DCIT- 14 (1)(1), MUMBAI V. AUTOGRAPH CARS (INDIA) PVT. LTD., MUMBAI

ITA 5800/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6068 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Additional evidence; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI SHAMIM YAHYA (AM) & SHRI PAWAN SINGH (J .M.) ITA NO. 5800/MUM/2018(ASSESSMENT YEAR : 2011-12) DY.CIT(A)-14(1)(1), MUMBAI VS M/S AUTOGRAPH CARS (INDIA) PVT LTD MEHRA COMPOUND, ANDHERI KURLA ROAD, OPP SAKI NAKA, TELEPHONE EXCHANGE, ANDHERI (E), MUMBAI-72 PAN : AAFCA0420J APPELLANT RESPONDEDNT APPELLANT BY SHRI MICHAEL JERALD RESPONDENT BY NONE DATE OF HEARING 29-01-2020 DATE OF PRONOUNCEMENT 29-01-2020 O R D E R PER PAWAN SINGH, JM : THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST ORDER OF CIT(A)-16, MUMBAI DATED 11-07-2018 WHICH ARISES FROM ASSESSMENT ORDER DATED 01-03-2014 U/S 143(3) FOR ASSESSMENT YEAR 2011-12. THE REVENUE HA S RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS OF THE INSTANT CASE AND IN LAW, THE LD.CIT(A) ERRED IN DIRECTING THAT CURRENT YEAR LOSS OF RS. 1,67,80,826 /- IS TO BE ALLOWED TO BE CARRIED FORWARD. 2. WHETHER ON THE FACTS OF THE INSTANT CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT ADDITIONAL EVIDENCE ARE ADMITTED BECAUSE DUE T O FIRE AT THE ASSESSEE'S OFFICE & BRAIN STROKE OF ONE DIRECTOR, THE SITUATION WAS BEY OND THE CONTROL OF THE ASSESSEE AT THE TIME OF THE ASSESSMENT, WHEREAS THE FACT REMAINS TH AT AS PER ASSESSEE'S OWN VERSION, THE RECORDS WERE COMPLETELY DESTROYED. 3. WHETHER ON THE FACTS OF THE INSTANT CASE AND IN LAW, THE CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT ASSESSEE'S COMMENTS ON RE MAND REPORT STATES THAT THE RECORDS 2 ITA 5800/MUM/2018 WERE 'BIT DISORGANISED' WHICH CONTRADICTED THE CLAI M THAT THE RECORDS WERE 'COMPLETELY DESTROYED' & HENCE ADDITIONAL EVIDENCE SHOULD NOT HAVE BEEN ADMITTED. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPAN Y IS ENGAGED IN THE BUSINESS OF AUTOMOBILE SALES AND SERVICES, FILED IT S RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 ON 30-09-2011 DECLARING LOS S AT RS.3,23,31,892/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSM ENT, THE AO ASKED THE ASSESSEE TO SUBSTANTIATE THE CLAIM OF BUSINESS LOSS IN THE CURRENT YEAR. THE ASSESSEE DURING THE ASSESSMENT STATED THAT IT WAS N OT POSSIBLE FOR THE ASSESSEE TO SUBSTANTIATE VARIOUS LOSSES INCLUDING THE INCOME EA RNED AND THE EXPENSES INCURRED AS THE ASSESSEE WAS NOT IN POSSESSION OF A NY BOOKS OF ACCOUNT WHICH WERE DESTROYED DUE TO FIRE IN THE PREMISES OCCURRED ON 27-07-2010. THE ASSESSEE, HOWEVER, HAS FILED ITS LEDGER ACCOUNT WHI CH WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THE ASSESSEE FURNISHED THE C OPY OF FIRE REPORT NO.882 OF 2014 ISSUED BY DEPUTY CHIEF FIRE OFFICER, MUMBAI . THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY AO HOLDING THAT WITHOU T VERIFICATION OF RECORD, THE LOSS RETURNED BY ASSESSEE REMAINED UNEXPLAINED AND, THEREFORE, ENTIRE LOSS WAS REJECTED. ON APPEAL BEFORE CIT(A), THE ACTION OF A O WAS REVERSED. THUS, AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS F ILED PRESENT APPEAL.- 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE THROUGH REGISTERED POST ACKNOWLEDGEMENT DUE AS WELL AS SERV ICE THROUGH DR. THEREFORE, WE ARE LEFT WITH NO OPTION EXCEPT TO DECIDE THE APP EAL AFTER HEARING THE 3 ITA 5800/MUM/2018 SUBMISSION OF LD. DR FOR THE REVENUE AND THE MATERI AL AVAILABLE ON RECORD. THE LD .DR FOR THE REVENUE SUBMITS THAT BEFORE THE AO, THE ASSESSEE TOOK A STAND THAT THEY WERE UNABLE TO PRODUCE ANY DOCUMENTS DUE TO FIRE WHICH DESTROYED THE DOCUMENTS. THE LD. CIT(A) ALLOWED RELIEF TO THE AS SESSEE IN ABSENCE OF ANY DOCUMENT. THE LD. CIT(A) IN HIS ORDER AT PARA 6.1. 1 HAS RECORDED THAT APPLICATION FOR ADDITIONAL EVIDENCE U/R 46A WAS FIL ED BEFORE HIM. THE LD. CIT(A) HAS NOT DISCUSSED THE DETAILS OF DOCUMENT AN D ITS RELEVANCE ON THE ISSUE ON WHICH RELIEF WAS GRANTED. THE ASSESSING OFFICER FURNISHED REMAND REPORT AND OBJECTED FOR ADMISSION OF ADDITIONAL EVIDENCE AS BE FORE THE AO THE FIRM STAND OF THE ASSESSEE WAS THAT NO DOCUMENTS TO SUBSTANTIATE THE LOSS WAS AVAILABLE. 4. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT BEFORE THE AO, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE. THEREFORE, THE LOSS CLAIMED FOR THE CURRENT YEAR WAS REJECTED. THE ASSESSEE ALSO CLAIM ED CARRY FORWARD OF LOSSES FROM AYS 2009-10 AND 2010-11. IN ABSENCE OF ANY EV IDENCE, THE CLAIM OF CARRY FORWARD LOSSES WAS ALSO REJECTED. BEFORE LD. CIT(A ), THE ASSESSEE FILED EVIDENCE CLAIMING TO BE ADDITIONAL EVIDENCE IN THE FORM OF VARIOUS BILLS AND VOUCHERS. THE LD. CIT(A) ASKED FOR REMAND REPORT F ROM THE AO. THE LD. CIT(A) RECORDED THAT THE AO FURNISHED HIS REMAND RE PORT DATED 02-07-2018 THROUGH RANGE HEAD. THE EXTRACT OF REMAND REPORT I S REPRODUCED AT PARA 6.1.3. 4 ITA 5800/MUM/2018 IN THE REMAND REPORT, THE AO OBJECTED FOR PRODUCING EVIDENCE BEFORE APPELLATE STAGE. THE AO ALSO STATED THAT CLAIM OF BAD DEBT, SERVICE CHARGE, LEGAL CHARGES WERE NOT VERIFIABLE. THE LD. CIT(A), AFTER CONSIDE RING THE SUBMISSION OF ASSESSEE GRANTED PART RELIEF TO THE ASSESSEE. THE LD.CIT(A) DISALLOWED THE CLAIM OF BAD DEBT, ALLOWED THE SERVICE CHARGE TO TH E EXTENT OF RS.2,52,297/-. AND OUT OF OTHER EXPENSES OF RS. 5,24,884/-, 50% WA S ALLOWED ON ADHOC BASIS. SIMILARLY, THE LEGAL EXPENSES WERE ALLOWED TO THE E XTENT OF 50%. THE LD.CIT(A) RECORDED THAT DURING THE APPELLATE PROCEE DINGS, THE ASSESSEE FILED ASSESSMENT ORDER FOR AY 2009-10 DATED 24-12-2011 PA SSED U/S 143(3) WHEREIN THE LOSS OF RS.7.08 CRORES WAS ASSESSED. NOW THE G RIEVANCES OF AO BEFORE US IS WITH REGARD TO THE PARTIAL LOSS ALLOWED TO THE ASSE SSEE BY LD.CIT(A). WE HAVE NOTED THAT LD. CIT(A) DESPITE OBJECTION OF AO ABOUT THE ADMISSION OF ADDITIONAL EVIDENCE BEING NOT VERIFIABLE ADMITTED THE EVIDENCE . WE HAVE FURTHER SEEN THAT DESPITE THE FACT THAT BEFORE AO THAT ASSESSEE HAS T AKEN A CONTRARY STAND, THAT NO DOCUMENT WAS AVAILABLE; HOWEVER, BEFORE CIT(A), THE ASSESSEE FURNISHED CERTAIN VOUCHERS AND BILLS ON THE BASIS OF WHICH LD.CIT(A) ALLOWED ADHOC RELIEF. IN OUR VIEW, THE RELIEF GRANTED BY LD. CIT(A) ON ADHOC BAS IS WITHOUT GIVING OPPORTUNITY TO THE AO FOR VERIFYING VARIOUS CLAIMS, AND PARTICULARLY IN ABSENCE OF VERIFIABLE EVIDENCES IS NOT JUSTIFIED. THEREFOR E, THE ORDER OF LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO TO ADJUDICATE IT AFRESH. 5 ITA 5800/MUM/2018 NEEDLESS TO ORDER THAT BEFORE PASSING THE ORDER, TH E AO SHALL GIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29-01-2020 . SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 29 TH JANUARY, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI