LEGS APPAREL LTD, MUMBAI V. ACIT CEN CIR 11, MUMBAI

ITA 7312/MUM/2010

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0974 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 26-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 26-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence; Reasonable cause
• Section: 40A(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO. 7312 & 7313/MUM/2010 / ASSESSMENT YEAR 2006-07 & 2007-08 M/S. LEGS APPAREL (INDIA) LTD. A-1001, RUSHI TOWERS, SWAMI SAMARTH NAGAR, ANDHERI (WEST), MUMBAI 400 053 / VS. THE ASSTT. COMM. OF INCOME TAX, CENTRAL CIR.II, OLD CGO BLDG.,8 TH FLOOR, M.K.ROAD, CHURCHGATE, MUMBAI 400020 ./ ./ PAN/GIR NO. : AAFCL 6912F ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI PRAKASH JHUNJHUNWALA RESPONDENT BY : MS. PADMAJA # $ % / DATE OF HEARING : 02/07//2015 # $ % / DATE OF PRONOUNCEMENT : 02/07/2015 / O R D E R PER I.P.BANSAL, JM: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND A RE DIRECTED AGAINST A CONSOLIDATED ORDER PASSED BY LD. CIT(A)-37, MUMBAI DATED 19/07/2010 FOR ASSESSMENT YEARS 2006-07 AND 2007-08. GROUNDS OF A PPEAL IN BOTH THE APPEALS READ AS UNDER: GROUNDS OF APPEAL IN ITA NO.7312/MUM/2010: 1. ON FACT & CIRCUMSTANCES OF THE CASE & LAW ON T HE SUBJECT. THE LEARNED ASSESSING OFFICER (AO) ERRED IN DISALLOWING RS.9407 42/- BEING 20% OF TOTAL PURCHASES AMOUNTING TO RS.4703710/-. ON FACTS & C IRCUMSTANCES OF THE CASE & LAW ON THE SUBJECT THE LEARNED CIT(A) ERRED IN UPHO LDING THE ADDITIONS. ON FACTS & CIRCUMSTANCES OF THE CASE & LAW ON THE SUBJECT TH E ADDITION BE DELETED. . / ITA NO. 7312 & 7313/MUM/2010 / ASSESSMENT YEARS 2006-07 & 2007-08 2 GROUNDS OF APPEAL IN ITA NO.7313/MUM/2010: 1. ON FACT & CIRCUMSTANCES OF THE CASE & LAW ON T HE SUBJECT. THE LEARNED ASSESSING OFFICER (AO) ERRED IN DISALLOWING 20% OF PURCHASES OF RS.11416373/- AMOUNTING TO RS.2283274/- UNDER SECTION 40A(3) OF T HE ACT. ON FACTS & CIRCUMSTANCES OF THE CASE & LAW ON THE SUBJECT THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION. ON FACTS & CIRCUMSTANCES O F THE CASE & LAW ON THE SUBJECT THE ADDITION BE DELETED. 2. AT THE OUTSET IT WAS POINTED OUT BY LD. AR THAT IN FOLLOWING GROUP CASES, UNDER SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE MATTER WAS RESTORED BACK TO THE FILE OF AO, THEREFORE, IT WAS SUBMITTED THAT THESE APPEALS MAY ALSO BE RESTORED BACK TO THE FILE OF AO FOLLOWING THESE DECISIONS: (1) IN THE CASE OF SANGEETA SANJAY JHUNJHUNWALA VS. AC IT, ITA NO.7929 TO 7934/MUM/2010, ASSESSMENT YEARS 2002-03, 03-04.05- 06, 06-07, 07-08 & 08-09, ORDER DATED 20/02/2013. (2) IN THE CASE OF SHREE SHARDA INDUSTRIES P. LTD. VS. ACIT, IN ITA NOS. 7314 TO 7318/MUM/2010, ASSESSMENT YEARS 2002-03 TO 2006-07, ORDER DATED 3/4/2013. (3) IN THE CASE OF M/S. NARAYANI APPARELS PVT. LTD. VS. ACIT, ITA NOS. 7630 7634/MUM/2010, ASSESSMENT YEARS 2008-09, 2006-0 7, 2005-06, 2003- 04 AND 2004-05 RESPECTIVELY, ORDER DATED 29 TH JANUARY 2014. (4) IN THE CASE OF SANJAY JHUNJHUNWALA HUF VS. ACIT IN ITA NOS. 8280 & 8281/MUM/2010, ASSESSMENT YEAR 2002-03 & 2003-04, O RDER DATED 03/03/2014. 3. LD. CIT-DR DID NOT OBJECT TO SUCH SUBMISSIONS OF THE ASSESSEE AND SUBMITTED THAT THE MATTER MAY BE RESTORED TO BE FIL E OF AO FOLLOWING AFOREMENTIONED DECISIONS. 4. IN THIS VIEW OF THE SITUATION, WE HAVE HEARD BOT H THE PARTIES. BEFORE US SPECIFIC REFERENCE WAS MADE TO THE ORDER OF THE TRI BUNAL IN THE CASE OF M/S.. SHREE SHARDA INDUSTRIES P. LTD.(ASSOCIATE COMPANY) AND OBSERVATIONS OF THE . / ITA NO. 7312 & 7313/MUM/2010 / ASSESSMENT YEARS 2006-07 & 2007-08 3 TRIBUNAL WHICH WERE REFERRED TO CONTEND THAT THE M ATTER SHOULD BE RESTORED BACK TO THE FILE OF AO ARE IN PARA 5 & 6, WHICH ARE REPRODUCED BELOW: 5. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS A REASONABLE CAUSE FOR NON-REPRESENTATION OR IMPROPER REPRESENTATION OF TH E CASE BEFORE THE AO AND THE CIT(A) PROPERLY WHICH LEAD TO THE IMPUGNED ADDITION S. QUALITY OF JUSTICE ASSUMES GREAT IMPORTANCE IN MATTERS OF ADMINISTRATION OF JU STICE OF COURSE, WITH DUE REGARD TO THE PROCEDURES INVOLVED. IN THIS CASE, WITH THE WARRANT OF ARREST IS ISSUES AGAINST THE DIRECTORS OF THE COMPANY, IT IS UNDERST ANDABLE, THESE CIVIL AND ECONOMIC LITIGATIONS ASSUMES LESSER IMPORTANCE TO T HE ASSESSEE. THAT CAUSED MESS IN THE ASSESSMENT PROCEEDINGS AND AO PROCEEDED TO DISALLOW ALL THE CLAIMS OF EXPENDITURE DEBITED TO THE P AND L ACCOUNT MERCI LESSLY. FURTHER, THIS IS A CASE OF FILING OF ADDITIONAL EVIDENCES WHICH HAVE TO BE ADMITTED IN VIEW OF THE NEXUS TO THE ADDITIONS IN QUESTION AND ALSO IN THE INTEREST OF RENDERING OF THE JUSTICE, WE ADMIT THE SAME AND REMAND THEM TO THE FILES OF THE AO FOR EXAMINING THE ISSUES AFRESH AFTER GRANTING A REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE IN ALL THE FIVE APPEALS ARE SET ASIDE. 6. IN THE RESULT, ALL THE FIVE APPEALS FILED BY TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF TRIBUNAL IN THE CASE OF ASSOCIATE COMPANY, WHICH IS SAID TO BE UNDER SIMILA R FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTORE THE ISSUE RAISED IN THESE A PPEALS ALSO TO THE FILE OF AO WITH SIMILAR DIRECTIONS. WE ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. OR DER PRONOUNCED IN THE OPEN COURT ON 02/07/2015 # + , - 02/07/2015 # SD/- SD/- ( . . / B.R.BASKARAN ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; , DATED 02/07/2015 . / ITA NO. 7312 & 7313/MUM/2010 / ASSESSMENT YEARS 2006-07 & 2007-08 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /$ ( ) / THE CIT(A)- 4. /$ / CIT 5. 01 $23 , % 23 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, 0$ $ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS