ASST CIT CIR 19(2), MUMBAI V. JAMIL AHMED QURESHI, MUMBAI

ITA 6327/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83478 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 30-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 16-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Assessee Lawyers: REEPAL TRALSHAWALA
• Keywords: Business income; Additional evidence
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J B ENCH, MUMBAI ! , ' #$ % % % % , , #$ & BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUICIAL MEMBER ./ I.T.A. NO.6327/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR :2008-09 THE ACIT 19(2), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400 012 / VS. SHRI JAMIL AHMED QURESHI, KARIMAN ENTERPRISES, 102, EMERALD APARTMENTS, NEAR DADAR SAHKARI BANK, SANTACRUZ(E), MUMBAI-400 055 C.O. NO. 286/MUM/2013 (ARISING OUT OF I. T.A. NO.6327/MUM/2012) ( ' ' ' ' / ASSESSMENT YEAR :2008-09 SHRI JAMIL AHMED QURESHI, KARIMAN ENTERPRISES, 102, EMERALD APARTMENTS, NEAR DADAR SAHKARI BANK, SANTACRUZ(E), MUMBAI-400 055 / VS. THE ACIT 19(2), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400 012 $( ' ./ ) ./ PAN/GIR NO. : AABPQ 1063C ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / REVENUE BY: SHRI S.D. SRIVASTAVA +,(* . - / ASSESSEE BY: SHRI REEPAL TRALSHAWALA . /0' / DATE OF HEARING :31.07.2014 12' . /0' / DATE OF PRONOUNCEMENT :06 .08.2014 ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 2 #3 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-30 ,MUMBAI DT. 31.7.2012 PERTAINING TO A.Y.2008-09. AS THE APPEAL AND THE CROSS OBJECTIONS WERE HEARD TOGETHER, THEY ARE DISPOSED O F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO. 6327/M/2012-A.Y. 2008-09 2. THE GRIEVANCES OF THE REVENUE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE FO LLOWING ADDITIONS ADMITTING THE NEW EVIDENCES WHICH WERE NO T FILED DURING THE ASSESSMENT PROCEEDINGS WITHOUT APPRECIAT ING THAT HE HIMSELF HAS NOT GIVEN ANY FINDING THAT THE CONDI TIONS PRESCRIBED IN RULE 46A(1) OF I.T. RULES, 1962 HAVE BEEN FULFILLED BY THE APPELLANT TO JUSTIFY PRODUCTION OF EVIDENCES NOT FILED DURING THE ASSESSMENT PROCEEDINGS. (A) ADDITION OF RS. 3,64,508/- IN RESPECT OF PAYMENTS M ADE FROM CITY BANK CREDIT CARD. (B) ADDITION OF RS. 1,30,00,000/- AS UNEXPLAINED INVEST MENT U/S. 69B OF THE I.T. ACT. (C) ADDITION OF RS. 2,96,27,229/- AS UNDISCLOSED RECEIP TS. (D) RESTRICTING THE ADDITION TO RS. 119.90 LAKHS AS AGA INST OF RS. 1,20,18,240/- AND RS. 19,20,710/- IN RESPECT OF A.H. CONSTRUCTION & M/S. KARIMAN ENTERPRISES RESPECTIVEL Y ON ACCOUNT OF ESTIMATED NET PROFIT. ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 3 (E) ADDITION OF RS. 1,63,20,128/- ON ACCOUNT OF SUNDRY CREDITORS. 3. A PERUSAL OF THE AFOREMENTIONED GRIEVANCES SHOW THAT THE LD. CIT(A) HAS ADMITTED CERTAIN ADDITIONAL EVIDENCES WH ICH ARE IN VIOLATION OF THE CONDITIONS PRESCRIBED IN RULE 46A OF THE I.T . RULES . A PERUSAL OF THE PAPER BOOK AT PAGE-46 FILED BEFORE US SHOWS THA T ON 8 TH NOVEMBER, 2011, THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS B EFORE THE LD. CIT(A). NOVEMBER 8, 2011 THE COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI DEAR SIR, RE: MR. JAMIL AHMED QURESHI APPEAL NO. IT-216/10-11 ASST. YEAR: 2008-09 WE ARE INSTRUCTED BY OUR ABOVE NAMED CLIENT TO STAT E AS UNDER: DURING THE TIME THE SCRUTINY PROCEEDINGS WERE GOING ON FOR THE ASST. YEAR: 2008-09, OUR CLIENT WAS NOT KEEPING GOOD HEALTH. HE HAD SEVERE BACK PAIN AND WAS VIRTUALLY IMMOBILIZED FOR A PERIOD OF ABOUT ONE AND A HALF MO NTH ON STRICT DOCTORS ADVICE. MOREOVER, DURING SEPTEMBER- OCTOBER, 2008, A FAMILY DISPUTE INVOLVING OUR CLIENTS CLOSE RELATIVES WAS ALSO GOING ON WITH THE RESULT THAT OUR CLIENT W AS UNDER TERRIBLE MENTAL STRESS AND COULD NOT CONCENTRATE ON HIS NORMAL BUSINESS ACTIVITIES AS WELL THE ON GOING SCR UTINY PROCEEDINGS. OUR CLIENT HAD APPOINTED MR S F SHAH, B COM AS HIS AUTHORIZED REPRESENTATIVE TO ATTEND TO HIS SCRUTINY MATTER. OUR CLIENT USED TO PASS ON THE NOTICES RECEIVED FRO M THE ASSESSING OFFICER TO ATTEND AND WAS ALWAYS INFORMED BY HIM ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 4 THAT HE WAS ATTENDING TO THE MATTER AND THAT THE AS SESSMENT PROCEEDINGS WERE GOING ON SMOOTHLY IT WAS ONLY AFTE R THE ASSESSMENT ORDER WAS RECEIVED THAT OUR CLIENT CAME TO KNOW ABOUT THE HUGE ADDITIONS MADE TO THE TAXABLE INCOME AND THE HUGE DEMAND RAISED. OUR CLIENT HAS NOW COMPILED ALL THE DETAILS THAT WE RE REQUIRED TO HE SUBMITTED DURING THE ASSESSMENT PROC EEDINGS AND ARE READY FOR A DETAILED SCRUTINY BY THE ASSESS ING OFFICER IN VIEW OF THE ABOVE FACTS AND IN THE INTEREST OF J USTICE, WE REQUEST YOUR HONOUR TO KINDLY REMAND THE MATTER BAC K TO THE ASSESSING OFFICER FOR A DETAILED SCRUTINY AND OUR C LIENT ASSURES YOUR HONOUR THAT ALL THE REQUIRED DETAILS, DOCUMENTS ETC WILL BE PRODUCED BEFORE THE ASSESSING OFFICER. THANKING YOU. YOURS FAITHFULLY, SD/- CHARTERED ACCOUNTANTS 4. IN RESPONSE TO THE AFORESTATED SUBMISSION OF THE ASSESSEE, THE LD. CIT (A) WROTE A LETTER TO THE AO WHICH IS AT PAGE-4 7 OF THE PAPER BOOK CALLING FOR A REMAND REPORT. THIS LETTER IS DT. 16 .11.20111 AND READ AS UNDER: NO. CIT(A)-30/REMAND REPORT/2011-12 DT. 16.11.2011 THE AC 19(2), PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 SUB: APPELLATE PROCEEDINGS IN THE CASE OF MR. JAMIL AHMED QURESHI A.Y. 2008-09 PAN AABPQ1O63C ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 5 APPEAL NO. CIT(A)-30/ITO-19(2)(3)/IT-216/10-11 - RE G. PLEASE REFER TO THE ABOVE. 2. THE APPELLATE PROCEEDINGS IN THE AFORESAID CASE ARE GOING ON WITH THE UNDERSIGNED. IT IS SEEN FROM THE ASSESSMEN T ORDER THAT IN THIS CASE THE ASSESSMENT ORDER WAS PASSED U/S.144 O F THE L.T.ACT AND HUGE ADDITIONS TOTALING TO RS. 7,76,79,815/- HA VE BEEN MADE. DURING THE COURSE OF APPELLATE PROCEEDINGS, IT HAS BEEN SUBMITTED BY THE LEARNED AR THAT THE APPELLANT COULD NOT COMP LY TO THE NOTICES ISSUED BY THE AO BECAUSE OF HIS ILL-HEALTH AND ALSO THERE WAS A FAMILY DISPUTE INVOLVING THE APPELLANTS CLOS E RELATIVES. FURTHER, IT IS ALSO SUBMITTED THAT THE THEN REPRESE NTATIVE OF THE APPELLANT MR. S.E. SHAH DID NOT ATTEND PROPERLY BEF ORE THE AO WHICH, RESULTED IN PASSING THE EX-PARTE ORDER. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT HAS FILED VOLUMINOUS DETAILS WITH REFEREN CE TO THE ADDITIONS MADE IN THE ASSESSMENT ORDER. THESE DETAI LS/DOCUMENTS WERE NOT FURNISHED BEFORE THE AO DURING THE ASSESSM ENT PROCEEDINGS AND HENCE THEY CONSTITUTE ADDITIONAL EV IDENCE UNDER RULE 46A OF THE I.T. RULES. FURTHER I ALSO FIND FRO M THE ASSESSMENT ORDER THAT PROPER ENQUIRIES HAVE NOT BEEN CONDUCTED IN THIS CASE. THEREFORE, IN VIEW OF THE POWERS VESTED IN ME U/S. 250(4) OF THE I.T. ACT, I DIRECT THE AO TO CONDUCT FURTHER ENQUIRIES I N THIS CASE WITH REFERENCE TO THE ADDITIONAL EVIDENCE SUBMITTED BY T HE APPELLANT TO ENABLE THE UNDERSIGNED TO PASS A JUDICIOUS ORDER. Y OU MAY FEEL FREE TO CONDUCT ANY OTHER ENQUIRIES AS PER YOUR REQUIREM ENTS INCLUDING OUTSIDE ENQUIRIES. YOUR SELF CONTAINED REPORT ON TH E OUTCOME OF SUCH ENQUIRIES MAY BE SUBMITTED TO THE UNDERSIGNED WITHIN ONE MONTH FROM THE RECEIPT OF THIS LETTER. SD/- (ANIL KUMAR) COMMISSIONER OF INCOME-TAX(A)-30 ENCL: AS ABOVE MUMBAI 5. A PERUSAL OF THE AFORESTATED LETTER OF THE LD. C IT(A) CLEARLY SHOWS THAT HE HAS CONSIDERED THE REASONS FOR NON-SUBMISSI ON OF THE DOCUMENTS BEFORE THE AO. WE FURTHER FIND THAT THE LD. CIT(A) HAS CATEGORICALLY ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 6 RECORDED SATISFACTION FOR THE ADMISSION OF THE ADD ITIONAL EVIDENCES AND HAVE ADMITTED THE EVIDENCES IN VIEW OF THE POWERS V ESTED ON THE LD. CIT(A) U/S. 250(4) OF THE ACT AND AFTER ADMITTING T HE ADDITIONAL EVIDENCES, FOLLOWING THE PRINCIPLES OF NATURAL JUST ICE, THE LD. CIT(A) DIRECTED THE AO TO CONDUCT FURTHER ENQUIRIES WITH R EFERENCE TO THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. CO NSIDERING THESE CLINCHING EVIDENCES ON RECORD, WE DO NOT FIND ANY M ERIT IN THE GRIEVANCES OF THE REVENUE. IN OUR CONSIDERED VIEW, THE LD. CI T(A) HAS GIVEN FINDINGS BEFORE ADMITTING THE ADDITIONAL EVIDENCES . THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF T HE LD. CIT(A). APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. C.O. NO. 286/MUM/2013 6. THE ASSESSEE HAS RAISED 3 SUBSTANTIVE GROUNDS OF APPEAL. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATE D THAT HE IS NOT PRESSING GROUND NO. 2& 3. THEREFORE, GROUND NO. 2 & 3 ARE D ISMISSED AS NOT PRESSED. 7. THE ONLY SURVIVING GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 44.29 LAKH S MADE U/S. 68 OF THE ACT. 8. THE ASSESSEE IS IN THE BUSINESS OF BUILDING CONS TRUCTION AND MANPOWER RECRUITMENT. THE ASSESSEE IS THE PROPRI ETOR OF TWO CONCERNS NAMELY M/S. KARIMAN ENTERPRISES AND M/S. A.H. CONST RUCTION. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, ON PERUSAL OF THE AIR INFORMATION, THE AO ASKED THE ASSESSEE TO EXPLAIN T HE DEPOSIT OF CASH IN HIS BACK ACCOUNT TO THE TUNE OF RS. 44.29 LAKHS. T HE COPY OF AIR ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 7 INFORMATION WAS SUPPLIED TO THE ASSESSEE. ON RECEIV ING NO PLAUSIBLE REPLY FROM THE ASSESSEE, THE AO PROCEEDED BY INVOKING THE PROVISIONS OF SEC. 68 OF THE ACT AND TREATED THE ENTIRE DEPOSIT OF RS. 44.29 LAKHS AS UNEXPLAINED INCOME WITHIN THE MEANING OF SEC. 68 OF THE ACT. 9. BEFORE THE LD. CIT(A), IT WAS EXPLAINED THAT THE CASH DEPOSITS ARE OUT OF BUSINESS RECEIPTS OF THE ASSESSEE. COPIES OF BANK STATEMENT OF BOMBAY MERCANTILE BANK WAS FURNISHED ALONGWITH THE COPIES OF LEDGER ACCOUNT FROM THE BOOKS OF M/S. KARIMAN ENTERPRISES AND M/S. A.H. CONSTRUCTION. IT WAS FURTHER EXPLAINED THAT THE S AID DEPOSIT IS OUT OF INCOME FROM MANPOWER RECRUITMENT. THE LD. CIT(A) C ONSIDERED THE NATURE OF BUSINESS OF M/S. A.H. CONSTRUCTION AND HE LD THAT THE BUSINESS RECEIPTS FROM THE SALE OF FLATS ARE THROUGH CHEQUE PAYMENTS ONLY AND WENT ON TO CONFIRM THE DISALLOWANCE MADE BY THE AO U/S. 68 OF THE ACT. 10. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS GONE ON WRONG FACTS. IT IS THE SAY OF THE LD. COUN SEL THAT THE BUSINESS OF MANPOWER RECRUITMENT IS MAINLY ON CASH BASIS AND DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN RECEIPT OF FE ES AT RS. 64 LAKHS. THE LD. COUNSEL STATED THAT THE CASH DEPOSIT IN THE BAN K IS OUT OF THESE CASH RECEIPTS WHICH ARE DULY REFLECTED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE IN THE FIRM M/S. KARIMAN ENTERPRISES WHEREAS THE L D. CIT(A) HAS CONSIDERED THE ACCOUNTS OF M/S. A.H. CONSTRUCTION. 12. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 8 13. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW AND THE RELEVANT MATERIAL EVIDENCES BROUGHT ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A PROPRIETOR OF TWO CONCERNS NAMELY M/S. KARIMAN ENTERPRISES AND M/S. A.H. CONSTRUCTION. IT IS THE CLAIM OF THE LD. COUNSEL THAT CASH DEPOSITED IN THE BANK IS OUT OF T HE FEES RECEIVED FROM THE BUSINESS OF M/S. KARIMAN ENTERPRISES. A PERUSA L OF THE ORDER OF THE LD. CIT(A) SHOWS THAT WHILE DISMISSING THE APPEAL O F THE ASSESSEE, HE HAS CONSIDERED THE BUSINESS OF M/S. A.H. CONSTRUCTION. OBVIOUSLY, THE ORDER IS ERRONEOUS ON FACTS. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILE OF THE AO. THE AO IS DIRECT ED TO VERIFY THE DEPOSIT OF CASH IN THE BANK BY VERIFYING THE RESPECTIVE ENT RIES FROM THE BOOKS OF M/S. KARIMAN ENTERPRISES. THE ASSESSEE IS DIRECTED TO FILE NECESSARY DETAILS/DOCUMENTS BEFORE THE AO AND EXPLAIN THE DEP OSITS IN THE BANK ACCOUNT VIS--VIS ENTRIES IN THE CASH BOOK. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE C.O. FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH AUGUST, 2014 . #3 . 2' ' 4 5#6 6.8.2014 2 . 7 SD/- SD/- (VIVEK VARMA ) (N.K. BILLAIYA) #$ / JUDICIAL MEMBER ' #$ / ACCOUNTANT MEMBER MUMBAI; 5# DATED : 6 TH AUGUST, 2014 . . ./ RJ , SR. PS ITA NO. 6327/M/2012 C.O. NO. 286/M/2013 9 #3 #3 #3 #3 . .. . +/ +/ +/ +/ 8'/ 8'/ 8'/ 8'/ / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. :7 +/ , , / DR, ITAT, MUMBAI 6. 7; < / GUARD FILE. #3 #3 #3 #3 / BY ORDER, ,/ +/ //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI