I.T.O.3(1)(2), MUMBAI V. BHAGAT HOUSING DEVELOPMENT PVT. LTD., MUMBAI

ITA 5984/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3185 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 11-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2012
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Keywords: Opportunity of being heard
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 5984 /MUM/ 20 12 (ASSESSMENT YEAR 200 8 - 0 9 ) ITO - 3(1)(2) AAYAKAR BHAVAN ROOM NO. 666 M.K. ROAD MUMBAI - 400 020. VS. M/S. BHAGAT HOUSING D EVELOPMENT PVT. LTD. 601, MAKER CHAMBER V NARIMAN POINT MUMBAI - 400 021. ( APPELLANT ) ( RESPONDENT ) PAN NO . AACCB5503G ASSESSEE BY NONE DEPARTMENT BY S MT. VINITA MENON DATE OF HEARING 15 . 6. 201 6 DATE OF PRONOUNCEMENT 15 . 6 . 201 6 O R D E R PE R B.R. BASKARAN, A M : - THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.7.2012 PASSED BY LD CIT(A) - 5, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2008 - 09. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DELETING THE ADDITION O F RS.2.77 CRORES RELATING TO SUNDRY CREDITORS. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN THOUGH THE ASSESSEE HAD PARTICIPATED IN THE EARLIER PROCEEDINGS. HENCE WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3. WE HEARD LD D.R AND PERUSED THE RECORD. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) OF THE ACT TO SOME OF THE SUNDRY CREDITORS, BUT THE NOTICES WERE NOT SERVED. THOUGH THE ASSESSEE FURNISHED CONFIRMATION LETTERS OBTAINED FROM SOME OF THE CRE DITORS, YET THE AO CHOSE TO ASSESS THE ENTIRE BALANCE OF SUNDRY CREDITORS AS INCOME OF THE ASSESSEE. IN THE APPELLATE PROCEEDINGS, THE M/S.BHAGAT HOUSING DEVELOPMENT PVT. LTD. 2 LD CIT(A) NOTICED THAT MOST OF THE CREDITORS ARE OLD CREDITORS AND THEIR OUTSTANDING BALANCES IN THE PRECEDING YEAR WAS NOT DOUBTED. HE FURTHER OBSERVED THAT THE ASSESSEE HAS ENTERED INTO FRESH TRANSACTIONS DURING THE YEAR WITH ONLY TWO PARTIES, VIZ., M/S FAMOUS TIMBER TRADERS AND M/S SURYA ELECTRICALS. FURTHER IT WAS SEEN THAT THE ASSESSEE HAS DEDUCTED TAX AT SOURCE ON A PPLICABLE CASES. ACCORDINGLY, THE LD CIT(A) HELD THAT THE CREDITORS WERE GENUINE AND ACCORDINGLY DELETED THE ADDITION. 4. HOWEVER, ON A PERUSAL OF THE ORDER PASSED BY LD CIT(A), WE NOTICE THAT THE LD CIT(A) HIMSELF HAS RECORDED IN PARAGRAPH 2.20 OF HI S ORDER THAT THE ASSESSEE HAD TRANSACTIONS WITH 17 PARTIES AND TDS HAS BEEN DEDUCTED AGAINST 13 PARTIES. THUS THE OBSERVATION OF LD CIT(A) THAT FRESH TRANSACTIONS WERE ENTERED WITH ONLY TWO APPEARS IS CONTRADICTORY. THE DEDUCTION OF TDS MAY BE A GROUND T O JUDGE THE GENUINENESS OF TRANSACTIONS. BUT THE CASE OF THE AO WAS ABOUT THE BALANCE OUTSTANDING ON 31.3.2008 AND NOT ABOUT THE GENUINENESS OF TRANSACTIONS. TO THAT EXTENT, IN OUR VIEW, THE LD CIT(A) HAS MISDIRECTED HIMSELF. 5. HOWEVER, WE AGREE W ITH THE VIEW TAKEN BY LD CIT(A) THAT, IF THE BALANCE IS BROUGHT FORWARD FROM EARLIER YEARS, THE SAME CANNOT BE ASSESSED DURING THE YEAR UNDER CONSIDERATION. TO THAT EXTENT, WE UPHOLD THE ORDER OF LD CIT(A). IN RESPECT OF REMAINING CREDITS, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD PROVE THE CLOSING BALANCE SHOWN IN THE BOOKS. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) PASSED ON THIS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO DELETE THE ADDITION REPRESENTING OPENING BALANCE AND RE - EXAMINE THE REMAINING AMOUNT OF ADDITION BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. M/S.BHAGAT HOUSING DEVELOPMENT PVT. LTD. 3 6. IN THE RESULT, THE APPEAL FIL ED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 15 . 6 .2016 . SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 1 5 / 6/ 20 1 6 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. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS