LATESH M. DESAI (HUF), THANE V. ITO WD 4(2), THANE

ITA 6769/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92780 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) . . , , ./ I.T. A. NO. 6769 / MUM/20 13 ( / ASSESSMENT YEAR : 20 0 8 - 09 ) SHRI LATESH M DESAI HUF, G - 203, NEMINATH NAGAR, ACHOLE ROAD, NALLASOPARA (E), THANE / VS. INCOME TAX OFFICER, WARD 4(2), 6 TH FLOOR, A WING, ASHAR IT PAR K , ROAD NO.16 - Z, W A GLE IND. ESTATE, THANE (E) - 400604 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AABHL1278C / APPELLANT BY SHRI SATISH MODI / RSPONDENT BY SHRI ASGHAR ZAIN V P / DATE OF HEARING : 20 .4. 201 5 / DATE OF PRONOUNCEMENT : 3. . 6 . 201 5 / O R D E R PER B.R. BASKARAN (AM) THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 04 - 09 - 2013 PASSED BY LD CIT(A) - II, THANE AND IT RELATES TO THE ASSESSMENT YEAR 2008 - 09. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO U/S 41(1) OF THE ACT AND FURTHER ENHANCING THE SAME. THE ASSESSEE IS ALSO AGGRIEVED BY THE DECISION OF LD CIT(A) IN NOT GRANTING RELIEF IN RESPECT OF THE ADDITION RELATING TO PPF CONTRIBUTION. ITA 6769 / MUM/20 13 2 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS CARRYING ON BUSINESS IN FERROUS AND NON - FERROUS METALS. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE WAS SHOWING CREDIT BALANCE IN THE NAME OF M/S SYMPHONY METALAM PVT LTD. THE AO DEPUTED HIS INSPECTOR TO SERVICE NOTICE U/S 133(6) OF THE ACT TO THE ABOVE SAID CREDITOR, BUT THE INSPECTOR COUL D NOT LOCATE THE ADDRESS. HENCE THE AO ASSESSED THE BALANCE OF RS.7,94,364/ - OUTSTANDING IN THE NAME OF THE ABOVE SAID CREDITOR AS INCOME OF THE ASSESSEE U/S 41(1) OF THE ACT TREATING THE SAME AS CEASED LIABILITY. BEFORE LD CIT(A), THE ASSESSEE FILED A CONFIRMATION LETTER OBTAINED FROM THE ABOVE SAID PARTY AND HENCE THE LD CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. THE SAID CONFIRMATION LETTER DISCLOSED ANOTHER ADDRESS. IN THE REMAND PROCEEDINGS ALSO, THE AO NOTICED THAT THE ABOVE SAID CREDITOR DID NOT EXIST IN THE NEW ADDRESS ALSO. FURTHER THE AO NOTICED THAT THE NAME OF THE CREDITOR CITED ABOVE DID FIND PLACE IN THE LIST OF HAWALA ENTRY TRADERS ISSUED BY THE SALES TAX DEPARTMENT. THE LD CIT(A) NOTICED THAT THE ASSESSEE HAD MADE AGGREGATE PURCHA SES OF RS.15,28,637/ - FROM THE ABOVE SAID CREDITOR. HENCE THE LD CIT(A) ENHANCED THE ADDITION TO RS.15,28,637/ - . 3. BEFORE US THE LD A.R SUBMITTED THAT THE TAX AUTHORITIES HAVE ACCEPTED THE SALES MADE BY THE ASSESSEE, WHICH COULD NOT BE MADE WITHOUT EF FECTING CORRESPONDING PURCHASES. HOWEVER, FROM THE ORDER OF LD CIT(A), WE NOTICE THAT THE LD CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO FURNISH QUANTITY DETAILS. WE HAVE NOTICED THAT THE FACT THAT THE NAME OF M/S SYMPHONY METALAM PVT LTD FINDS PLACE IN THE LIST OF HAWALA ENTRY PROVIDERS, CAME TO LIGHT ONLY DURING THE COURSE OF REMAND PROCEEDINGS. HENCE, WE ARE OF THE VIEW THAT THE ASSESSEE DID NOT GET ENOUGH TO EXPLAIN ITS STAND WITH REGARD TO THE QUANTITY DETAILS. HENCE, WE ARE OF THE VIEW TH AT THE LD CIT(A) HAS TAKEN ADVERSE VIEW OF THE MATTER ITA 6769 / MUM/20 13 3 WITHOUT PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE OR DER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO FOR FRESH EXAMINATION. THE ASSESSEE IS FREE TO PROVE THE QUANTITY DETAILS AS WELL AS THE GENUINENESS OF PURCHASES AND OUTSTANDING BY FURNISHING NECESSARY EVIDENCES AND EXPLANATIONS. 4. THE NEXT ISSUE RELATES TO THE ADDITION OF INVESTMENT MADE IN PPF ACCOUNT ON THE REASONING THAT THE SAME DID NOT FIND PLACE IN THE CAPITAL ACCOUNT OF THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE IS THAT THE PPF ACCOUNT IS SEPARATELY MAINTAINED AS AN ITEM OF ASSET IN THE BALANCE SHEET AND THE CONTRIBUTION MADE WAS DULY REFLECTED THEREIN. HOWEVER, THE LD CIT(A) CONFIRMED THE ADDITION ON THE REASONING THAT THE ASSESSEE DID NOT FURNISH BALANCE SHEET. HOWEVER, WE NOTICE THAT THIS IS ALSO A MATTER REQUIR ING VERIFICATION ONLY. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO FOR FRESH EXAMINATION. 5. NEEDLESS TO MENTION, THE ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY OF BEING HEARD. 6. IN T HE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 3RD JUNE , 2015 SD SD ( / AMIT SHUKLA ) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 3RD JUNE ,2015 . ITA 6769 / MUM/20 13 4 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI