SHRI PARVEZ RAISI, MUMBAI V. THE DCIT CEN CIR-9, MUMBAI

ITA 5692/MUM/2008

• Counselvise Citation: 569219914 RSA 2008
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 09-09-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALEXANDER CHANDY
• Keywords: Opportunity of being heard
• Section: 132

Judgement Text

1 ITA 5692/ /M/2008 SH RI PARVEZ RAISI. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C BEFORE SHRI D. MANMOHAN, V.P. AND SHRI R.K. PANDA, A.M. ITA NO. 5692/MUM/2008 ASSESSMENT YEAR 2003-04 SHRI PARVEZ RAISI, TOPAZ BAR & RESTAURANT, RUSTAM BAUG, BLOCK A, SANT SAVTA MARG, MUMBAI - 27. PAN ADPPR 2000R VS. DCIT- CENTRAL CIRCLE -9, 8 TH FLOOR, OLD CGO BLDG. ANNEXE, M.K. MARG, MUMBAI.20 APPELLANT RESPONDENT APPELLANT BY MR. VINOD KUMAR BIN DAL MR. GAURAV BANSAL RESPONDENT BY SHRI ALEXANDER CHANDY ORDER PER R.K. PANDA A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DT. 26.6.2008 OF CIT(A)- VII, MUMBAI RELATING TO A.Y. 2003-04. 2. THE ASSESSEE IN ITS ONLY GROUND OF APPEAL HAS CH ALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE PENALTY OF ` 50,28,2127/- LEVIED BY THE A.O. U/S 271(1)(C) OF THE ACT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS THE PROPRIETOR OF M/S TOPAZ BAR AND RESTAURANT AND M/S COBANA RESTAURANT AND BAR ENGAGED IN THE BUSINESS OF LIQUOR AND NON-LIQUOR SALE. THE RES TAURANT AND BAR HOLDS LICENSE OF ORCHESTRA AND DANCES ON RECORDED MUSIC. A SEARCH U/S 132 OF THE I.T. ACT WAS CONDUCTED BY THE DEPARTMENT ON 21.1.2003 AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURS E OF SEARCH, VARIOUS 2 ITA 5692/ /M/2008 SH RI PARVEZ RAISI. INCRIMINATING DOCUMENTS WERE SEIZED. THE ASSESSEE F ILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF ` 2,50,80,370/- ON 28.11.2003. THE A.O. COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF ` 4,10,42,960/- BY MAKING VARIOUS ADDITIONS. 3.1 IN APPEAL THE LD. CIT(A) DISMISSED THE APPEAL F ILED BY THE ASSESSEE. THE A.O. SUBSEQUENTLY INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT ON ACCOUNT OF THE FOLLOWING ADDITIONS MADE BY HIM:- 1) REPAIRS AND RENEWALS OF COBANA RESTAURANT & BAR ` 45,65,366/- 2) REPAIRS AND RENEWALS OF TOPAZ RESTAURANT & BAR ` 58,15,873 3) SUPPRESSION OF ENTERTAINMENT INCOME ` 53,18,940/- 4) SUPPRESSION OF LIQUOR & NON-LIQUOR DRINKS SALE ` 11,04,136/- 5) ILLEGAL PAYMENTS AND INTEREST ON CASH LOANS ` 3,21,153/- 3.2 REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE, THE A.O. LEVIED PENALTY OF ` 50,28,217/- U/S 271(1)(C) OF THE ACT. IN APPEAL, T HE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE A.O. U/S 271(1) (C) OF THE ACT. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE TRIBUNAL IN THE QUANTUM PROCEEDINGS HAS DELETED THE ADDITION ON ACCOUNT OF ILLEGAL PAYMENTS AND INTEREST ON CASH LOANS, SUPPRE SSION OF LIQUOR AND NON- LIQUOR DRINK SALES. IT HAS GIVEN PARTIAL RELIEF ON ACCOUNT OF SUPPRESSION OF ENTERTAINMENT INCOME. HOWEVER, IT HAS CONFIRMED TH E ADDITION ON ACCOUNT OF REPAIRS AND RENEWALS OF COBANA RESTAURANT & BAR AND TOPAZ RESTAURANT & BAR. HE SUBMITTED THAT THE DISALLOWANCE OF REPAIRS AND R ENEWAL EXPENSES BY HOLDING THE SAME TO BE CAPITAL IN NATURE IS A DEBATABLE ISS UE AND, THEREFORE, IT DOES NOT CALL FOR LEVY OF PENALTY. SO FAR AS THE PARTIAL RE LIEF ON ACCOUNT OF SUPPRESSION OF ENTERTAINMENT INCOME IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ESTIMATED ADDITION WAS MADE BY THE A.O. ON THE BASIS OF PAPER FOUND 3 ITA 5692/ /M/2008 SH RI PARVEZ RAISI. DURING THE COURSE OF SEARCH. NO DIRECT EVIDENCE WAS FOUND BY THE DEPARTMENT THAT THE ASSESSEE WAS ALSO GETTING THE SAME AMOUNT PER DAY AFTER THE SEARCH. THEREFORE, THE SEIZED PAPER CANNOT BE THE BASIS FOR ESTIMATION OF INCOME OF THE ASSESSEE FOR THE PERIOD AFTER THE SEARCH. HE ACCORD INGLY SUBMITTED THAT THE PENALTY LEVIED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) SHOULD BE CANCELLED. HE ALSO RELIED ON VARIOUS DECISIONS AS PER THE WRIT TEN SUBMISSION FILED. 5. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT SINCE THE ORDER OF THE LD. CIT(A) IS PRIOR TO THE ORDER OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS, THEREFORE, THE MATTER SHOULD BE RESTORED TO THE FIL E OF THE A.O. FOR FRESH ADJUDICATION. 5.1 THE LD. COUNSEL FOR THE ASSESSEE, IN HIS REJOIN DER, WHILE OPPOSING THE ARGUMENT OF THE LD. D.R. FAIRLY AGREED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE A.O. TO DECIDE THE SAME AFRESH IN THE LIGHT OF THE VARIOUS DECISIONS CITED BY HIM. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. IN THE IMPUGNED CASE, WE FIND THE A.O. L EVIED PENALTY U/S 271(1)(C) ON ACCOUNT OF VARIOUS ADDITIONS MADE BY HIM IN THE ASSESSMENT ORDER WHICH WERE UPHELD BY THE LD. CIT(A). WHEN THE A.O. PASSE D THE PENALTY ORDER U/S 271(1)(C) OF THE ACT WHICH WAS CONFIRMED BY THE LD. CIT(A), THE QUANTUM APPEAL WAS PENDING BEFORE THE TRIBUNAL. NOW THAT THE TRIB UNAL HAS GIVEN CERTAIN RELIEF TO THE ASSESSEE WHICH IS AFTER THE PASSING OF THE P ENALTY ORDER, THEREFORE, IN ALL FAIRNESS, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER REQUIRES FRESH ADJUDICATION AT THE LEVEL OF THE A.O. WE, THEREFORE , DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO A DJUDICATE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE 4 ITA 5692/ /M/2008 SH RI PARVEZ RAISI. ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GRO UND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13.07.2011 I MMEDIATELY AFTER HEARING. SD/- SD/- (D. MANMOHAN) (R.K. PANDA) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED 13.7.2011 RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) VII, MUMBAI 4. THE CIT CENTRAL -1, MUMBAI 5. THE DR BENCH, C 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 5 ITA 5692/ /M/2008 SH RI PARVEZ RAISI. DATE INITIALS 1 DRAFT DICTATED ON 13.7.2011, SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 13.7.2011, SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER