BHAVNA L AIDASANI, VADODARA V. ITRO 25(1)(4), MUMBAI

ITA 6449/MUM/2014

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 4704 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MARRAPU NAVEEN
• Keywords: Reasonable cause; Set aside
• Section: 43B; 40(a)(ia); 133(6); 271E; 201; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 6449 /MUM/20 1 4 (ASSESSMENT YEAR 20 0 7 - 0 8 ) I.T.A. NO. 6450/MUM/2014 (ASSESSMENT YEAR 2007 - 08) BHAVNA L. AIDASANI C/O. MANOHA R MULCHANDANI 11/A, MANGAL JYOT CHS LTD. KAELI BANG, VARODARA PIN - 390018. PAN : AENPA2832H VS. ITO 25(1)(4) BANDRA KURALA COMPLEX MUMBA - 50. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI MARRAPU NAVEEN DATE OF HEARING 1 5 . 1 1 . 201 8 DATE OF PRONOUNCEMENT 30 . 1 1 . 201 8 O R D E R PER B.R. BASKARAN (AM) : - BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A) - 35, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEAR 2007 - 08. THE APPEAL NUMBERED A S ITA 6450/M/2014 RELATES TO QUANTUM ASSESSMENT PROCEEDINGS AND THE OTHER APPEAL RELATES TO PENALTY LEVIED U/S 271E OF THE ACT. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN THOUGH THE NOTICE OF HEARING WAS SENT BY REGISTERED POST ON MORE THAN ONE OCCASION. HENCE WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3. WE SHALL FIRST TAKE UP THE APPEAL FILED IN QUANTUM ASSESSMENT PROCEEDINGS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN FERROUS AND NON - F ERROUS METALS, OLD MACHINERY SCRAPS. HE IS ALSO ENGAGED IN HIRING OF JCB MACHINERY, TRADING IN SPARE PARTS AND ALLIED ITEMS. BHAVNA L. AIDASANI 2 4. THE FIRST ADDITION RELATES TO THE ADDITION OF RS.7,44,129/ - MADE U/S 68 OF THE ACT. THE ASSESSEE HAS TAKEN ADVANCE OF RS .7,44,129/ - FROM M/S JAY BHOLE MOTORS. SINCE THE ASSESSEE DID NOT FURNISH CONFIRMATION LETTER, THE AO ADDED THE SAME U/S 68 OF THE ACT. BEFORE LD CIT(A), THE ASSESSEE SUBMITTED ACCOUNT STATEMENT ALONG WITH PAN NUMBER OF M/S JAY BHOLE MOTORS. HENCE, DURI NG THE COURSE OF REMAND PROCEEDINGS, THE AO COLLECTED DETAILS FROM THE ABOVE SAID CONCERN BY ISSUING NOTICE U/S 133(6) OF THE ACT. THE LEDGER ACCOUNT SUBMITTED BY THE ABOVE SAID CONCERN WAS CONTRADICTORY TO THE CLAIM MADE BY THE ASSESSEE. HENCE THE LD CI T(A) ALSO CONFIRMED THE ADDITION MADE U/S 68 OF THE ACT. 5. FROM THE SUBMISSIONS GIVEN BY THE ASSESSEE AGAINST REMAND REPORT, WE NOTICE THAT THE ASSESSEE HAS SUBMITTED THAT THE AO HAS OBTAINED CONFIRMATION LETTER FROM ANOTHER CONCERN, VIZ., M/S NEW KEN WOOD CENTRE, WHERE AS THE ASSESSEE HAS TAKEN ADVANCE FROM M/S JAY BHOLE MOTORS. WE NOTICE THAT THE LD CIT(A) DID NOT EXAMINE THIS ASPECT. ACCORDINGLY WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF AO FOR EXAMINING THIS ISSUE AFRESH. 6. THE NEXT ISSUE RELATES TO THE DISALLOWANCE OF INTEREST EXPENDITURE U/S 40(A)(IA) OF THE ACT FOR NON - DEDUCTION OF TAX AT SOURCE . THE SUBMISSION OF THE ASSESSEE WAS THAT THE INTEREST WAS PAID BY HIM ON VARIOUS LOANS TAKEN FROM BANKS AND CREDIT CO - OP SOCIETY. ACCORDINGLY IT WAS SUBMITTED THAT THERE WAS NO REQUIREMENT OF DEDUCTING TAX AT SOURCE FROM SUCH PAYMENTS. SINCE THE ASSESSE E DID NOT PROVE THAT THE LOANS WERE TAKEN FROM BANKS ONLY, THE AO DISALLOWED THE INTEREST U/S 40(A)(IA) OF THE ACT AND THE LD CIT(A) ALSO CONFIRMED THE SAME. 7. WE NOTICE THAT THE TAX AUTHORITIES HAVE REJECTED THE SUBMISSION OF THE ASSESSEE WITHOUT EX AMINING THE BOOKS OF ACCOUNTS OF THE ASSESSEE, WHICH WILL THROW LIGHT ON THE VERACITY OF EXPLANATIONS OF ASSESSEE. HENCE WE ARE OF THE BHAVNA L. AIDASANI 3 VIEW THAT THIS ISSUE ALSO REQUIRES EXAMINATION. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE A ND RESTORE THE SAME TO THE FILE OF AO FOR EXAMINING IT AFRESH. 8. THE NEXT ISSUE RELATES TO THE ADDITION PERTAINING TO SUPPRESSION OF SALES. THE AO MADE ADDITION OF RS.526.94 LAKHS ON THE BASIS OF MOU EXECUTED BY THE ASSESSEE WITH A COMPANY. IN THE R EMAND PROCEEDINGS, THE AO REPORTED THAT THE SUPPRESSION ACTUALLY WORKS OUT TO RS.137.11 LAKHS. HOWEVER, THE LD CIT(A) PROCEEDED TO SUSTAIN THE ADDITION TO THE EXTENT OF RS.526.94 LAKHS. 9. BE THAT AS IT MAY, THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE MOU ENTERED BETWEEN THE ASSESSEE AND THE COMPANY HAS NOT BEEN FULLY EXECUTED. WE NOTICE THAT THE AO HAS MADE THE IMPUGNED ADDITION BY FULLY RELYING UPON THE MOU ONLY. IN OUR VIEW, THE SUBMISSION OF THE ASSESSEE COULD HAVE BEEN CROSS VERIFIED WITH AN Y OTHER MATERIAL BEFORE REJECTING THE SAME. ACCORDINGLY WE ARE OF THE VIEW THAT THIS ISSUE ALSO REQUIRES EXAMINATION AFRESH AT THE END OF AO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF AO FOR EXAMINING THIS ISSUE AFRESH. 10. THE NEXT ISSUE RELATES TO DISALLOWANCE OF SALES TAX AMOUNT U/S 43B OF THE ACT. EVEN THOUGH THE ASSESSEE CLAIMED THAT THE SALES TAX AMOUNT HAS BEEN PAID BY HIM BEFORE THE DUE DATE FOR FILING RETURN OF INCOME, YET HE C OULD NOT PRODUCE ANY EVIDENCE TO SUPPORT THE SAID CLAIM. HENCE THE LD CIT(A) CONFIRMED THE ADDITION MADE U/S 43B OF THE ACT. WE NOTICE THAT THE ASSESSEE HAS SUBMITTED THAT THE PAYMENT OF SALES TAX HAS BEEN NOTED BY THE TAX AUDITOR IN THE TAX AUDIT REPORT , MEANING THEREBY, THE TAX AUDITOR HAS VERIFIED THE DETAILS OF PAYMENT. HENCE WE ARE OF THE VIEW THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO PROVE THE FACT OF PAYMENT OF SALES TAX. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO FOR EXAMINING IT AFRESH. 11. WE SHALL NOW TAKE UP THE PENALTY APPEAL. IT WAS NOTICED THAT THE ASSESSEE HAS REPAID LOANS TO THE TUNE OF RS.17.67 LAKHS BY WAY OF CASH IN BHAVNA L. AIDASANI 4 VIOLATION OF THE PROVISIONS OF SEC .269T OF THE ACT. SINCE THE ASSESSEE DID NOT OFFER ANY EXPLANATION, THE ADDL CIT LEVIED PENALTY OF RS.17.67 LAKHS U/S 271E OF THE ACT. BEFORE LD CIT(A), THE ASSESSEE SUBMITTED THAT THE LOANS HAVE BEEN REPAID ON SUNDAYS. THE SAME WAS NOT CONVINCING TO LD CIT(A) AND HENCE HE CONFIRMED THE PENALTY. 12. WE HEARD LD D.R AND PERUSED THE RECORD. IN OUR VIEW ALSO, THE PAYMENT MADE ON SUNDAYS MAY NOT BE A REASONABLE CAUSE WITHIN THE MEANING OF SEC.273B OF THE ACT. IN THE ABSENCE OF ANY REASONABLE CAUSE, WHI CH COMPELLED THE ASSESSEE TO MAKE REPAYMENT OF LOAN BY WAY OF CASH, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN CONFIRMING THE PENALTY. 13. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.6450/MUM/2014 IS TREATED AS ALLOWED FOR STATISTICAL P URPOSES AND THE APPEAL OF THE ASSESSEE IN ITA NO.6449/MUM/2014 IS DISMISSED. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 30 . 1 1 .201 8 . SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 30 / 1 1 / 20 1 8 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// ( SENIOR PRI VATE SECRETARY ) PS ITAT, MUMBAI