DILIP M KEJARIWAL, MUMBAI V. ITO WD 14(2)(3), MUMBAI

ITA 6196/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8878 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 26-10-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-09-2011
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & RAVISH SOOD (JM) I.T.A. NO. 6196 /MUM/20 11 (ASSESSMENT YEAR 20 04 - 05 ) I.T.A. NO. 6197/MUM/2011 (ASSESSMENT YEAR 2007 - 08) MR. DILIP M. KEJARIWAL C/O. M/S. PRIYA INTERNA TIONAL, 413 COTTON EXCHANGE BUILDING, 134, KALBADEVI ROAD MUMBAI - 400 002. VS. ITO WARD 14(2)(3) MUMBAI. ( APPELLANT ) ( RESPONDENT ) PAN NO . AABPK9487E ASSESSEE BY SHRI HARESH P. SHAH DEPARTMENT BY S HRI PURUSHOTTAM KUMAR DATE OF HEARING 2 .1 . 201 7 DATE OF PRONOUNCEMENT 2 . 1 . 201 7 O R D E R PER BENCH: - BOTH THE APPEALS HAVE BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDERS PASSED BY LD CIT(A) - 25, MUMBAI FOR ASSESSMENT YEARS 2004 - 05 AND 2007 - 08. SINCE ONE OF THE ISSUES URGED IN BOTH THE AP PEALS IS COMMON IN NATURE, BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT AND SALE OF FERROUS AND NON - FERROUS METALS. THE BUSINESS I S BEING CARRIED ON BY THE ASSESSEE UNDER THE NAMES M/S PRIYA INTERNATIONAL AND VIVEK INTERNATIONAL. MR. DILIP M. KEJARIWAL 2 3. THE COMMON ISSUE URGED IN BOTH THE YEARS RELATE TO THE DISALLOWANCE OF INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. THE AO DISALLOWED THE INTERES T CLAIM MADE BY THE ASSESSEE IN BOTH THE YEARS ON THE REASONING THAT THE ASSESSEE DID NOT CARRY ON ANY BUSINESS. THE LD CIT(A) ALSO CONFIRMED THE SAME. 4. THE LD A.R SUBMITTED THAT THE AO HAD ALSO MADE IDENTICAL DISALLOWANCE S IN AY 2001 - 02 TO 2003 - 04 AND THE MATTER WAS TAKEN UP TO THE LEVEL OF THE TRIBUNAL. HE SUBMITTED THAT THE TRIBUNAL, VIDE ITS ORDER DATED 30 - 12 - 2011 PASSED IN ITA NO.6535, 6518 & 6534/MUM/2009, HAS RESTORED THIS ISSUE TO THE FILE OF THE AO FOR RECONSIDERATION OF THE SAME. HE SUBMI TTED THAT THE AO HAS ALLOWED THE INTEREST CLAIM OF THE ASSESSEE IN ALL THE THREE YEARS REFERRED ABOVE IN THE SET ASIDE PROCEEDINGS. ACCORDINGLY HE PLEADED THAT THE INTEREST CLAIM OF THE ASSESSEE SHOULD BE ALLOWED IN THESE TWO YEARS ALSO. 5. WE HEARD L D D.R . AND PERUSED THE RECORD. SINCE THE CO - ORDINATE BENCH OF THE TRIBUNAL HAS RESTORED AN IDENTICAL ISSUE IN AY 2001 - 02 TO 2003 - 04, WE PREFER TO RESTORE THIS ISSUE URGED IN BOTH THE YEARS TO THE FILE OF THE AO WITH THE IDENTICAL DIRECTIONS GIVEN BY THE C O - ORDINATE BENCH IN EARLIER YEARS. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD CIT(A) ON THIS ISSUE IN BOTH THE YEARS UNDER CONSIDERATION AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE SAME AFRESH IN THE LIGHT OF OBSE RVATIONS MADE BY THE TRIBUNAL IN AY 2001 - 02 TO 2003 - 04. 6. IN AY 2007 - 08, THE ASSESSEE HAS ALSO URGED ONE MORE ISSUE WITH REGARD TO THE ADDITION OF RS.13,23,000/ - RELATING TO DEPOSITS MADE INTO THE BANK ACCOUNT OF THE ASSESSEE. 7. THE LD A.R SUBMI TTED THAT THE ASSESSEE HAS DULY DISCLOSED THE BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE, IN HIS BOOKS OF ACCOUNTS MR. DILIP M. KEJARIWAL 3 AND ALL THE DEPOSITS AND WITHDRAWALS HAVE ALSO BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS. HE SUBMITTED THAT THE ASSESSEE HAS B EEN DEPOSITING MONEY ONLY TO PASS THE CHEQUES ISSUED BY HIM. HE SUBMITTED THAT THE DEPOSITS HAVE BEEN MADE BY USING THE CASH BALANCE AVAILABLE IN THE BOOKS OF ACCOUNTS. HE SUBMITTED THAT THE SOURCE OF CASH BALANCE WAS MOSTLY THE WITHDRAWALS MADE FROM THE BANK ACCOUNT IN THE EARLIER OCCASIONS. HE SUBMITTED THAT THE TAX AUTHORITIES HAVE NOT ACCEPTED THESE EXPLANATIONS OF THE ASSESSEE AND HAVE ASSESSED THE CASH DEPOSIT OF RS.13.23 LAKHS WITHOUT CONSIDERING THE BOOKS OF ACCOUNTS. 8. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAS NOT PROPERLY EXPLAINED THE SOURCES OF CASH DEPOSITS AND THE EXPLANATIONS FURNISHED BY THE ASSESSEE WERE NOT FOUND TO BE SATISFACTORY BY THE TAX AUTHORITIES. 9. WE HAVE HEARD THE PARTIES ON THIS ISSUE. WE NOTICE THAT THE ASSESSEE HAS EXPLAINED THE SOURCES OF CASH DEPOSITS MADE INTO THE BANK ACCOUNT AS THE BOOK BALANCE AVAILABLE IN THE BOOKS OF ACCOUNTS. HE HAS ALSO SUBMITTED THAT THE BOOK BALANCE WAS CREATED BY WITHDRAWING FUNDS FROM THE BANK ACCOUNTS. WE NOTICE THAT THE AO HAS NOT EXAMINED THE EXPLANATIONS OF THE ASSESSEE VIS - A - VIS THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT THE IMPUGNED BANK ACCOUNT WAS MAINTAINED OUTSIDE THE BOOKS OF ACCOUNTS. ACCORDING TO THE ASSESSEE, THE EARLIER WITHDRAWALS MADE FROM THE BANK ACCOUNT WAS USED TO MAKE DEPOSITS SUBSEQUENTLY. ACCORDING TO THE ASSESSEE BOTH THE WITHDRAWALS AND DEPOSITS HAVE BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE TAX AUTHORITIES SHOULD NOT HAVE IGNORED THE BOOKS OF ACCOUNTS BEFORE DECIDING THIS ISSUE AGAINST THE ASSESSEE, PARTICULARLY IN VIEW OF THE FACT THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED BY THEM. MR. DILIP M. KEJARIWAL 4 10. IN VIEW OF THE FOREGO ING REASONS, WE ARE OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXAMINATION AT THE END OF THE AO BY DULY CONSIDERING THE BOOKS OF ACCOUNTS AND OTHER EXPLANATIONS FURNISHED BY THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE SAME AFRESH IN THE LIGHT OF DISCUSSIONS MADE SUPRA. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 . 1 .201 7. SD/ - SD/ - (RAVISH SOOD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 / 1 / 20 1 7 COPY O F 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) PS ITAT, MUMBAI