AIBANI ENTERPRISES, MUMBAI V. DCIT CIR 24(1), MUMBAI

ITA 723/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7001 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE
• Keywords: Unexplained cash credit; Additional evidence; Set aside
• Section: 143(3); 133(6); 37(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENCH M UMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEM BER ITA NO.723/MUM/2017 ( ASSESSMENT YEAR :2011-12 ) M/S. AIBANI ENTERPRISES 501, ARC PLAZA, NEXT TO CENTURY CLUB, VEERA DESAI EXTN. ROAD, JOGESHWARI (W), MUMBAI-400 012 VS. DCIT,CIRCL-24(1) MUMBAI P AN/GIR NO. AA KFA3942K APPELLANT ) .. RESPONDENT ) ASSESSEE BY RAKESH JOSHI, AR REVENUE BY SATISH CHANDRA RAJORE, DR DATE OF HEARING 25/07/2019 DATE OF PRONOUNCEMENT 31 / 0 7 /201 9 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX APPEALS42, MUMBA I DATED 19/09/2016 AND IT PERTAINS TO THE ASSESSMENT YEAR 2 011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTIO N OF LEARNED ASSESSING OFFICER IN DISALLOWING THE CLAIM OF MAINT ENANCE CHARGES OF RS.27,00,000/- U/S.37 OF THE INCOME TAX ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTIO N OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.10,00 ,000- U/S.68 OF THE INCOME TAX ACT, 1961 BY TREATING THE AMOUNT RECEIVE D FROM SHRI SHALINI ASHOK MUKADAM AS ALLEGED UNEXPLAINED CASH CREDIT, W ITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE . 3) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTIO N OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.36,00 ,000/- U/S.68 OF THE INCOME TAX ACT, 1961 BY TREATING THE CASH DEPOSIT A S ALLEGED ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 2 UNEXPLAINED CASH CREDIT, WITHOUT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF THE CASE, 4) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUND OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, M/S AIBANI ENTERPRISES IS A BUILDER AND DEVELOPER. THE ASSESSE E HAS FILED ITS RETURN OF INCOME FOR AY 2011-12 ON 17/07/2011, DECL ARING TOTAL INCOME AT RS. 13,56,540/-. THE CASE WAS SELECTED FO R SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT, 1961 ON 26/03/2014, DETERMINING THE TOTAL INCOME AT RS.86,5 6,540/-, BY MAKING ADDITIONS TOWARDS DISALLOWANCE OF MAINTENANC E CHARGES U/S 37(1) FOR RS. 27 LACS, ADDITIONS TOWARDS UNEXPLAINE D CASH CREDIT U/S. 68 OF THE I.T.ACT, 1961, FOR RS. 46 LACS, IN RESPEC T OF ADVANCES RECEIVED FOR SALE OF FLATS. THE ASSESSEE CARRIED TH E MATER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, BUT COULD NOT SUCCEED. THE LD.CIT(A), FOR DETAILED REASONS RECORDED IN ITS APP ELLATE ORDER, DATED 19/09/2016, DISMISSED APPEAL FILED BY THE ASSESSEE AND CONFIRMED ADDITIONS MADE TOWARDS DISALLOWANCES OF MAINTENANCE CHARGES AND UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T.ACT, 1961 . AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.1 OF APPEAL IS DISALLOWANCE OF CLAIM OF MAINTENA NCE CHARGES. THE ASSESSEE IS A BUILDER AND DEVELOPER, DEVELOPED A PR OPERTY CALLED, ARCH PLAZA AND SOLD FEW UNITS AND CONTINUED TO HOL D UNSOLD UNITS. THE ASSESSEE HAS PAID MAINTENANCE CHARGES OF RS. 27 LACS, IN RESPECT OF UNSOLD FLATS TO A SOCIETY, WHICH IS MAIN TAINING THE PROPERTY. ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 3 THE LD.AO HAS DISALLOWED MAINTENANCE CHARGES, ON TH E GROUND THAT NO DETAILS HAS BEEN FILED TO JUSTIFY PAYMENT OF MAI NTENANCE CHARGES. 4. THE LD.AR FOR THE ASSESSEE, AT THE TIME OF HEARI NG, SUBMITTED THAT THE LD.CIT(A) WAS ERRED IN CONFIRMING ADDITION S TOWARDS MAINTENANCE CHARGES OF RS. 27 LACS, WITHOUT APPRECI ATING THE FACT THAT, THE ASSESSEE NEED TO MAINTAIN THE PROPERTY, I N RESPECT OF UNSOLD UNITS, FOR WHICH MAINTENANCES CHARGES INCLUD ING MUNICIPAL TAXES HAS BEEN PAID. THE ASSESSEE, FURTHER, SUBMITT ED THAT IT HAS FILED NECESSARY DETAILS INCLUDING RECEIPTS FROM BRH UAN MUMBAI MAHA NAGARA PALIKA FOR PROOF OF MUNICIPAL TAXES. THE AO, IGNORING ALL EVIDENCES SIMPLY MADE ADDITIONS, ON THE GROUND THAT NO DETAILS HAS BEEN FILED. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTED ORDER OF THE LD.CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE LD. AO NEVER DISPUTED FACT THAT THE ASSESSEE IS A BUILD ER AND DEVELOPER AND HAD DEVELOPED A PROPERTY CALLED ARC PLAZA. IT I S ALSO NOT IN DISPUTE THAT CERTAIN UNITS WERE REMAINS UNSOLD FOR THE IMPUGNED ASSESSMENT YEAR. WHEN, THE ASSESSEE IS HAVING UNSOL D UNITS OF PROPERTY, IT NEEDS TO MAINTAIN SUCH PROPERTIES BY P AYING NECESSARY ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 4 MUNICIPAL TAXES AND OTHER INCIDENTAL EXPENSES. IN T HIS CASE, THE ASSESSEE HAS FILED VARIOUS DETAILS INCLUDING RECEIP TS FOR PAYMENT OF MUNICIPAL TAXES TO BMC AND ALSO BANK STATEMENT OF T HE SOCIETY, WHICH IS MAINTAINING THE PROPERTY CALLED ARC PLAZA COOPERATE HOUSING SOCIETY, WHICH ARE PART OF PAPER BOOK PAGE NO. 6-23 FILED BY THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERE D VIEW THAT THE AO, AS WELL AS CIT(A) WERE ERRED IN DISALLOWANCE OF MAINTENANCE CHARGES. ACCORDINGLY, DIRECT THE AO TO DELETE THE A DDITIONS MADE TOWARDS DISALLOWANCE OF MAINTENANCE CHARGES. 6. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO. 2 AND 3 OF ASSESSEES APPEAL IS ADDITIONS TOWAR DS UNEXPLAINED CASH CREDIT ON U/S 68 OF THE I.T.ACT, 1961, AMOUNT ING TO RS. 46 LACS. THE AO HAS MADE ADDITIONS TOWARDS UNEXPLAINED CASH CREDITS TOWARDS ADVANCE RECEIVED FOR SALE OF FLATS, ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS OF THE PARTIES. THE AO FURTHE R, OBSERVED THAT IN RESPECT OF ADVANCE FOR SALE OF FLATS NO. 103, ALTHO UGH, THE ASSESSEE CLAIMS TO HAVE RECEIVED ADVANCE FROM MS. SHALINI A SHOK MUKUMDAN, BUT WHEN NOTICES ISSUED TO THE SAID PERSO N, NO DETAILS WERE FILED. SIMILARLY, IN RESPECT OF ADVANCES CLAIM ED TO HAVE RECEIVED FROM B.K.ASHOK AND KAJAL D. SANKHE, IT WAS OBSERVED THAT ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 5 B.K.ASHOK HAS CONFIRMED A SUM OF RS. 5 LACS AS AGAI NST RS. 19 LACS ADVANCE CLAIMED TO HAVE RECEIVED BY THE ASSESS EE.LIKEWISE, MS. KAJAL D. SANKHE, NEVER RESPONDED TO 133(6) NOTI CES ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREF ORE, HE OPINED THAT AMOUNT RECEIVED FROM SHRI B.K.ASHOK TO THE EXT ENT OF RS. 14 LACS AND MS.KAJAL D. SANKHE TO THE EXTENT OF RS. 22 LACS IS UNEXPLAINED AND ACCORDINGLY, MADE ADDITIONS U/S 68 OF THE I.T.ACT, 1961. 7. THE LD. AR FOR THE ASSESSEE, SUBMITTED THAT THE AO AS WELL AS CIT(A) WERE ERRED IN ADDITIONS TOWARDS ADVANCE RECE IVED FOR SALE OF FLATS FROM THREE PARTIES U/S 68 OF THE I.T.ACT, 196 1, EVEN THOUGH, THE ASSESSEE HAS FILED COMPLETE DETAILS, INCLUDING CASH RECEIPTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. AR, F URTHER SUBMITTED THAT ALTHOUGH, SHRI.B.K.ASHOK CONFIRMED P AYMENT TO THE EXTENT OF RS. 5 LACS, BUT FACT REMAINS THAT HE HAS PAID A SUM OF RS. 19 LACS, WHICH IS FURTHER EVIDENCED BY SALE AGREEME NT BETWEEN THE PARTIES, AS PER WHICH, HE HAS CONFIRMED HAVING PAID A SUM OF RS. 27 LACS. SIMILARLY, IN RESPECT OF KAJAL D. SANKHE, ALT HOUGH INITIAL NOTICES ISSUED U/S 133(6) WAS RETURNED, BUT ASSESSEE HAS FI LED CONFIRMATION WITH NEW ADDRESS. THEREFORE, IT IS INCORRECT ON THE PART OF AO TO ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 6 ALLEGE THAT NO DETAILS HAS BEEN FILED TO PROVE ADVA NCES RECEIVED FOR SALE OF FLATS. 8. THE LD. AR FOR THE ASSESSEE, PUT FORTH ON ALTERN ATIVE ARGUMENT IN LIGHT OF SURVEY CONDUCTED IN THE CASE OF ASSESEE DURING SUBSEQUENT PERIOD, AS PER WHICH THE ASSESSEE HAS AD MITTED A SUM OF RS. 3,40,00,000/-, IN RESPECT OF POSSIBLE OMISSI ONS AND ALSO ON ACCOUNT OF ON MONEY RECEIVED FOR SALE OF FLATS. THE REFORE, IF AT ALL AMOUNT OF RS. 14 LACS IS NOT CONFIRMED BY THE PERSO N WHO GAVE ADVANCE, THE SAME IS COVERED OUT OF DISCLOSURE MADE DURING THE COURSE OF SURVEY AND ACCORDINGLY, FURTHER ADDITIONS TOWARDS ADVANCES FOR NON CONFIRMATION BY THE PARTY AMOUNTS TO DOUBLE ADDITIONS AND HENCE, THE SAME MAY BE DELETED. 9. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTE D ORDER OF THE CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. IN RESPECT OF, ADDITIONS OF RS. 10 LACS TOWARDS ADVANC E RECEIVED FOR SALE OF FLAT NO. 103 FROM SHALINI ASHOK MUKUMDAN, T HE ASSESEE HAS FILED LEDGER ACCOUNT COPY, AS PER WHICH ADVANCE FOR SALE OF FLAT HAS BEEN COLLECTED ON VARIOUS DATES. IN RESPECT OF ADVA NCES RECEIVED FROM B.K. ASHOK, THE ASSESEE HAS FILED CASH RECEIPT ALONG WITH AGREEMENT, AS PER WHICH A SUM OF RS. 19 LACS WAS CO LLECTED UP TO ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 7 DATE OF F.Y. 2010-11. SIMILARLY, IN RESPECT OF ADV ANCE RECEIVED FROM KAJAL D.SANKE, THE ASSESEE HAS FILED CONFIRMATION ALONG WITH CASH RECEIPTS AND AGREEMENT FOR SALE. ALL THESE EVIDENCE S ARE PART OF PAPER BOOK FILED BY THE ASSESSEE. HOWEVER, THE LD. AR FOR THE ASSESSEE CLAIMS THAT THE AGREEMENTS FOR SALE WAS NO T BEFORE THE AO. THEREFORE, IN ORDER TO VERIFY CORRECTNESS OF C LAIM OF ADVANCE RECEIVED FROM PARTIES, THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO. WE FIND THAT WHEN, THE ASSESSEE HAS FURNISHED P RIMARY EVIDENCES INCLUDING CONFIRMATION FROM THE PARTIES, IT IS FOR THE AO TO ASCERTAIN CORRECTNESS OF CLAIM MADE BY THE ASSESSEE BY CARRYING OUT, FURTHER INVESTIGATION INCLUDING SUMMONING THE PARTIES FOR VERIFICATION. IN THIS CASE, WE FIND THAT, THE AO HA S TAKEN ADVERSE VIEW, IN RESPECT OF ADVANCES RECEIVED FROM ABOVE PA RTIES ONLY FOR THE REASON THAT THE PARTIES WERE NOT RESPONDED TO U/S 1 33(6) NOTICES. NO DOUBT, WHEN INFORMATION HAS BEEN CALLED FOR FROM TH E PARTIES, THEY SHOULD FILE NECESSARY DETAILS, BUT NON FURNISHING O F INFORMATION BY THE PARTIES CANNOT BE ATTRIBUTED TO THE ASSESSEE, BECAU SE ATTENDANCE OF PARTIES BEFORE THE AO IS NOT IN THE HANDS OF THE AS SESSEE. AT BEST, ASSESSEE CAN FILE WHATEVER IT CAN FILE BEFORE THE A O. IN THIS CASE, THE ASSESSEE HAS DISCHARGED ITS ONUS BY FILING PRIMARY EVIDENCES INCLUDING CONFIRMATION FROM THE PARTIES. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS INCORRECT IN COMING TO THE ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 8 CONCLUSION THAT ADVANCES RECEIVED FROM THREE PARTI ES IS NOT PROVED. HOWEVER, AS CLAIMED BY THE ASSESSEE, IT HAS FILED C ERTAIN ADDITIONS EVIDENCES IN FARM OF AGREEMENT BETWEEN THE PARTIES TO SUPPORT ITS CLAIM OF ADVANCE RECEIVED FOR SALE OF FLATS. THESE DOCUMENTS WERE NOT BEFORE THE AO, AT THE TIME OF ASSESSMENT PROCEE DINGS. THEREFORE, IN ORDER TO GIVE AN OPPORTUNITY TO THE A O, TO VERIFY A ADDITIONAL EVIDENCES FILED BY THE ASSESEE, WE SET A SIDE THE ISSUE TO THE FILE OF THE AO AND DIRECT HIM TO CAUSE NECESSAR Y ENQUIRIES IN LIGHT OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND D ECIDE THE ISSUE IN ACCORDANCE WITH LAW. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31/07/2 019 SD/- (RAM LAL NEGI) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 31/07/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI ITA NO.723//MUM/2017 M/S. AIBANI ENTERPRISES 9 BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//