DIWAR R. SHARMA, MUMBAI V. ITO 9(3)(4), MUMBAI

ITA 6648/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62567 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 15-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Unexplained cash credit
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.6648/MUM/2010 (ASSESSMENT YEAR: 2006-07) SHRI DIWAKAR R. SHARMA, TRIPATHI NAGAR, RAHIVASHI COMMITTEE, NEAR MAHAKALI TEMPLE, MAHAKALI CAVES ROAD, MUMBAI ..... APPELLANT VS INCOME-TAX OFFICER -20(2)(1), MUMBAI .... RESPONDENT PAN : AHLPS 0493 F APPELLANT BY: S/SHRI K. GOPAL & JITENDRA SINGH RESPONDENT BY: SHRI C.G.K. NAIR DATE OF HEARING: 02.05.2012 DATE OF PRONOUNCEMENT: 15.06.2012 O R D E R PER P.M. JAGTAP, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT (A)-31, MUMBAI DATED 28.07.2010 PASSED EX PARTE . 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF INTERIOR DECORATING CONTRACTOR U NDER THE NAME AND STYLE OF M/S. NOVEL INTERIORS. THE RETURN OF INC OME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 30.10.2006 DECLAR ING TOTAL INCOME OF ` 3,75,840/-. THE SAID RETURN FILED BY THE ASSESSEE WAS SELECTED BY THE A.O. FOR SCRUTINY ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THERE WAS, HOWEVER, NO COMPLIANCE FROM THE ASSESSEES SIDE TO THE NOTICES ISSUED BY THE A.O. FIXING THE H EARINGS FROM TIME TO TIME. EVEN THE DETAILS REQUIRED BY THE A.O. FOR TH E PURPOSE OF ASSESSMENT WERE NOT FURNISHED BY THE ASSESSEE. THE A.O., THEREFORE, ITA NO.6648/MUM/2010 SHRI DIWAKAR R. SHARMA 2 HAD NO OPTION BUT TO COMPLETE THE ASSESSMENT U/S.14 4 TO THE BEST OF HIS JUDGMENT. IN THE ASSESSMENT COMPLETED VIDE AN ORDE R DATED 29.12.2008, THE A.O. MADE THE FOLLOWING ADDITIONS T O THE TOTAL INCOME OF THE ASSESSEE: AMT. IN ` `` ` DISALLOWANCE OF 15% OF THE EXPENSES CLAIMED UNDER VARIOUS HEADS 5,23,973 ADDITION ON ACCOUNT OF LOW WITHDRAWALS AND HOUSEHOL D EXPENSES 75,000 LOANS AND ADVANCES ADDED U/S.68 AS UNEXPLAINED CASH CREDIT 1,70,000 DISALLOWANCE OF ENTIRE LABOUR CHARGES U/S.40(A)(IA) 11,87,843 SUNDRY CREDITORS ADDED U/S.41(1) TREATING THE SAME AS CESSATION OF LIABILITY 16,254 DIFFERENCE IN CREDIT ENTRIES APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE 3,22,917 3. AGAINST THE ORDER PASSED BY THE A.O. U/S.144, AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT (A) CHALLENGING THE VALIDITY OF THE SAID ASSESSMENT AS WELL AS DISPUTING ALL THE ADDITIONS M ADE THEREIN. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT (A), AGAIN THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE TO TH E NOTICES ISSUED BY THE LD. CIT (A) FIXING THE HEARING FROM TIME TO TIM E AND HE KEPT SEEKING ADJOURNMENTS ON ONE PRETEXT OR THE OTHER. THE LD. CIT (A), THEREFORE, PROCEEDED TO DISPOSE OFF THE APPEAL OF THE ASSESSEE EX PARTE BY HIS APPELLATE ORDER DATED 28.07.2010 UPHOLDING THE VALI DITY OF THE ASSESSMENT MADE BY THE A.O. U/S.144 AS WELL AS CONF IRMING ALL THE ADDITIONS MADE THEREIN. ACCORDINGLY, THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LD. CIT (A) AND AGGRIEVED BY THE S AME, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS MADE AN ATTEMPT TO EXPLAIN THE NON-COM PLIANCE ON THE PART OF THE ASSESSEE DURING THE COURSE OF ASSESSMEN T PROCEEDINGS BEFORE THE A.O. AS WELL AS DURING THE COURSE OF THE APPELL ATE PROCEEDINGS BEFORE THE LD. CIT (A), IT IS OBSERVED THAT THERE IS NO EV IDENCE WHICH COULD BE PRODUCED BY HIM TO SUPPORT AND SUBSTANTIATE THE SAI D EXPLANATION. AT ITA NO.6648/MUM/2010 SHRI DIWAKAR R. SHARMA 3 THE SAME TIME, WE ARE ALSO OF THE VIEW THAT THE ASS ESSMENT MADE BY THE A.O. U/S.144 IS HIGH PITCHED ONE IN WHICH HE HAS AP PARENTLY MADE UNREASONABLE AND EXCESSIVE ADDITIONS. EVEN IF SEC. 144 EMPOWERS THE A.O. TO MAKE ASSESSMENT TO THE BEST OF HIS JUDGMENT , HE IS EXPECTED TO BE FAIR AND REASONABLE IN MAKING SUCH ASSESSMENT WH ICH IS REQUIRED TO BE MADE ON THE BASIS OF MATERIAL AVAILABLE ON RECOR D BEFORE HIM. IN THE PRESENT CASE, IT APPEARS THAT MANY OF THE DEBIT AND CREDIT AMOUNTS REFLECTED IN THE BALANCE-SHEET OF THE ASSESSEE WERE STRAIGHT WAY ADDED BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE AND EVEN THE ENTIRE LABOUR CHARGES WERE DISALLOWED U/S.40(A)(IA). CONS EQUENTLY, THE TOTAL INCOME OF THE ASSESSEE HAS BEEN ASSESSED BY THE A.O . AT A SUBSTANTIALLY HIGHER FIGURE OF ` 26,71,824/- AS AGAINST THE INCOME OF ` 3,75,840/- RETURNED BY THE ASSESSEE. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR MAKING THE FRESH ASSESSMENT SUBJECT TO IMPOSITION OF COST ON THE ASS ESSEE FOR NON- COMPLIANCE WHICH WE QUANTIFY AT ` 10,000/-. SUBJECT TO PAYMENT OF THE SAID COST BY THE ASSESSEE TO THE DEPARTMENT, THE MA TTER IS SET ASIDE TO THE A.O. WITH A DIRECTION TO MAKE THE ASSESSMENT AF RESH IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE ONE MORE OPPORTU NITY OF BEING HEARD. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 5TH JUNE 2012. SD/- ( AMIT SHUKLA ) JUDICIAL MEMBER SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER MUMBAI, DATE: 15TH JUNE 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) 31, MUMBAI. ITA NO.6648/MUM/2010 SHRI DIWAKAR R. SHARMA 4 4) THE CIT-20, MUMBAI. 5) THE D.R. D BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN