SHETH METALS PVT. LTD., MUMBAI V. I.T.O. 5(3)(2), MUMBAI

ITA 5957/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100666 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M KESHKAMAT
• Assessee Lawyers: PRAKASH JHUNJHUNWALA
• Keywords: Gross profit estimation; Unexplained cash credit; Depreciation; Search and seizure; Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI E BENCH . . , , , BEFORE S/SH. A.D. JAIN,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 5957 /MUM/20 12 , / ASSESSMENT YEAR - 200 9 - 10 SHETH METALS PVT. LTD. 43, LAXMI NIWAS, 2 ND FLOOR 2 ND PANJARA POLE MUMBAI - 400 004. PAN: AAICS 8469 E VS. ACIT 7(2) AAYKAR BHAVAN,M K ROAD, MUMBAI - 20 ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY :SHRI PRAKASH JHUNJHUNWALA (AR) / REVENUE BY : SHRI S.M . KESH KAMAT - (DR) / DATE OF HEARING :05 - 08 - 2015 / DATE OF PRONOUNCEMENT :05 - 08 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE O RDER DT.16.07.2012 OF CIT(A) - 9, MUMBAI THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS PASSED AN ARBITRARY AND UNREASONABLE MANNER WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) HAS ERRED IN REJECTING THE BOOKS OF ACCOUNT OF THE APPELLANT U/S. 145(3) OF THE INCOME TAX ACT, 1961 AND HAS CALCULATED THE GROSS PROFIT ON ESTIMATED BASIS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) HAS ERRED BY ADDING A SUM OF RS. 39,26,766/ - TOWARDS LOWER GROSS PROFIT RATIO. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ADDING SHARE APP LICATION MONEY OF RS. 3,17,41,300/ - BEING UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE FACTS OF THE CASE. 5. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN ADDING UNSECURED LOANS OF RS. 1,22,07,642/ - BEING UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE FACTS OF THE CASE. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) HAS ERRED IN ADDING A SUM OF RS. 21,41,449/ - TOWARDS INTEREST PAID PRIOR TO FEB 2009 I.E. THE DATE ON WHICH THE COMMERCIAL PRODUCTION STARTED, WITHOUT CONSIDERING THE FACTS OF THE CASE THAT THE PRODUCTION HAS BEEN STARTED FROM JUNE 2 008 ONLY. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISALLOWING THE DEPRECIATION OF RS. 40,07,869/ - I.E. FOR HALF OF THE YEAR BECAUSE THE COMMERCIAL PRODUCTION STARTED SINC E FEB 2009 ONLY WITHOUT CONSIDERING THE FACTS OF THE CASE THAT THE PRODUCTION HAS BEEN STARTED FROM JUNE 2008 ONLY. 5957SHETH METAL 2 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OR ALL GROUNDS TILL THE DISPOSAL OF THE APPEAL. ASSESSEE - COMPANY,E NGAGED IN THE BUSINESS OF TRADING OF METAL, FILED ITS RETURN OF INCOME,ON 29. 09. 2009, DECLARING TOTAL INCOME AT RS.3.90 LACS.THE ASSESSING OFFICER(AO) COMPLETED THE ASSESSMENT ON 26.12. 2011, U/S.144 OF THE ACT,DETERMINING THE INCOME OF THE ASSESSEE AT RS.5. 44 CRORES. 2. DURING THE COURSE OF HEARING BEFORE US, THE AUTHORISED REPERESENTATIVE(AR)STATED THAT THE ASSESSEE HAD FILED AN APPLICATION FOR ADMITTING ADDITIONAL EVIDENCE,THAT AN AFFIDAVIT OF THE MD OF THE COMPANY HAD BEEN FILED IN THAT REGARD,THAT DUE TO SEARCH AND SEIZURE PROCEEDINGS CARRIED OUT BY THE SALES TAX DEPARTMENT AND THE CENTRAL EXCISE DEPARTMENT THE ASSESSEE COULD NOT APPEAR BEFORE THE AO OR THE FIRST APPELLATE AUTHORITY(FAA),THAT THE BOOKS OF ACCOUNTS WERE SEIZED BY EITHER OF THE DEPARTMENTS, THAT HE COULD GET THE CERTIFIED COPIES FROM THE DEPARTMENTS,THAT THE DOCUMENTS IN ITS POSSESSION WOULD HAVE BEARING EFFECT ON THE OUTCOME OF THE APPEAL,THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT PRODUCING THE DOCUMENTS.DEPARTMENTAL REPRESE NTATIVE (DR)LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 3. WE HAVE PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD NOT APPEARED BEFORE THE AO OR THE FAA,THAT THE AO HAD PASSED BEST JUDGMENT ORDER,THAT THE FAA HAD CONFIRMED THE ORDER OF THE AO,THAT THE SALES TAX DEPARTMENT AND THE CENTRAL EXCISE DEPARTMENT HAD SEIZED THE DOCUMENTS OF THE ASSESSEE ,THAT IT COULD NOT PRODUCE THE SAME BEFORE THE DEPARTMENTAL AUTHORITIES, THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FOR NOT PRODUCING THE DO CUMENTS. THEREFORE, IN THE INTEREST OF JUSTICE,WE ARE REMITTING BACK THE MATTE TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH.HE WILL AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND ADJUDICATE THE MATTER AFTER CONSIDERING THE DOCUMENTS SUB MITTED BEFORE US. AS A RESULT,APPEAL FILED BY THE ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. . ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH ,AUGUST,2015. 5 , 2015 SD/ - SD/ - ( . . /A. D. JAIN) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 05 . 08 . 2015 . . . JV . SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 5957SHETH METAL 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTR AR , / ITAT, MUMBAI.