GIGI REJI THOMAS, MUMBAI V. I.T.O. 19(2)(4), MUMBAI

ITA 5958/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88025 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 18-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2012
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Principle of natural justice; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.5958/M/2012 ( / ASSESSMENT YEAR: 2008 - 2009 ) GIGI REJI THOMAS, C - 101, GOLDEN SQUARE, OFF CST ROAD, SUNDER NAGAR, KALINA, MUMBAI 400 098. / VS. ITO - 19(2)(4), 1 ST FLOOR, PIRAMAL CHAMBERS, MUMBAI 400 012. ./ PAN : AAVP0856C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI JITENDRA SINGH / RESPONDENT BY : SHRI VIVEK BATRA / DATE OF HEARING : 18.12.2014 / DATE OF PRONOUNCEMENT : 14 .01.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 1.10.2012 IS AGAINST THE ORDER OF THE CIT (A) - 30, MUMBAI DATED 25.5.2012 FOR THE ASSESSMENT YEAR 2008 - 2009. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN UPHOLDING THE CONTENTION OF THE ASSESSING OFFICER FOR DISALLOWANCE OF THE COST F IMPROVEMENT OF RS. 2,95,400/ - WHICH AFTER INDEXATION COMES TO RS. 3,39,095/ - HAS NON - GENUINE AND DI SALLOWED THE SAME IN THE ABSENCE OF CONFIRMATION FROM THE PARTIES WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAD SUBMITTED COPIES AND ALL BILLS, BANK STATEMENTS AND OTHER SUPPORTING EVIDENCES CALLED FOR TIME TO TIME. 2. THE LD CIT (A) HAS FAILED TO P ASS A SPEAKING ORDER AND NEITHER THE ASSESSING OFFICER NOR THE CIT (A) HAS DISPUTED THE CAPITALIZATION OF EXPENSES BUT HAS BEEN DISALLOWED FOR WANT OF CONFIRMATION AND THUS DEPRIVING THE ASSESSEE OF NATURAL JUSTICE. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 30,43,159/ - AND CLAIMED CAPITAL GAINS IN THE RETURN OF INCOME. DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT THE ASSESSEE INCURRED A SUM OF RS. 2 ,95,400/ - TOWARDS COST OF IMPROVEMENT. 2 ALTHOUGH THE ASSESSEE FURNISHED THE DETAILS OF EXPENDITURE AND THE PAYMENTS MADE BY THE ASSESSEE TO THE INTERIOR DESIGNERS AND FURNITURE CONTRACTORS BY WAY OF CONFIRMATION LETTERS, ASSESSING OFFICER DISALLOWED THE SA ID CLAIM OF COST OF IMPROVEMENT AND MADE ADDITION IN THE ASSESSMENT MADE U/S 143(3) OF THE ACT. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE FURNISHED THE WRITTEN SUBMISSIONS M ADE BEFORE THE ASSESSING OFFICER. HOWEVER, HE COULD NOT FILE THE CONFIRMATIONS FROM THE LABOUR CHARGES. ASSESSEE SUBMITTED THAT THESE WORKERS MOVE FROM PLACE TO PLACE AND DUE TO LOSS OF TIME THEY ARE NOT AVAILABLE FOR OBTAINING CONFIRMATIONS AT THIS POIN T OF TIME. HOWEVER, HE SUBMITTED THAT CONTRACTORS WERE ALSO DIRECTLY KNOWN TO THE ASSESSEE. CIT (A) CONSIDERED THE SAME AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER CONSIDERING THE ABSENCE OF CONFIRMATION LETTERS. AGGRIEVED WITH THE SAID OR DER OF THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PAPER BOOK AND MENTIONED THAT THE IMPUGNED IMPROVEMENTS TO THE ASSET WERE DONE IN THE KITCHEN AND OTHER WOODEN / CIVIL WORKS WHICH ARE MINOR IN NATURE. THE PAYMENTS WERE MOSTLY MADE IN CHEQUES AND PARTLY BY SELF - CHEQUES. THE DETAILS ARE PLACED AT PAGE 3 TO 16 OF THE PAPER BOOK. 5. ON THE OTHER HA ND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. IN PAGE 3 OF THE PAPER BOOK REFERENCE WAS MADE WITH REGARD TO THE MODE OF PAYMENT TO THE CONTRACTORS BY NAME BHARAT CONTRACTOR AND VISHWAKARMA DECORATORS. THE DETAILS AND ADDRESSES OF THESE CONTRACTORS ARE AVAILABLE ON THE LETTER HEADS PLACE PAGE 13 TO 16 OF THE PAPER BOOK . THE DETAILS OF WORKS DONE BY THEM WERE AL SO AVAILABLE IN THE RECORDS. THUS, ASSESSEE DISCHARGED PRELIMINARY ONUS AND ASSESSING OFFICER SHOULD HAVE TAKEN UP THE FURTHER INVESTIGATION, IF ANY, WITH THE CONTRACTORS. IT IS THE IN THE MARKET THAT THE LABOUR KEEP MOVING FROM CONTRACT TO CONTRACT / PR EMISES TO PREMISES. ONCE A 3 CONTRACT IS COMPLETED IT IS NOT FOR THE ASSESSEE TO KEEP TRACK OF SUCH LABOURERS / WORKERS. IN OUR OPINION THE IMPROVEMENTS APPEAR GENUINE TO US. CONSIDERING THE CONTRARY EVIDENCE NOT BROUGHT OUT BY THE ASSESSING OFFICER, WE ARE OF THE OPINION THAT THE ASSESSEE IS ENTITLED TO RELIEF. AS SUCH THE ORDER OF THE CIT (A) GIVEN IN PARA 2.3 OF HIS ORDER IS TOO SCANTY AND THE SAME IS REQUIRED TO BE REVERSED ON THIS ISSUE. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 7. CONSIDERING OUR DECISION GIVEN IN GROUND NO.1, THE ADJUDICATION OF GROUND NO.2 BECOMES INFRUCTUOUS. ACCORDINGLY, GROUND NO.2 IS DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. ORDER PR ONOUNCED IN THE OPEN COURT ON 1 4 T H JANUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 4 .1.2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI