECTIVELY AS THE ASSESSMENT WAS GETTING TIME - BAR RED ON 31.03.2015. THOUGH THE ASSESSEE POINTED OUT THAT THE DETAILS FURNISHED BY THE ASSESSEE SUFFICIENTLY DISCHARGED THE ONUS CAST ON HIM U/S 68 OF THE ACT AND REFERRED TO THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUIL DERS, 256 ITR 36 0 (GUJ.) IN THIS REGARD, BUT A PRELIMINARY SUBMISSION WAS MADE THAT SINCE ADEQUATE TIME WAS NOT ALLOWED FOR THE ASSESSEE TO PRODUCE RELEVANT EXPLANATION, ASSESSEE WOULD BE SATISFIED IF THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSIN G OFFIC ER FOR A DECISION AFRESH, AND THIS WOULD ENABLE THE ASSESSEE TO FURNISH THE REQUISITE MATERIAL AND EVIDENCES. 7. THE LD. DR APPEARING FOR THE REVENUE HAS NOT SERIOUSLY OPPOSED THE PLEA OF THE ASSESSEE FOR REMANDING THE MATTER TO THE FILE OF THE ASS ESSING OFFICER. 8. HAVING CONSIDERED THE RIVAL STANDS, WE FIND THAT SO FAR AS THE PRIMARY DETAILS OF THE PARTIES INCLUDING THE CONFIRMATION AND PAN PARTICULARS ARE CONCERNED, THE SAME WERE FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING 6 ITA NO. 5538/MUM/2016 ANIL BASUDEVO BERIWAL OFFICER. IT IS A LSO EVIDENT THAT THE ASSESSING OFFICER STARTED THE VERIFICATION EXERCISE WITH THE PARTIES AT THE FAG END OF THE ASSESSMENT PROCEEDINGS BY ISSUING NOTICES U/S 133(6) OF THE ACT ON 26.03.2015. A PERUSAL OF THE SAID NOTICES SHOWS THAT VARIOUS DETAILS/DOCUMEN TS WERE CALLED FOR BY THE ASSESSING OFFICER FROM THE THREE PARTIES. IT ALSO REVEALS THAT THE COMPLIANCE WAS TO BE MADE WITHIN THREE DAYS. THE ASSESSMENT ORDER HAS BEEN PASSED ON 31.03.2015. CONSIDERING THE ENTIRETY OF CIRCUMSTANCES, IN OUR VIEW, THERE I S CONSIDERABLE WEIGHT IN ASSESSEES SUBMISSIONS THAT TIME GIVEN TO THE ASSESSEE TO MEET WITH THE RESULT OF THE VERIFICATION EXERCISE CARRIED OUT U/S 133(6) OF THE ACT WAS INSUFFICIENT, ESPECIALLY WHEN THE ENTIRE ADDITION BY THE ASSESSING OFFICER IS BASED O N VERIFICATION EXERCISE U/S 133(6) OF THE ACT. THEREFORE, WITHOUT GOING INTO THE MERITS OF THE RIVAL STANDS, WE DEEM IT FIT AND PROPER TO SET - ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER, WHO SHALL CONSIDER TH E APPLICABILITY OF SEC. 68 OF THE ACT QUA THE THREE CREDITORS IN QUESTION AFRESH, IN ACCORDANCE WITH LAW AFTER ALLOWING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 9. THE ONLY OTHER ISSUE IN THIS APPEAL IS WITH REGARD TO DISALLOWANCE U/S 14A OF THE ACT OF RS.41,282/ - . ON THIS, THE ONLY PLEA OF THE ASSESSEE IS THAT THE TOTAL EXEMPT INCOME EARNED DURING THE YEAR IS RS.3,048/ - AND THAT THE ADDITION BE RESTRICTED TO THE AM OUNT OF EXEMPT INCOME. WE FIND THAT THE PLEA OF THE ASSESSEE IS IN LINE WITH THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENTS PVT. LTD. VS. CIT, 372 ITR 694 (DELHI) AND ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RESTRIC T THE DISALLOWANCE 7 ITA NO. 5538/MUM/2016 ANIL BASUDEVO BERIWAL U/S 14A OF THE ACT TO THE EXTENT OF THE TAX EXEMPT INCOME. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 5 T H JUNE, 2018. SD/ - SD/ - ( RAM LAL NEGI ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 1 5 T H JUNE , 201 8 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, J BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI