PRAMAASK CONGLOBE PVT. LTD., MUMBAI V. ITO - 13(1)(4), MUMBAI

ITA 6521/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5836 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 07-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM C NINGSHEN
• Assessee Lawyers: RAJESH R SHAH
• Keywords: Principle of natural justice
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 6521 /MUM/ 2016 (ASSESSMENT YEAR 20 12 - 13 ) PRAMAASK CONGLOBE PVT. LTD. B WING, ROOM NO. 16 GRACE PLAZA, S.V. ROAD JOGESHWARI (WEST) MUMB AI - 400 102 PAN : AAGCM2825A V S . ITO WARD 13(1)(4) MUMBAI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI RAJESH R . SHAH DEPARTMENT BY SHRI OM C. NINGSHEN DATE OF HEARING 1 7 . 7 . 201 8 DATE OF PRONOUNCEMENT 17 . 7 . 201 8 O R D E R PER B.R. BASKA RAN (AM) : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25.8.2016 PASSED BY THE LEARNED CIT(A) - 21, MUMBAI AND IT RELATES TO A.Y. 2012 - 13. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDERED BY THE LEARNED CIT(A) ON FOLLOWING ISSUES : - (A) ADDITION MADE U/S. 68 OF THE ACT ` 11 LAKHS (B) DISALLOWANCE OF FREIGHT EXPENSES ` 22.50 LAKHS (C) DISALLOWANCE OF OTHER EXPENSES ` 1.28 LAKHS (D) ADDITION OF CASH DEPOSITED INTO BANK ACCOUNT ` 34.39 LAKHS 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT AND EXPORT OF IRON ORES. IT FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME OF ` 20.01 LAKHS. SINCE THE ASSESSEE DID NOT RESPOND TO THE NOTICES ISSUED BY THE ASSESSING OFFICER, THE AO COMPLETED THE ASSESSMENT TO THE BEST OF HIS JUDGMENT BY MAKING VARIOUS ADDITIONS. IN THE APPELLATE PROCEEDINGS, THE PRAMAASK CONGLOBE PVT. LTD. 2 LEARNED CIT(A) ALLOWED THE APPEAL IN PART. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 3. FIR ST ISSUE RELATES TO ADDITION MADE U/S. 68 OF THE ACT. THE ASSESSING OFFICER ASSESSED UNSECURED LOAN OF ` 73.33 LAKHS U/S. 68 OF THE ACT. THE LEARNED CIT(A) GRANTED THE RELIEF TO THE EXTENT OF ` 6 2 .33 LAKHS AND CONFIRMED ` 11 LAKHS ON THE REASONING THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF LOAN TAKEN BY IT. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD TAKEN LOAN OF ` 9 LAKHS FROM SHRI JAGDISH P. RAFAL AND LOAN OF ` 2 LAKHS FROM SHRI M. S. BHAVAN. THE ASSESSEE FURNISHED CONFIRMATION LETTER S O BTAINED FROM BOTH THESE CREDITORS AND HAS ALSO SHOWN THAT THESE LOANS WERE RECEIVED THROUGH BANKING CHANNEL. HE SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ACCEPTED THESE CONFIRMATION LETTERS AND DID NOT ASK FOR ANY OTHER MATERI AL AND HENCE THE ASSESSEE WAS OF THE VIEW THAT CONFIRMATION LETTER S FURNISHED BY IT WOULD SUFFICE REQUIREMENT OF THE ASSESSING OFFICER. H E SUBMITTED THAT THE LEARNED CIT(A) , ON THE CONTRARY, HAS CONFIRMED THE ADDITION WITHOUT CALLING FOR FURTHER DETAILS, WHICH THE ASSESSEE COULD HAVE PROVIDED IF CALLED FOR. ACCORDINGLY HE SUBMITTED THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF ` 11 LAKHS. H E SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO FURNISH REQUIRED DETAILS , IF AN OPPORTUN ITY IS GIVEN TO IT. 4. WE HAVE HEARD LEARNED DR AND PERUSED THE RECORD. ACCORDING TO LD A.R, THE ASSESSEE WAS UNDER THE IMPRESSION THAT THE CONFIRMATION LETTERS FILED WOULD SUFFICE THE REQUIREMENTS OF SEC. 68 OF THE ACT, THOUGH IT IS THE DUTY OF THE ASSESSEE TO PROVE THE THREE MAIN INGREDIENTS RELATING TO CASH CREDITS. SINCE THE ASSESSEE IS SEEKING ONE MORE OPPORTUNITY FOR THE REASONS QUOTED BY HIM, I N THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT ASSESSEE MAY BE PROVIDED WITH ONE MORE OPP ORTUNITY TO PROVE THE CASH CREDIT OF ` 11 LAKHS. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING IT AFRESH. PRAMAASK CONGLOBE PVT. LTD. 3 5. NEXT ISSUE RELATES TO DISALLOWANCE MADE O UT OF FREIGHT EXPENSES. THE ASSESSING OFFICER MADE ADHOC DISALLOWANCE OF 5% OF FREIGHT EXPENSES ON THE REASONING THAT THE ASSESSEE DID NOT FURNISH EVIDENCE IN SUPPORT OF THE SAME. THE LEARNED CIT(A) ALSO CONFIRMED THE SAME. THE LEARNED AR SUBMITTED THAT TH E ASSESSEE HAS INCURRED HUGE EXPENSE S TOWARDS FREIGHT CHARGES AND SA MPLE VOUCHERS WERE PRODUCED BEFORE THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS. HE SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO FURNISH ALL THE REQUIRED EVIDENCES, BUT IT WAS NOT CALLED FOR BY AO DURING REMAND PROCEEDINGS. HE SUBMITTED THAT THESE FACTS WERE BROUGHT TO THE NOTICE OF LD CIT(A), BUT S TILL THE LEARNED CIT(A) HAS CONFIRMED THE ADDITION. HE SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO FURNISH ALL REQUI RED DETAILS, IF AN OPPORTUNITY IS GIVEN TO IT. 6 . WE HAVE HEARD LEARNED DR AND PERUSED THE RECORD. SINCE THE ASSESSEE IS SEEKING ONE MORE OPPORTUNITY TO FURNISH THE REQUIRED DETAILS, I N THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THE ASSE SSEE MAY BE PROVIDED WITH ONE MORE OPPORTUNITY TO PRODUCE ALL REQUIRED DETAILS. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING IT AFRESH. 7 . THE LD A .R DID NOT PRESS ADDITION RELATING TO DISALLOWANCE OF ` 1.28 LAKHS MADE OUT OF OTHER EXPENSES AND HENCE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE IS CONFIRMED. 8 . THE L AST ISSUE RELATES TO ADDITION OF CASH DEPOSITS OF ` 34.39 LAKHS MADE INTO BANK A CCOUNT. THE C ASE OF THE ASSESSEE IS THAT DEPOSITS HAVE BEEN MADE OUT OF CASH BALANCE AVAILABLE IN THE BOOKS OF ACCOUNT AND HENCE NO ADDITION IS CALLED FOR. HE SUBMITTED THAT THE TAX AUTHORITIES HAVE MADE THIS ADDITION WITHOUT REFERRING TO THE BOOKS OF ACC OUNT. 9 . WE HAVE HEARD LEARNED DR ON THIS ISSUE. WE FIND MERIT IN THE CONTENTION S OF THE ASSESSEE. IF CASH DEPOSITS HAVE BEEN MADE INTO THE BANK PRAMAASK CONGLOBE PVT. LTD. 4 ACCOUNT OUT OF CASH BALANCE AVAILABLE IN THE BOOKS OF ACCOUNT AND IF CASH DEPOSITS ARE DULY REFLECTED IN REGU LAR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE , THEN NO ADDITION IN THIS REGARD IS CALLED FOR. SINCE THIS ASPECT REQUIRES VERIFICATION, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OF FICER WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE , I F IT IS FOUND THAT THE CASH DEPOSITS HAVE BEEN MADE OUT OF CASH BALANCE AVAILABLE IN THE REGULAR BOOKS OF ACCOUNT , THEN NO ADDITION IS CALLED FOR. THE AO MAY ACCORDINGLY TAKE APPROPRIATE DEC ISION. 1 0 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 17 . 7 . 201 8 . SD/ - SD/ - (RAMLAL NEGI) (B.R.BASKARAN) J U DICIAL MEMBER ACCOUNTANT M EMBER MUMBAI ; DATED : 17 /7 / 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 P RIVATE S ECRETARY ) PS ITAT, MUMBAI