VINAYAK MULTIMODAL TRANSPORT PVT LTD., MUMBAI V. A.C.I.T.-10(3), MUMBAI

ITA 6726/MUM/2011

• Counselvise Citation: 672619914 RSA 2011
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 02-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI PRAKASH
• Assessee Lawyers: SANJAY PARIKH
• Keywords: Unexplained cash credit; Business income; Depreciation; Additional evidence; Reasonable cause
• Section: 68; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUD ICIAL MEMBER . / ITA NO. 6726/MUM./2011 ( / ASSESSMENT YEAR : 20 08 09 ) VINAYAK MULTIMODAL TRANSPORT PVT. LTD. BIRYA HOUSE, 265 BAZAR GATE STREET FORT, MUMBAI 400 001 .. / APPELLANT V/S ASSTT . COMMISSIONER OF INCOME TAX CIRCLE 10(3), MUMBAI .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AABCV8114G / ASSESSEE BY : MR. SANJAY PARIKH / REVENUE BY : MR. RAV I PRAKASH / DATE OF HEARING 02.12.2013 / DATE OF ORDER 06.12.2013 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, CHALLENGING THE IMPUGNED ORDER 22 ND JULY 2011 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) XX II, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER VINAYAK MULTIMODAL TRANSPORT PVT. LTD. 2 SECTION 143(3)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 20 08 09 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI OUGHT TO HAVE GIVEN ONE MORE OPPORTUNITY TO PRODUCE THE DETAILS, DOCUMENTS FOR SCRUTINY ASSESSMENT. 2 . ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI ERRED IN UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER AMOUNTING TO RS. 11,64,511/ - ON DEPRECIATION. THE APPELLANT PRAYS THAT DISALLOWANCE M ADE IN RES PECT OF DEPRECIATION BE DELETED. 3 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI ERRED IN UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER AMOUNTING TO RS. 60,25,114/ - TOWARDS INTEREST EXPENDITURE. 4 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI ERRED IN UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER AMOUNTING TO RS 18,99,937/ - TOWARDS REPAIRS EXPENSES, SUR VEY CHARGES & SITE EXPENSES. 5 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI ERRED IN UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER AMOUNTING TO RS. 18,99,937/ - TOWARDS REPAIRS EXPENS ES, SURVEY CHARGES & SITE EXPENSES U/S 40(A)(IA) . 6 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI ERRED IN UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER AMOUNTING TO RS. 24,08,709/ - A S UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX 1961. 7 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI ERRED IN UPHOLDING THE ADDITION MADE BY ASSESSING OFFICER AMOUNTING TO RS. 18,55 2/ - AS INTEREST INCOME INSTEAD OF BUSINESS INCOME. 8. THE APPELLANT PRAYS THAT DISALLOWANCE MADE IN RESPECT OF ABOVE BE DELETED . 2 . IN ADDITION TO THE AFORESAID GROUNDS OF APPEAL, THE ASSESSEE HAS ALSO FILED PETITION FOR ADMISSION OF ADDITIONAL GROUND VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED: VINAYAK MULTIMODAL TRANSPORT PVT. LTD. 3 NOT ADMITTING THE ADDITIONAL EVIDENCES FILED 1 . THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN HOLDING THAT THERE WAS NO REASONABLE CAUSE TO ADMIT THE ADDITIONAL EVIDENCES AT THE APPELLATE STAGE. 2 . THE APPELLANT PRAYS THAT YOUR HONOURS HOLD THAT THERE WAS A REASONABL E AND SUFFICIENT CAUSE ON ACCOUNT OF WHICH THE APPELLANT COULD NOT FURNISH THE RELE VA N T DETAILS AND EVIDENCES BEFORE THE ASSESSING OFFICER AND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO ADMIT THE ADDITIONAL EVIDENCES, CALLED FOR A REMAND REPORT AND DECIDED THE APPEAL AS PER LAW. 3 . AT THE OUTSET, THE LEARNED COUNSEL SUBMITTED THAT IN THE PRESENT CASE, THE LEARNED COMMISSIONER (APPEALS) HAS REFUSED TO ADMIT THE ADDITIONAL EVIDENCES , WHICH WERE FILED BEFORE HIM THAT GOES TO THE VERY ROOT OF THE ISSUE S INVOLVED. HE HAS REJECTED THE SAID ADMISSION OF ADDITIONAL EVIDENCES ON THE GROUNDS THAT THERE IS NO REASONABLE CAUSE FOR NOT PRODUCING BEFORE THE ASSESSING OFFICER AND HAS ME RELY CONFIRMED THE FINDINGS OF THE ASSESSING OFFICER. THE REASON FOR NON PRODUCTION OF ALL THE EVIDENCE BEFORE THE ASSESSING OFFICER, WHICH HAS BEEN STATED BEFORE THE LEARNED COMMISSIONER (APPEALS) W AS THAT THE ASSESSEE COMPANY WAS INCURRING HEAVY LOSSES F ROM YEAR TO YEAR AND IT HAD BECOME VERY DIFFICULT TO CARRY ON THE BUSINESS OF THE COMPANY AND DURING THE YEAR, IT WAS NOT COMMERCIALLY OPERATING THE BUSINESS. DUE TO LACK OF FUNDS, THE ENTIRE OPERATIONS OF THE OFFICE WAS CLOSED AND THERE WAS FREQUENT CHANG E / SHIFING OF THE OFFICE PREMISE, WHICH MOST OF THE TIME RESULTED THAT NOTICES SENT BY THE ASSESSING OFFICER COULD NOT BE RECEIVED . THIS FACT WAS DULY MENTIONED BEFORE THE LEARNED COMMISSIONER (APPEALS) IN THE ANNEXURE FILED ALONG WITH THE MEMO OF APPEAL . THE VOLUMINOUS DETAILS GIVEN IN THE PAPER BOOK HAVE NOT BEEN CONSIDERED AT ALL WHICH GOES TO SHOW THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE NOT CORRECT. HE THUS REQUESTED THAT IN THE INTEREST OF JUSTICE THE ENTIRE MATTER SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER SO THAT ALL THESE VINAYAK MULTIMODAL TRANSPORT PVT. LTD. 4 DOCUMENTS CAN BE EXAMINED AND VER IFIED BY THE ASSESSING OFFICER AND THEN COMPUTE THE ASSESSEES CORRECT INCOME. 4 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE FINDING S OF THE LEARNED COMMISSIONER (APPEALS) AND SUBMITTED THAT THE LEARNED COMMISSIONER (APPEALS) HAS CLEARLY HELD THAT THERE WAS NO REASONABLE CAUSE TO ADMIT THE ADDITIONAL EVIDENCE. THUS, THE FINDINGS OF THE ASSESSING OFFICER HAS TO BE SUSTAINED AS THE ASSES SEE HAS LOST VARIOUS OPPORTUNITIES GIVEN BY THE A .O. AT THE ASSESSMENT STAGE. 5 . WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS COMPLETED THE ASSESSME NT AT AN INCOME OF ` 47,54,663, AS AGAINST RETURNED LOSS OF ( ) ` 34,84,478. THE ASSESSING OFFICER, IN PARA 2 OF THE ASSESSMENT ORDER, HAS MENTIONED THAT VARIOUS NOTICES HAVE BEEN ISSUED TO THE ASSESSEE , WHICH HAS NOT BEEN RESPONDED BY THE ASSESSEE. ACCORD INGLY, HE HAS COMPLETED THE ASSESSMENT , B ASED ON WHATEVER DETAILS , WHICH COULD BE FURNISHED AT THE TIME OF THE ASSESSMENT BY THE ASSESSEE. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE HAS PRODUCED VOLUMINOUS EVIDENCES / DOCUMENTS AND HAS ALSO GI VEN THE REASONS FOR NON FURNISHING OF THESE DOCUMENTS / EVIDENCES WHICH WAS MAINLY DUE TO THE FACT THAT THE ASSESSEE COMPANY WAS RUNNING INTO HEAVY LOSSES AND WAS NOT IN THE COMMERCIAL OPERATION. BEFORE US, IT HAS BEEN SUBMITTED THAT DUE TO NON PAYMENT OF RENT, THE OFFICE OF THE ASSESSEE WAS VACATED AND WAS SHIFTED TO DIFFERENT PLACES AND, THEREFORE, EITHER THE NOTICES COULD NOT BE SERVED OR NO COMPLIANCE COULD BE MADE IN TIME. FROM THE REASONS GIVEN BEFORE US AND ALSO BEFORE THE LEARNED COMMISSIONER (APPEA LS), WE ARE OF THE OPINION THAT PRIMA FACIE THESE EVIDENCES OUGHT TO HAVE BEEN CONSIDERED BY THE LEARNED COMMISSIONER (APPEALS) IN THE INTEREST OF SUBSTANTIAL JUSTICE , AS A VERY HIGH PITCH ASSESSMENT HAS BEEN MADE AND THESE EVIDENCES GOES TO THE VERY ROOT OF THE VARIOUS ISSUES INVOLVED. THE POWER OF THE LEARNED COMMISSIONER VINAYAK MULTIMODAL TRANSPORT PVT. LTD. 5 (APPEALS) IS CO TERMINUS WITH THAT OF THE ASSESSING OFFICER AND DURING THE APPELLATE PROCEEDINGS, THE LEARNED COMMISSIONER (APPEALS) CAN NOT ONLY ENTERTAIN VARIOUS EVIDENCES BUT ALSO CAN ALSO CARRY OUT NECESSARY ENQUIRY THROUGH THE ASSESSING OFFICER AFTER CALLING FOR THE REMAND REPORT. LOOKING TO THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE ARE OF THE CONSIDERED OPINION THAT THE EN TIRE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE CASE OF THE ASSESSEE AFRESH . CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND SET ASIDE THE ENTIRE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO EXAMINE ALL THE RELEVANT RECORDS AND EVIDENCES AS HAS BEEN FURNISHED BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS) AND ALSO TO CARRY OUT ANY SUCH ENQUIRY AS HE MAY DEEM FIT UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE AND AFTER PROVIDING DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE WILL ALSO COOPERATE WITH THE ASSESSING OFFICER TO FINALISE THE ASSESSMENT AND WILL ENSURE THAT PROPER ADDRESS IS GIVEN FOR THE COMMUNICATION. THUS, THE GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6 . 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6 TH DECEMBER 2013 ORDER PRONOUNCED IN THE OPEN COURT O N 6 TH DECEMBER 2013 SD/ - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 6 TH DECEMBER 2013 VINAYAK MULTIMODAL TRANSPORT PVT. LTD. 6 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI