KAYFAB ENTERPRISES P.LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 7294/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8702 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 08-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Business income
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 7294/MUM/2014 : A.Y : 2010 - 11 KAYFAB ENTERPRISES PVT. LTD., C/O KUMAR BUILDERS, ALLI CHAMBERS, OFFICE NO. 7, NAGINDAS MASTER ROAD, FLORA FOUNTAIN, MUMBAI 400 020 PAN : AAACC5319F (APPELLANT) VS. DCIT - 8(2), MUMBAI (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI RAJESH KUMAR YADAV DATE OF HEARING : 11/10/2017 DATE OF PRONOUNCEMENT : 25 /10/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 17, MUMBAI DATED 28.08.2014, PERTAINING TO THE ASSESSMENT YEAR 2010 - 11, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 21.03.2013 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NO. 7294/MUM/2014 KAYFAB ENTERPRISES PVT. LTD. 2. IN ITS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE 1 . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PASSING ORDER WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.74,15,358/ - UNDER SECTION 41(1) OF THE ACT. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.5,57,84,627/ - UNDER SECTION 68 OF THE ACT. 3. AT THE TIME OF HEARING, IT WAS NOTICED THAT NONE APPEARED ON BEHALF OF THE APPELLANT - ASSESSEE INSPITE OF THE FACT THAT O N THE EARLIER DATE OF HEARING ON 07.06.2017, THE MATTER WAS ADJOURNED ON THE REQUEST OF THE ASSESSEE AND THE DATE WAS DULY NOTED BY THE ASSESSEE S REPRESENTATIVE. INSPITE OF THE SAME, THERE IS NO APPEARANCE NOR ANY APPLICATION FOR ADJOURNMENT ON BEHALF OF THE ASSESSEE AND, THEREFORE, IN VIEW OF RULE 2 4 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE APPEAL OF THE ASSESSEE IS BEING DISPOSED OFF EX - PARTE THE APPELLANT - ASSESSEE AFTER HEARING THE RESPONDENT - REVENUE ON MERITS. 4. IN BRIEF, THE RELEVANT FACTS AS EMERGING FROM THE ORDERS OF THE AUTHORITIES BELOW CAN BE SUMMARISED AS FOLLOWS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS. THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER REVEALS THAT AN ADDITION OF RS.74,15,358/ - HAS BE EN MADE BY THE ASSESSING OFFICER U/S 41(1) OF THE 3 ITA NO. 7294/MUM/2014 KAYFAB ENTERPRISES PVT. LTD. ACT. IN THIS CONTEXT, AS PER THE RELEVANT DISCUSSION IN PARA 5.1 OF THE ASSESSMENT ORDER, IT IS REVEALED THAT RS.74,15,358/ - COMPRISED OF RS.70,00,000/ - ON ACCOUNT OF PROVISION FOR TAXATION AND RS.74,880/ - FOR OTHER CREDITORS. IN THE ABSENCE OF ANY EXPLANATION FORTHCOMING, THE ASSESSING OFFICER TREATED THE SAID SUM AS REPRESENTING LIABILITIES NO LONGER REQUIRED AND HENCE ASSESSABLE U/S 41(1) OF THE ACT. THE CIT(A) NOTED THAT IN THE APPELLATE PROCEEDINGS, THE ASSESSEE DID NOT PURSUE THE APPEAL AND, THEREFORE, HE PROCEEDED TO ADJUDICATE THE ISSUE ON THE BASIS OF THE MATERIAL ON RECORD. THE CIT(A) ALSO AFFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE SAID ASPECT. 5. THE SECOND ASPECT BEFORE US IS WITH RE GARD TO THE ADDITION OF RS.5,57,84,627/ - . THE ASSESSING OFFICER NOTED THAT ASSESSEE COULD ONLY FILE CONFIRMATIONS FROM THE CONCERNED PARTIES , BUT DID NOT FURNISH ANY BANK OR FINANCIAL STATEMENTS OF THE LENDERS WHICH ARE NECESSARY INGREDIENTS TO TEST THE PARAMETERS OF SEC. 68 OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE SAID CREDITS AS UNEXPLAINED WITHIN THE MEANING OF SEC. 68 OF THE ACT. THE CIT(A) HAS ALSO AFFIRMED THE DECISION OF THE ASSESSING OFFICER PRIMARILY FOR THE REASON S WHICH WE HAVE NOTED IN THE EARLIER PARA IN THE CONTEXT OF THE OTHER ADDITION. 6. BEFORE US, THE ASSESSEE IS IN APPEAL CHALLENGING THE SUSTENANCE OF THE ADDITIONS BY THE CIT(A). SO HOWEVER, ASSESSEE HAS NOT PUT IN ANY APPEARANCE AND THERE IS NO MATERIAL WHICH WOULD REQUIRE US TO DISTRACT FROM THE FINDINGS OF THE LOWER AUTHORITIES. NOTABLY, WITH REGARD TO THE ADDITION OF RS.5,57,84,627/ - U/S 68 OF THE ACT, THE ASSESSING OFFICER HAS CATEGORICALLY INFERRED THAT IN THE ABSENCE OF THE REQUISITE PROOF THE 4 ITA NO. 7294/MUM/2014 KAYFAB ENTERPRISES PVT. LTD. IDE NTITY OF THE CREDITORS , THE CREDIT - WORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS HAVE NOT BEEN PROVED. IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY, THE AFORESAID FINDINGS OF THE ASSESSING OFFICER ARE LIABLE TO BE AFFIRMED. WE HOL D SO . 7. SIMILARLY, WITH REGARD TO THE ADDITION OF RS.74,15,358/ - , THERE IS NO EXPLANATION FROM THE SIDE OF THE ASSESSEE AS TO WHY THE ASSESSING OFFICER WAS WRONG IN INVOKING SEC. 41(1) OF THE ACT. PERTINENTLY, IN PARAGRAPHS 5.2 AND 5.3 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER CLEARLY BROUGHT OUT THAT ASSESSEE HAD NOT GIVEN EVEN THE BASIC DETAILS LIKE ADDRESSES OF THE PARTIES, PAN, ETC. AND THE NATURE OF THE AMOUNTS OUTSTANDING TO THE CREDITORS. INSOFAR AS THE PROVISION OF TAX FOR RS.70,00,000/ - IS CONCERNED, ON THIS ASPECT ALSO, THE ASSESSING OFFICER HAS APPROPRIATE LY DEDU C ED THAT SUCH SUM COULD NOT BE TREATED AS AN ALLOWABLE DEDUCTION WHILE COMPUTING THE BUSINESS INCOME. IN SUM AND SUBSTANCE, IN THE ABSENCE OF ANY COGENT MATERIAL LED BY THE ASSES SEE, WE FIND NO REASON TO INTERFERE WITH THE ULTIMATE CONCLUSION OF THE CIT(A), WHICH WE HEREBY AFFIRM. 8. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 T H OCTOBER, 2017. SD/ - SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 2 5 T H OCTOBER, 2017 *SSL* 5 ITA NO. 7294/MUM/2014 KAYFAB ENTERPRISES PVT. LTD. COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI