MONIR D DOSHI, MUMBAI V. ITO 16(3)(1), MUMBAI

ITA 5677/MUM/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0183 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 09-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Assessee Lawyers: S C TIWARI
• Keywords: Unexplained cash credit; Unexplained expenditure; Additional evidence; Question of law
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI PAWAN SINGH, JM ./ I.T.A. NO. 5677/MUM/2014 ( / ASSESSMENT YEAR: 2005 - 06 ) SHRI MONIR D. D OSHI 322, PAREKH MARKET, OPERA HOUSE, MUMBAI - 400 004 / VS. ITO 16(3) - 1, MUMBAI ./ ./ PAN/GIR NO. ADGPD 6937 J ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI S. C. TIWARI & M S. RUTUJA N. PAWAR / RESPONDENT BY : SHRI T. A. KHAN / DATE OF HEARING : 14.12.2017 / DATE OF PRONOUNCEMENT : 05.03. 2018 / O R D E R PER S HAMIM YAHYA , A. M.: THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 17.06.2014 AND PERTAINS TO THE A SSESSMENT YEAR 2005 - 06. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE LEARNED CIT(A) ERRED IN LAW AND /ON FACTS IN CONCLUDING P ENALTY APPEAL U /S 271(L)(C) WITHOUT PROPER AND REAS ON ABLE OPPORTUNITY TO P L EAD THE CASE BEFORE PASSING THE APPELLANT ORDER. 2 ITA NO. 5677/MUM/2014 (A.Y.2005 - 06) SHRI MONIR D. DOSHI VS. ITO 2. WITHOUT PREJUDICE TO THE LEVIABILITY OF THE PENALTY U/S 271(1)(C), THE LEARNED CIT(A) ERRED IN LAW AND ON FACT IN CALCULATING PEN A LT Y ON AMOUNT RS . 45,52,727/ - IN SPITE OF TH E ADDITION OF RS.18,33, 000/ - WE RE DELETED IN APPEAL BY THE TRIBUNAL AND BALANCE ADDITION IS UNDER APPEAL WI T H HIGH COURT. 3. THE LEARNED CIT(A) ERRED IN LAW AND/ON FACTS IN NOT CONSIDERING THE TRIBUNAL'S ORDE R BEFORE LEVY PENALTY. 4. AS THE ENTIRE DIAMOND MARKET IS SHIFTED FROM OPERA HOUSE (CHARNI ROAD) TO BKC (BANDRA). THE ASSESSEE HAD ALSO SHIFTED TO BANDRA AND ALL NOTICES WAS DISPATCHED BY THE LEARNED CIT(A) AT PREVIOUS ADDRESS HENCE, ASSESSEE WAS NO T AWARE OF IT. AS SOON AS THE ASSESSEE BECOME AWARE OF THIS FACT HE APPOINTED AUTHORIZED REPRESENTATIVE AS HIS LEGAL COUNSELOR BUT BEFORE ANY ACTION CAN BE TAKEN, THE APPEAL WAS DISMISSED. 3. BRIEF FACTS OF THE CASE ARE AS UNDER: INITIALLY ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT BY MAKING ESTIMATED ADDITION TOWARDS GP OF RS.1.66 CRORE APART FROM UNEXPLAINED CASH CREDIT OF RS.50.75 LAKH, SUPPRESSION OF STOCK OF RS.2.74 LAKH AND ADDITION U/S. 41(1) OF RS.9.56 LAKH, APART FROM INCOME FROM UNDISCLOSED SO URCES OF RS.1.35 LAKH, AMOUNT CLAIMED AS LIC REFUND OF RS.81,755/ - AND UNEXPLAINED EXPENDITURE OF RS.12.60 LAKH. HOWEVER, LD.CIT(A) SUSTAINED THE ADDITION ONLY TO THE TUNE OF RS.28.41 LAKH OUT OF THE ADDITION MADE OF RS.50.75 LAKH U/S. 68 OF THE ACT. SIMIL ALRY, ADDITION U/S. 41(1) OF THE ACT WAS ALSO SUSTAINED APART FROM THE ADDITION OF RS.7.5 LAKH ON ACCOUNT OF GP. THUS, ADDITION TO THE EXTENT OF RS.45,52,727/ - WAS CONFIRMED BY THE LD. CIT(A). 4. ON THIS AMOUNT PENALTY U/S. 271(1)(C) OF THE ACT WAS ALSO L EVIED. UPON THE ASSESSEES APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRED TO SEVERAL CASE LAWS AND CONFIRMED THE LEVY OF PENALTY. 5. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSE E SUBMITTED A CHART SHOWING THAT ADDITION MADE AND RELIEF GRANT ED IN THE APPEALS IN THIS CASE READS AS UNDER: 3 ITA NO. 5677/MUM/2014 (A.Y.2005 - 06) SHRI MONIR D. DOSHI VS. ITO PARTICULARS ORIGINAL INCOME ADDITION BY A.O. U/S. 144 RELIEF BY C.I.T(A) RELIEF BY ITAT TOTAL RELIEF APPEAL PENDING IN HIGH COURT RETURNED INCOME 239877 ADDITION ON A/C OF GROSS PROFIT 16631123 15881123 750000 16631123 UNEXP CREDIT U/S. 68 5075000 2232000 124000 2356000 2719000 STOCK VALUE SUPRESSION 274310 274310 274310 CESASSATION OFLIAB U/S. 41(1) 956891 0 956891 956891 UNEX P 1. EXPENDITURE 1260000 1260000 1260000 CLAIMED AS DIVIDEND 135507 133507 133507 CLAIMED AS LIC REFUND 84755 84755 84755 239877 24417586 19867695 1830891 21698586 2719000 7. REFERRING TO THE ABOVE CHART, THE LD. COUNSEL OF THE ASSESSEE SUB MITTED THAT THE PENALTY HAS BEEN LEVIED WITH REFERENCE TO A DIFFERENT ADDITION TH A N WHAT HAS BEEN SUSTAINED FINALLY BY THE ITAT. HE FURTHER SUBMITTED THAT ON AMOUNT OF THE FINAL ADDITION SUSTAINED BY THE ITAT , QUESTION OF LAW HAS BEEN ADMITTED BEFORE THE HON' BLE BOMBAY HIGH COURT. HE REFERRED TO CASE LAWS FROM ITAT FOR THE PROPOSITION THAT WHEN ON A N ISSUE QUESTION OF LAW IS ADMITTED BEFORE THE HONBLE HIGH COURT, THE MATTER BECOMES DEBATABLE AND PENALTY LEVIED U/S. 271(1)(C) OF THE ACT IS NOT SUSTAINABLE. IN THIS REGARD, THE LD. COUNSEL OF THE ASSESSEE REFERRED TO THE DECISION OF THE ITAT IN THE CASE OF SCHRADER DUNCAN LIMITED V. ACIT (IN ITA NO. 8223/MUM/2010 VIDE ORDER DATED 01.01.2015 ) . 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 9. WE FIND THAT IN THE PRESENT CASE, THE HON'BLE BOMBAY HIGH COURT HAS ADMITTED SUBSTANTIAL QUESTION OF LAW AGAINST THE ITAT ORDER PASS ED IN THE QUANTUM APPEAL IN THIS CASE VIDE ORDER DATED 15.3.2013 WHICH READS AS UNDER: 4 ITA NO. 5677/MUM/2014 (A.Y.2005 - 06) SHRI MONIR D. DOSHI VS. ITO H EARD, ADMIT ON THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW, THE TRIBUNAL HAS ERRED IN NOT ENTERTAINING ADDITIONAL EVIDENCE SOUGHT TO BE FURNISHED BY THE APPELLANT AND TH EREBY NOT DOING SUBSTANTIAL JUSTICE TO THE APPELLANT 10. FROM THE ABOVE, IT IS UNDISPUTED THAT THE HON'BLE BOMBAY HIGH COURT HAS ADMITTED THE APPEAL AGAINST THE ITAT ORDER IN THE ASSESSEES OWN CASE. IT IS ALSO CLEAR THAT THE ADDITION ON WHICH PENALTY HA S BEEN LEVIED IN THIS CASE HAS BEEN SUBSTANTIALLY REDUCED BY THE ITAT IN THE QUANTUM APPEAL. HENCE, IT IS CLEAR THAT THE PRESENT QUANTUM OF APPEAL ON WHICH THE ADDITION HAS MADE DOES NOT SURVIVE. HENCE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSUE NEEDS TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION AND COMPUTATION IN ACCORDANCE WITH THE HIGHER APPELLATE ORDERS. 11. IN THE RESULT, TH IS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 05.03.2018 SD/ - SD/ - ( PAWAN SINGH ) (S HAMIM YAHYA ) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 05.03.2018 . . ./ ROSHANI , SR. PS 5 ITA NO. 5677/MUM/2014 (A.Y.2005 - 06) SHRI MONIR D. DOSHI VS. ITO / 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, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI