SURA SHAILESH R., MUMBAI V. ITO 25(3)(4), MUMBAI

ITA 5717/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8326 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 05-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 26-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR SINGH
• Assessee Lawyers: ARUN SATHE
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.5717/MUM/2009(A.Y. 2005-06) SHAILESH R. SURA, FLAT NO.1204, RAHUL BUILDING, SAIBABA NAGAR EXTN., SKY BUILD VILLAGE, KANDIVALI (W), MUMBAI -67 PAN: AAQPS 7244G (APPELLANT) VS. THE ITO 25(3)(4), AAYKAR BHAVAN, MUMBAI 20. (RESPONDENT) APPELLANT BY : SHRI ARUN SATHE RESPONDENT BY : SHRI PRADEEP KUMAR SING H DATE OF HEARING : 12/11/2012 DATE OF PRONOUNCEMENT : 12 /11/2012 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)XXVI, MUMBAI DATED 06/0 7/2009 FOR ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL RAI SED BY THE ASSESSEE READ AS UNDER: WITHOUT PREJUDICE TO ANY OTHER CONTENTIONS THAT MAY BE RAISED AT THE TIME OF HEARING OF APPEAL, THE MAIN GROUNDS OF APPEAL ARE: 1. THAT THE ORDER PASSED BY THE LEARNED COMMISSIONE R OF INCOME TAX (A) AND THAT BY THE OFFICER IS BED IN LAW, VOID AND DES ERVES TO BE QUASHED. 2. THAT THE OFFICER HAS GROSSLY ERRED IN MAKING H UGE ADDITION OF RS. 61,77,671/-WITHUT CONSIDERING THE DETAILS AND EVID ENCES PRODUCED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ITA NO.5717/MUM2009(A.Y. 2005-06) 2 3. IT IS INTERESTING TO NOTE THAT THE OFFICER ON VE RY FIRST PAGE OF THE ASSESSMENT ORDER HAS STATED THAT THE ASSESSEE HAS FILED VARIO US DETAILS AND EXPLAINED THE RETURN OF INCOME, THEN THERE WAS NO ROOM FOR T HE OFFICER TO DISBELIEVE THE FACTS AND TO MAKE HUGE ADDITION WITHOUT ANY COGENT REASON OR EVIDENCE. 4. THAT THE OFFICER WAS WRONG IN MAKING SUCH HUGE A DDITION OF RS.61,77,671/- WITHOUT OBTAINING CORRECT FACTS FROM M/S. NIRMA LTD . FROM WHOM PURCHASES WERE MADE. BY ONLY OBTAINING THE INFORMATION UNDER SEC.133(6) FROM THE SAID PART WOULD NOT IPSO FACTO PROVE THAT THE INFORMATIO N FURNISHED IS CORRECT. 5. AT LEAST ONE CANNOT GO TO SUCH VAST DIFFERENCE I N PAYING THE AMOUNT. AS STATED BY THE OFFICER THAT THE LEDGER ACCOUNT OF M/ S. NIRMA LTD. SHOWS THE FIGURE AT RS. 2742/- ONLY WHERE AS THE APPELLANT H AS SHOWN THE FIGURE OF RS.61,77,671/-. 6. THAT THE OFFICER SHOULD HAVE SUMMONED BOTH THE P ARTIES AND SHOULD HAVE CROSS EXAMINED THEM AND THEN SHOULD HAVE COME TO PR OPER CONCLUSION. 71. THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.61,77,671/- BY TREATING THE PURCHASES SHOWN AS BOGUS, UNWARRANT ED AND SUPERFLUOUS, AND TREATED THE SAID EXPENSES AS PROFIT AND GAIN OF BUS INESS. 8. THAT THE OFFICER AS WELL AS THE LEARNED CIT(A) F AILED TO APPRECIATE THE FACT THAT THE APPELLANT HAD ALREADY DISCLOSED THE ABOVE AMOUNT IN SUBSEQUENT ASSESSMENT YEARS, AND THEREFORE THE ADDITION IN THE YEAR UNDER APPEAL AMOUNTS TO DUAL TAXATION, HENCE THE WHOLE AMOUNT D ESERVES TO BE DELETED. 9. THAT THE OFFICER GROSSLY ERRED IN ADDING RS.4270 60/-AS TRANSPORT EXPENSES AND THE LEARNED CIT(A) EQUALLY CONFIRM THE SAID ADD ITION. 10. THAT THE AUTHORISED REPRESENTATIVE OF THE APPEL LANT DURING THE COURSE OF APPEAL PROCEEDINGS HAD WITHDRAWN GROUND IN RESPECT OF TRANSPORT EXPENSES, ADDED AT RS.427060/- BY MISTAKE. THE APPELLANT NOW DESIRES TO PRESS THIS GROUND IN THIS APPEAL . SECTION 40(A)(IA) VERY SPEC IFICALLY STATES THAT ANY INTEREST OR COMMISSION OR BROKERAGE, FEES FOR PROFE SSIONAL SERVICES, OR TECHNICAL SERVICES, PAYABLE TO A RESIDENT FOR CARRYING OUT AN Y WORK,[ INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK] ON WHICH TAX IS D EDUCTIBLE AT SOURCE, AND SUCH TAX HAS NOT BEEN DEDUCTED ,OR AFTER DEDUCTION HAS NOT BEEN PAID. 11. THAT THE APPELLANT PRAYS THAT THE ABOVE GROUNDS OF APPEAL MAY PLEASE BE CONSIDERED AND FAIR JUSTICE BE GIVEN. 2. THE ASSESSEE IN THE PRESENT CASE IS DEALER IN TH E CHEMICALS & PHARMACEUTICALS. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THE AO REQUIRED THE ASSESSEE TO FURNISH EXPLANATION ABOUT CREDIT LIABILITIES OF RS.61,77,671/-, FOR WHICH THE NOTICES UNDER SECTION 133(6) OF THE ACT WERE ITA NO.5717/MUM2009(A.Y. 2005-06) 3 ALSO ISSUED. IN ABSENCE OF ANY EXPLANATION FILED B Y THE ASSESSEE OR PRODUCTION OF BOOKS OF ACCOUNT THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ADDITION WAS AGITATED IN APPEAL FILED BEFORE LD. CIT(A). IT WAS CLAIMED THAT THE SAID AMOUNT WAS OFFERED TO TA X IN SUBSEQUENT YEARS. THE DETAILS WERE ALSO FURNISHED. IT WAS SUBMITTED THAT ASSESSEE COULD NOT PRODUCE THE EVIDENCE AS THE BOOKS OF ACCOUNT WERE I MPOUNDED BY THE VAT AUTHORITIES VIDE THEIR ORDER DATED 7/2/2007, COPY O F WHICH IS PLACED AT PAGE -7 OF THE PAPER BOOK. IN ABSENCE OF SUCH EVIDENCE, WHICH WAS IN POSSESSION OF VAT AUTHORITIES THE ASSESSEE COULD NOT GIVE PROP ER EXPLANATION. HOWEVER, LD. CIT(A) CONFIRMED THE ADDITION. THE ASSESSEE IS AGGRIEVED AND HENCE HAS FILED THE AFOREMENTIONED APPEAL. 3. AT THE OUTSET IT WAS SUBMITTED BY LD. AR THAT TO FULFILL THE INTEREST OF JUSTICE THE MATTER SHOULD BE RESTORED BACK TO THE F ILE OF AO FOR DE-NOVO CONSIDERATION OF THE ISSUE RAISED IN THE PRESENT AP PEAL. LD. A.R SUBMITTED THAT THERE ARE VARIOUS ASPECTS WHICH ARE TO BE EXA MINED BEFORE CONSIDERING THE APPROPRIATENESS OF THE ADDITION TO BE MADE IN THE IMPUGNED ASSESSMENT YEAR AND AS THE PROPER OPPORTUNITY COULD NOT BE AVAILED BY THE ASSESSEE IN ABSENCE OF BOOKS OF ACCOUNTS WHICH ARE STILL IN THE POSSESSION OF VAT AUTHORITIES, THE ASSESSEE MAY BE GIVEN ONE MORE CHANCE AS COPIES OF DOCUMENTS HAVE ALREADY BEEN OBTAINED BY THE ASSESSE E. 4. ON THE OTHER HAND, LD. D.R RELIED UPON THE ORDER S PASSED BY AO AND LD. CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US, WITHOUT GOING INTO MERIT S OF THE ISSUE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINIO N THAT THE REQUEST MADE BY LD. A.R SHOULD BE ACCEPTED TO FULFILL THE INTERE ST OF JUSTICE, THEREFORE, WE RESTORE THIS ISSUE TO THE FILE OF AO FOR DE-NOVO CO NSIDERATION WITH A DIRECTION TO PERMIT THE ASSESSEE TO PLACE ON RECORD ALL THE E VIDENCES WHICH THE ITA NO.5717/MUM2009(A.Y. 2005-06) 4 ASSESSEE WANTS TO RELY. IT IS MADE CLEAR THAT ONUS WILL BE ON THE ASSESSEE TO PROVE THAT NO ADDITION IS CALLED FOR ON THIS ACCOUN T. AFTER GIVING OPPORTUNITY TO THE ASSESSEE IN THE AFOREMENTIONED MANNER, THE A O WILL DECIDE THIS ISSUE DE-NOVO AS PER THE PROVISIONS OF LAW. 6. THE SECOND ISSUE IS REGARDING ADDITION OF RS. 4, 27,060/- ON ACCOUNT OF TRANSPORT EXPENSES. AS THE MAIN ISSUE IS BEING RESTORED TO THE FILE OF AO, THIS ISSUE IS ALSO RESTORED TO THE FILE OF AO WITH SIMILAR DIRECTION. 7. IN VIEW OF THE ABOVE DISCUSSIONS, BOTH ISSUES RA ISED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THE 12 TH DAY OF NOV. 2012 SD/- SD/- (RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 12 TH NOV. 2012. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R I BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.5717/MUM2009(A.Y. 2005-06) 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 12/11/2012 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 14/11/2012 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER