CHINMAY AGRICULTURAL HOUSING, MUMBAI V. INCOME TAX OFFICER-21(1)(3), MUMBAI

ITA 6253/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3760 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 16-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARHIKEYAN
• Keywords: Unexplained cash credit; TDS
• Section: 40(a)(ia); 69B

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE SH. SANDEEP GOSAIN, JM & HONBLE SH. N. K. PRADHAN, AM ./ I.T.A. NO . 6253/MUM/2017 ( / ASSESSMENT YEAR: 2012 - 13 ) CHINMAY AGRICULTURAL HOUSING, 118, DEVI BHAVAN , OPP - MATUNGA WESTERN RAILWAY STATION, SENAPATI BAPAT MARG, MATUNGA (WEST), MUMBAI. / VS. ITO - 21(1)(3 ) , 106, PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400 012 ./ ./ PAN NO. A A GFC9736K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : SHRI ABI RAMA KARHIKEYAN , D R / DATE OF HEARING : 18 .0 2 .201 9 / DATE OF PRONOUNCEMENT : 18.02.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 33 , MUMBAI DATED 06.07.2017 F OR AY 2012 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING 1. A.....ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. ASSESSING OFFICER HAS - ERRED IN MAKING ADDITION OF RS. 1,27,44,095/ - U/S. 69B. LD. CIT - A HAS ERRED IN CONFIRMING THE ADDITION. B.....ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN JAW, LD. AO ERRED IN NOT APPRECIATING THAT CREDIT BALANCES OR UNEXPLAINED CREDIT BALANCES OF THE PART NERS OF THE FIRM CANNOT LEAD TO ADDITION U/S. 69B. LD. CIT - A HAS ERRED IN CONFIRMING THE ADDITION. C... ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. AO ERRED IN NOT VERIFYING THE CREDIT BALANCES OF THE PARTNERS IN THE BOOKS OF RESPECTIVE P ARTNERS AND NOT VERIFYING WITH CONCERNED PARTNERS.LD. CIT - A HAS ERRED IN CONFIRMING THE ADDITION. 2. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. AO ERRED IN MAKING A FRESH DISALLOWANCE OF EXPENDITURE OF RS. 3,39,000/ - U/S. 40(A)(IA) IN T HE REMAND REPORT WHICH TANTAMOUNTS A DISALLOWANCE BEYOND THE ASSESSMENT ORDER AND FALLING BEYOND THE MANDATE OF REMAND ITSELF. LD. CIT - A ERRED IN ALLOWING SUCH DISALLOWANCE. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY OF THE ABOVE GR OUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL, IF NECESSARY. 3 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. FROM THE RE CORD, WE OBSERV ED THAT NOTICE THROUGH RPAD WAS SENT UPON THE ADDRESS SUPPLIED BY THE ASSESSEE. HOWEVER THE SAME WAS RETURNED BACK WITH THE REMARKS LEFT BY POSTAL AUTHORITIES. IN SUCH CIRCUMSTANCES, ASSESSEE WAS UNDER OBLIGATION TO PROV IDE NEW ADDRESS BUT THE SAME HAD NOT BEEN DONE. T HEREFORE WE HAVE NO OTHER OPTION EXCEPT TO PROCEED THE ASSESSEE EX - PARTE. ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSI STANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. GROUND NO. 1. 3 . THIS GROUND RAISED BY THE ASSESSEE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 1,27,44,095/ - U/S. 69B MADE BY AO. 4 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING 4 . WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUND R AISED BY THE ASSESSEE IN PARA NO. 1 5.1 TO 15.3 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 15.1 THE IMPUGNED ADDITION HAS BEEN MADE AS THE AO HAS OBSERVED FROM THE ACCOUNTS OF THE PARTNERS M/S CHINMAY AGRICULTURE & HOUSING PVT. LTD. AND SHRI PRASADAM REALTORS PVT. LTD. THAT THE CLOSING BALANCES AS ON 31.03.2011 ARE RS. 18,34,296/ - AND RS. 1,04,13,691.20 RESPECTIVELY. THUS TOTAL CLOSING CAPITAL BALANCE WORKS OUT TO RS.1,22,47,987.20. ON THE OTHER HAND AS PER THE APPELLANT'S FOIM 3CD, THE CAPITAL BALANC E AS ON 31 03.2011 WAS SHOWN AS RS.2,49,92,082/ - WHICH IS ALSO TAKEN AS THE OPENING CAPITAL BALANCE AS ON THE FIRST DAY OF THE FINANCIAL YEAR RELEVANT TO A.Y. 2012 - 13. THUS THERE IS A DIFFERENCE OF RS.1,27,44,095/ - . WHEN THE AO ASKED THE APPELLANT TO SUBST ANTIATE THE DETAILS WITH THE RECONCILIATION STATEMENT, REVISED/CORRECTED COPIES OF ACCOUNTS OF THE APPELLANT FIRM AND OF THE PARTNER COMPANIES ARE FILED 5 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING DURING ASSESSMENT PROCEEDINGS WHEREBY SIMPLY ALTERATION IN THE FIGURES OF THE CLOSING BALANCES AS ON 31 .03.2011 AND OPENING BALANCES AS ON 01.04.2011 IN THE ACCOUNTS OF THE ASSESSEE FIRM AS ALSO IN THE ACCOUNTS OF THE PARTNER COMPANY ARE MADE, WITHOUT SUBMITTING ANY RECONCILIATION WITH OTHER CONSEQUENTIAL FINANCIAL RESULTS/FIGURES. THE AO HAS OBSERVED THAT THE APPELLANT HAS NOT MADE ANY COMMENT ON THE FACT THAT THE ACCOUNTS OF THE ASSESSEE FIRM AND THE PARTNER COMPANIES HAD BEEN SUBJECTED TO AUDIT IN THE PRECEDING YEAR AS ALSO IN THE CURRENT YEAR. ACCORDING TO THE AO, WITHOUT ANY REASONABLE EXPLANATION, THE ASSESSEE CANNOT CHANGE THE FIGURES OF ACCOUNTS WITHOUT RECONCILING THE DIFFERENCES POINTED TO HIM. 15.2 BEFORE THE UNDERSIGNED THROUGH WRITTEN SUBMISSION, THE LD. AR HAS REITERATED THE SAME FACTS AS PRESENTED BEFORE THE AO. NOTHING NEW HAS BEEN ADDED. IT IS ACCEPTED THAT THE AMOUNT OF RS 2,40,92,082 WAS WRONGLY SHOWN IN PART B OF THE ANNEXURE I TO THE AUDIT REPORT OF THE APPELLANT FIRM. IT IS ALSO CLAIMED THAT THE APPELLANT HAS REVISED AND PREPARED NEW ANNUXRE I (FORMING PART OF FORM 3CD AUDIT REPORT) WHER EIN IN PART A, CORRECT CAPITAL BALANCES OF RS 1,22,47,987 IS REFLECTED. HOWEVER, I FAIL TO UNDERSTAND AS TO HOW THE FIGURES OF PAST YEAR CLOSING BALANCE AND THE INSTANT YEAR OPENING BALANCE IN THE CAPITAL ACCOUNT OF THE 6 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING APPELLANT FIRM CAN BE RECTIFIED WITH OUT ALTERING THE OTHER FIGURES OF THE BALANCE SHEETS OF A Y 2011 - 12 AND A.Y. 2012 - 13. IF THE BALANCE SHEET OF THE TWO YEARS ARE AUDITED AND BASED ON THE SUPPORTING BILLS, VOUCHERS, BANK STATEMENTS AND OTHER FINANCIAL DETAILS, THE CAPITAL BALANCES OF THE T WO YEARS CANNOT BE CHANGED IN ISOLATION. NO RECONCILIATION STATEMENT OR JUSTIFIABLE REASON HAS BEEN PRESENTED BEFORE THE UNDERSIGNED FOR CHANGES OR OTHERWISE OF THE ALTERATION IN FIGURES OF THE BALANCE SHEET. 15.3 CONSIDERING THE TOTALITY OF THE FACTS A ND CIRCUMSTANCES OF THE ISSUE INVOLVED, IN MY CONSIDERED OPINION, THE APPELLANT HAS FAILED TO RECONCILE THE DEFECTS POINTED OUT BY THE AO IN AN UNSATISFACTORY MANNER AS WELL AS FAILED TO PROPERLY RESOLVE OTHER AFFECTED FIGURES OF THE BALANCE SHEET OF THE Y EAR UNDER CONSIDERATION. HENCE, THE ADDITION OF RS. 1,27,44,095/ - IS CONFIRMED. THUS GROUND OF APPEAL NO. 6 IS DISMISSED. 5 . AFTER HAVING GONE THROUGH THE ORDERS PASSED BY REVENUE AUTHORITIES AND CONSIDERING THE FACTS AS DISCUSSED ABOVE, WE FIND THAT THE ASSESSEE HAD FAILED TO RECONCILE THE DEFECTS AND ALSO 7 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING FAILED TO PROPERLY RESOLVE OTHER EFFECTED FIGURES OF THE BALANCE SHEET OF THE YEAR. MOREOVER , N O NEW FACTS O R CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD. CIT(A). THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS SO RECORDED BY THE LD.CIT(A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THIS GROUND RAISED BY THE ASSESSEE STANDS DISMISSED . GROUND NO. 2. 6 . THE SOLITARY GROUNDS RAISED BY THE ASSESSEE RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN MAKING A FRESH DISALLOWA NCE OF EXPENDITURE OF RS. 3,39,000/ - U/S. 40(A)(IA). 7 . WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. 8 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUND RAISED BY THE A SSESSEE IN PARA NO. 9.4 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 9.4 THE AO HAS ALSO OBSERVED THAT THE APPELLANT HAS DEDUCTED TAX @ 1% ON PAYMENT OF RS.16,50,000/ - MADE TO M/S. REVITT ENGINEERING WHILE BALANCE IS CLAIMED AS PURCHASE OF SAND, WHICH WAS COVERED BY SALE OF GOODS ACT. SINCE THERE WAS NO EXPLANATION IN THIS RESPECT THE AO TRE ATED THE APPELLANT AS ASSESSEE HELD TO BE IN DEFAULT U/S.194C, AND DISALLOWED PROPORTIONATE @ 1.25% OF RS.16,50,000/ - I.E., RS.9,16,667/ - U/S.40(A)(IA) OF THE ACT. DURING REMAND PROCEEDINGS, AFTER VERIFICATION, THE /AO HAS REPORTED THAT THE ARGUMENT OF THE APPELLANT FOR NOT DEDUCTING TAX ON RS. 3,39,000/ BY STATING THAT THE SAME IS FOR PURCHASE OF SAND CANNOT BE ACCEPTED AS THE REVITT ENGINEERING IS NOT DEALERS IN SAND AND THE BILL IS RAISED FOR THE RCC WORK AND SAND IS NOT THE ONLY MATERIAL USED FOR THIS W ORK. IN THE REJOINDER, I FIND THAT THE LD. AR COULD NOT EXPLAIN AS TO HOW I DS WILL NOT BE DEDUCTED ON RS. 3,39,000/ - WHEN M/S. REVITT ENGINEERING IS NOT A DEALER OF SAND AND THE BILL WAS ALSO RAISED FOR THE RCC WORK. CONSIDERING THE TOTALITY 01 THE FILET S AND CIRCUMSTANCES, THE DISALLOWANCE TO THE 9 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING EXTENT OF RS. 3,39,000/ IS CONFIRMED. THE APPELLANT GETS RELIEF OF THE BALANCE AMOUNT. THUS GROUND OF APPEAL NO 4 IS PARTLY ALLOWED. 8 . AFTER HAVING GONE THROUGH THE ORDERS PASSED BY REVENUE AUTHORITIES AND CON SIDERING THE FACTS AS DISCUSSED ABOVE, WE FIND THAT BEFORE THE REVENUE AUTHORITIES, THE ASSESSEE COULD NOT LEAD ANY SUBSTANTIVE EVIDENCE TO PROVE AS TO HOW TDS WILL NOT BE DEDUCTED ON RS. 3,39,000/ - WHEN THE BILL WAS RAISED BY M/S REVITT ENGINEERING FOR TH E RCC WORK. MOREOVER , N O NEW FACTS O R CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD. CIT(A). THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS SO RECORDED BY THE LD.CIT(A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THIS GROUND RAISED BY THE ASSESSEE STANDS DISMISSED . 1 0 I.T.A. NO. 6253 /MUM/201 7 CHINMAY AGRICULTURAL HOUSING 9 . IN THE NET RESULT , THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH FEB , 2019. SD/ - SD/ - ( N. K. PRADHAN ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 18 . 02 .201 9 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI