ITO 20(3)(2), MUMBAI V. SANJAY B SANGHVI, MUMBAI

ITA 7317/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3050 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SARAVANAN
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Reopening of assessment; Deemed dividend
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER / I .TA NO. 7317/MUM/2014 ( / ASSESSMENT YEAR:2008-09 THE ITO - 20(3)(2), PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 / VS. SHRI SANJAY B. SANGHVI, 546, TOP FLOOR, BHUPENDRA VILLA, JAM-E-JAMSHED ROAD,MATUNGA, MUMBAI-400 019 C.O. NO. 91/MUM/2016 (ARISING OUT OF I .TA NO. 7317/MUM/2014) ( / ASSESSMENT YEAR:2008-09 SHRI SANJAY B. SANGHVI, 546, TOP FLOOR, BHUPENDRA VILLA, JAM-E-JAMSHED ROAD, MUMBAI-400 019 / VS. THE ITO - 20(3)(2), PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 ./ ./ PAN/GIR NO. AAGPS 5966H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI J.SARAVANAN / RESPONDENT BY: SHRI M.SUBRAMANIAN / DATE OF HEARING :07.07.2016 ! / DATE OF PRONOUNCEMENT :21 .09.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE LD. CIT(A)- 29, MUMBAI DATED 30.09.2014 PERTAINING TO A SSESSMENT YEAR 2008-09. ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 2 2. THE REVENUE IN ITS APPEAL CHALLENGED THE ORDER O F THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 1,12,56,000/ - MADE U/S. 2(22)(E) OF THE ACT. 3. BRIEF FACTS ARE THAT THE ASSESSEE WHO IS AN INDI VIDUAL ENGAGED IN THE BUSINESS OF TRADING IN SHARES FILED RETURN OF I NCOME ON 30.3.2009 DECLARING TOTAL INCOME OF RS. 11,66,460/-. THE ASSE SSMENT WAS COMPLETED U/S. 143(3) R.W. SECTION 147 OF THE ACT D ATED 28.3.2013 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS. 1,2 4,22,460/- AND WHILE COMPLETING THE ASSESSMENT ADDITION OF RS. 1,1 2,56,000/- WAS MADE AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED FROM THE BALANCE SHEET OF THE ASSESSEE THAT HE HAS SHOWN UNS ECURED LOAN FROM M/S. EQUISEARCH BROKING PVT. LTD (EBPL). SIMILARLY , ON PERUSAL OF THE LEDGER ACCOUNT OF EBPL IN THE BOOKS OF THE ASSESSE E HE FOUND THAT THE ASSESSEE RECEIVED MONEY ON VARIOUS DATES DURING THE FINANCIAL YEAR 2007-08 RELEVANT TO A.Y. 2008-09. HE ALSO NOTICED THAT ASSESSEE WAS HOLDING 66.91% OF SHARES OF EBPL THEREFORE, ASSESSI NG OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY THE LOAN S RECEIVED FROM EBPL SHOULD NOT BE TREATED AS DEEMED DIVIDEND UNDER THE PROVISIONS OF SEC. 2(22)(E) OF THE ACT. 3.1. IN RESPONSE TO THE QUERY OF THE ASSESSING OFFI CER, THE ASSESSEE SUBMITTED THAT THESE AMOUNTS WERE RECEIVED IN THE N ORMAL COURSE OF BUSINESS OF BUYING /SELLING OF SHARES AS PER CLIENT -BROKER RELATIONSHIP WITH EBPL. IT WAS SUBMITTED BY THE ASSESSEE THAT T HE BROKERAGE AND OTHER CHARGES WERE PAID TO EBPL BY THE ASSESSEE FOR CARRYING ON THE TRADES AS PER CONTRACT NOTE ISSUED TO THE ASSESSEE BY EBPL. THEREFORE, IT WAS CONTENDED BY THE ASSESSEE THAT SI NCE THE AMOUNTS WERE RECEIVED IN THE NORMAL COURSE OF BUYING AND SE LLING SHARES, IT ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 3 WOULD NOT FALL WITHIN THE DEFINITION OF DEEMED DIVI DEND U/S. 2(22)(E) OF THE ACT. THE ASSESSING OFFICER WITHOUT APPRECIA TING THE SUBMISSIONS OF THE ASSESSEE TREATED THE AMOUNTS REC EIVED FROM EBPL AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. 4. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION M ADE BY THE ASSESSING OFFICER TOWARDS DEEMED DIVIDEND U/S. 2(22 )(E) OF THE ACT HOLDING THAT THE MONEY RECEIVED WAS IN THE COURSE O F NORMAL BUSINESS TRANSACTIONS BETWEEN THE ASSESSEE AND EBPL . HE ALSO OBSERVED THAT THE MONEY HAS BEEN RECEIVED FROM THE COMPANY AND HAS AGAIN GONE BACK TO THE SAME COMPANY ON THE SAME DAY AS A PART OF BUSINESS TRANSACTION. THEREFORE, HE HELD THAT T HE TRANSACTIONS WERE IN THE NORMAL COURSE OF BUSINESS THEREFORE THE PROVISIONS OF SECTION 2(22)(E) ARE NOT ATTRACTED. 5. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY S UPPORTS THE ORDERS OF THE ASSESSING OFFICER. HE FURTHER SUBMIT S THAT THE COMPANY AND INDIVIDUAL ARE SEPARATE ENTITIES AND THE ASSESS EE RECEIVED MONIES FROM THE COMPANY IN THE CAPACITY OF DIRECTOR AND TH EREFORE IN A WAY IT IS IN DIRECT DISTRIBUTION OF PROFITS OF THE COMP ANY. THEREFORE, HE SUBMITS THAT THE ASSESSING OFFICER HAS RIGHTLY INVO KE THE PROVISIONS OF SEC. 2(22)(E) OF THE ACT. 6. THE LD. COUNSEL FOR THE ASSESSEE SUPPORTING THE ORDER OF THE LD. CIT(A) SUBMITS THAT THE TRANSACTIONS BETWEEN EBPL A ND ASSESSEE ARE IN THE COURSE OF BUSINESS OF PURCHASE AND SALE OF S HARES. THE ASSESSEE IS HAVING A RUNNING ACCOUNT WITH EBPL FOR THE PURPO SE OF HIS BUSINESS OF PURCHASE AND SALE OF SHARES AND THEREFORE THE PR OVISIONS OF SEC. 2(22)(E) HAVE NO APPLICATION. PLACING RELIANCE ON T HE DECISIONS IN THE CASE OF CIT VS PARLE PLASTICS LTD AND ANOTHER (332 ITR 63) (BOM) AND ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 4 IN THE CASE OF CIT VS SURAJ DEV DADA (367 ITR 78) ( P&H) HE SUBMITS THAT WHEN THE ASSESSEE HAS RUNNING ACCOUNT WITH THE COMPANY, THE PROVISIONS OF SEC. 2(22)(E) ARE NOT ATTRACTED UNLES S IT IS SHOWN THAT THE ASSESSEE WAS MISUSING FUNDS BY TAKING IT OUT F ROM THE COMPANY BY WAY OF LOAN OR ADVANCES INSTEAD OF DIVIDENDS TO AVOID PAYING TAXES BY THE COMPANY. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAWS RELIED ON. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE WHO IS HOLDING 66 .91% OF SHARE HOLDING OF EBPL RECEIVED AMOUNTS FROM THE EBPL IN T HE FORM OF ADVANCE AMOUNTING TO RS. 1,12,56,000/-. EBPL IS A SHARE BROKING COMPANY. THE ASSESSING OFFICER WAS OF THE VIEW THA T THE COMPANY ADVANCED MONEY TO ASSESSEE WHO IS HAVING SUBSTANTIA L SHARE HOLDING AND THEREFORE THE PROVISIONS OF SEC. 2(22)(E) ARE A TTRACTED TO THE AMOUNT ADVANCED BY THE COMPANY TO THE ASSESSEE. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT WAS RECE IVED IN THE NORMAL COURSE OF BUSINESS OF BUYING AND SELLING SHA RES AS PER CLIENT BROKER RELATIONSHIP WITH EBPL, AS THE ASSESSEE IS B UYING AND SELLING SHARES THROUGH THE COMPANY AS A CLIENT. IT WAS ALS O THE CONTENTION OF THE ASSESSEE THAT ASSESSEE WAS PAYING BROKERAGE AND CHARGES FOR CARRYING ON THE TRADES AS PER CONTRACT NOTES ISSUED BY EBPL TO THE ASSESSEE THEREFORE IT WAS THE CONTENTION THAT IT I S A RUNNING ACCOUNT BETWEEN EBPL AND THE ASSESSEE AS AN INDIVIDUAL AND THEREFORE PROVISIONS OF SEC. 2(22)(E) HAVE NO APPLICATION TO THE FACTS OF THE CASE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEP T THE CONTENTION OF THE ASSESSEE AND TREATED THE ADVANCE OF RS. 1,12,56 ,000/- AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. THE LD. CIT (A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE AVERMENTS OF TH E ASSESSING ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 5 OFFICER CONCLUDED THAT THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE EBPL ARE IN THE COURSE OF NORMAL BUSINESS TRANSACTI ONS THEREFORE THE PROVISIONS OF SEC. 2(22)(E) HAVE NO APPLICATION OBS ERVING AS UNDER: 21. THE APPELLANT IN THIS CASE, ADMITTEDLY, HAS S UBSTANTIAL HOLDING IN THE COMPANY M/S EQUISEARCH BROKING PVT. LTD WHICH I S 66.9%. THE COMPANY IS A BROKING COMPANY AND DEALS IN THE PURCH ASE/SALES OF SHARES ON BEHALF OF ITS CLIENTS. APART FROM BEING T HE DIRECTOR IN THE COMPANY, THE APPELLANT HAS A CLIENT-BROKER RELATION SHIP WITH THE COMPANY AND DEALS IN THE PURCHASE/SALES OF SHARES T HROUGH THE COMPANY. THIS EVIDENT FROM THE LEDGER ACCOUNT OF TH E APPELLANT IN THE BOOKS OF THE COMPANY WHEREIN THE OPENING BALANCE AS ON 04/04/2007 OF THE APPELLANT WITH THE COMPANY STANDS AT RS. 94, 260/- AND THE CLOSING BALANCE AS ON 31/03/2008 IS AT RS. (44,84,2 40). THOUGH MOST OF THE TIME, THE APPELLANT HAS A DEBIT BALANCE IN THE ACCOUNT WITH THE COMPANY YET THE FACT CANNOT BE DENIED THAT THE APPE LLANT HAS CLIENT- BROKER RELATIONSHIP WITH M/S EQUISEARCH BROKING PVT . LTD. AS A CLIENT OF THE COMPANY, THE APPELLANT HAS A RUNNING ACCOUNT WITH THE COMPANY, WHEREIN THE FUNDS HAVE COME FROM THE COMPA NY AND IN TURN INVESTED THROUGH THE SAME COMPANY TO CARRY OUT THE TRANSACTIONS OF PURCHASE/SALES OF SHARES. THE FUNDS AMOUNTING TO RS . 1,12,56,000/- WERE GIVEN BY THE COMPANY TO THE APPELLANT ON 29/08 /2007 AND THE APPELLANT ON THE SAME DATE HAS TRANSFERRED BACK THE FUNDS AMOUNTING TO RS. 1,13,40,000/- FROM THE SAME ACCOUNT TO THE C OMPANY M/S EQUISEARCH BROKING PVT. LTD FOR INVESTMENT PURPOSES . THE ENTRIES TO THIS EFFECT ARE REFLECTED IN THE BANK ACCOUNT NO. 1 07801000000076 OF THE APPELLANT MAINTAINED WITH CENTURIAN BANK. THE A O HAS NOT TRIED TO ANALYSE THE TRANSACTION COMPLETELY AND HAS NOT EXAM INED THE ROUTE OF THE TRANSACTION AND THE PURPOSE FOR WHICH THE MONEY HAS BEEN ADVANCED AND ITS UTILIZATION. IT IS NOT THE CASE OF THE AO THAT THE APPELLANT HAS TAKEN THE MONEY FROM THE COMPANY AND INVESTED IN THE ACQUISITION OF SOME PROPERTY WHICH RESULTED IN THE INDIVIDUAL BENEFIT. THE APPELLANT HAS OPERATED HIS ACCOUNT OF SALE/PURC HASE OF SHARE TRANSACTION WITH THE COMPANY AS A CLIENT IN INDIVID UAL CAPACITY. THE BROKING COMPANIES DO GIVE MONEY TO ITS CLIENTS TO I NVEST IN SHARES, WHICH IS A ROUTINE PRACTICE. THUS IT CANNOT BE SAID THAT THE COMPANY HAS GIVEN THE APPELLANT ANY GRATUITOUS PAYMENT UNDE R THE GARB OF LOAN OR ADVANCE OR IT IS A COLLUSIVE TRANSACTION AS STAT ED BY THE AO. IT'S A PURE COMMERCIAL TRANSACTION FOR THE SALE/PURCHASE O F SHARES BETWEEN THE COMPANY AND THE APPELLANT FOR WHICH THE APPELLA NT HAS PAID THE BROKERAGE ALSO TO THE COMPANY. 22. IN ORDER TO INVOKE THE PROVISIONS OF SECTION 2( 22)(E), THE AO NEED TO PROVE FURTHER THAT BY ADVANCING LOAN/AMOUNTS TO THE DIRECTOR, HE HAS BEEN BENEFITED INDIVIDUALLY BY THE RECEIVING THIS M ONEY FROM THE COMPANY IN QUESTION AND ALSO THE ADVANCING OF MONEY HAS SOME HIDDEN AGENDA. WITHOUT PROVING THE INDIVIDUAL BENEF IT BEING TAKEN BY THE SHAREHOLDER, THE ADVANCING OF MONEY WILL NOT PA RTAKE THE CHARACTER ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 6 OF DEEMED DIVIDEND. SECTION 2(22)(E) ONLY COVERS TH E PAYMENTS MADE BY WAY OF LOANS/ADVANCES GIVEN FOR THE BENEFIT OF T HE SHAREHOLDER BUT THE ADVANCES/PAYMENTS MADE DURING NORMAL BUSINESS P ROCESS CANNOT BE SAID TO BE COVERED UNDER SECTION 2(22)(E) OF THE ACT. 23. THE FACTS MENTIONED ABOVE ILLUSTRATES THAT THE TRANSACTIONS OF THE APPELLANT WITH THE COMPANY ARE NOT THAT OF ADVANCIN G OF ANY FIXED AMOUNT OF LOAN AT ANY PARTICULAR POINT OF TIME BUT IT HAD A RUNNING ACCOUNT WITH THE COMPANY WITH OVERDRAFT FACILITY AN D THIS FACILITY WAS OFFERED TO HIM ONLY IN CONSIDERATION FOR HAVING CLI ENT-BROKER RELATIONSHIP WITH THE COMPANY. THUS THE TRANSACTION S OF PAYMENTS BY THE COMPANY TO THE APPELLANT ARE IN THE NATURE OF B USINESS RELATIONSHIP, WHERE THE PAYMENT IF ANY HAS BEEN MADE, LOOKING AT THE BUSINESS CONSIDERATIONS OF BOTH THE PARTIES INVOLVED. 24. IN CIT V. RAJ KUMAR (2009) 30 (I) ITCL 268 (DEL -HC), IT WAS HELD THAT THE WORD ADVANCE WHICH APPEARS IN THE COMPANY OF THE WORD LOAN COULD ONLY MEAN SUCH ADVANCE WHICH CARRIES WITH IT AN OBLIGATION OF REPAYMENT. TRADE ADVANCE WHICH IS IN THE NATURE OF MONEY TRANSACTED TO GIVE EFFECT TO A COMMERCIAL TRANSACTION WOULD NO T, IN FALL WITHIN THE AMBIT OF THE PROVISIONS OF SECTION 2(22)( E) OF THE ACT. 25. SIMILARLY IN THE CASE OF COMMISSIONER OF INCOME -TAX V. ANKITECH (P.) LTD. [2011] 11 TAXMANN.COM 100 (DELHI), IT WAS HELD THAT WHERE LOANS AND ADVANCES ARE GIVEN IN NORMAL COURSE OF BU SINESS AND TRANSACTION IN QUESTION BENEFITS BOTH PAYER AND PAY EE COMPANIES, PROVISIONS OF SECTION 2(22)(E) CANNOT BE INVOKED. . 26. THE LEGISLATIVE INTENT OF THE INTRODUCTION OF T HE PROVISIONS OF SECTION 2(22((E) WAS TO NOT TO ALLOW THE COMPANIES TO ACCUM ULATE THE PROFITS BY NON DECLARATION OF THE DIVIDENDS AND THEREAFTER TO ADOPT A DEVICE TO GET THE BENEFIT OF SUCH PROFITS INDIRECTLY TO ITS SHARE HOLDERS, BY ADVANCING A LOAN FROM THE COMPANY TO THEM WHICH WOULD NEVER BE REPAID. BY DOING SO THE COMPANY MEETS AN OBLIGATION OF THE SHAREHOLD ER OR MAKES A PAYMENT FOR HIS INDIVIDUAL BENEFIT. THUS, THE SHARE HOLDER WOULD GET THE BENEFIT OF THE DIVIDENDS, THROUGH THE PROCESS OF OB TAINING SUCH BENEFIT OTHERWISE THAN BY WAY OF A DECLARATION OF DIVIDEND. TO AVOID SUCH DEVICE OF THE TAX EVASION BY THE CLOSELY HELD COMPA NIES, THE PROVISIONS OF SECTION 2(22((E) WERE BROUGHT ON THE STATUTE BOO K. 27. THE CASE OF THE APPELLANT DOES NOT FITS IN THE LEGISLATIVE INTENT OF THE PROVISIONS OF SECTION 2(22((E). PERUSAL OF THE BALA NCE SHEET OF THE M/S EQUISEARCH BROKING PVT. LTD AS ON 31/03/2008 SHOWS THAT THE COMPANY HAS PROFITS AT THE END OF THE YEAR AT RS. 2,12,52,0 51/- AND IT HAS PAID THE DIVIDEND ALSO DURING THE PERIOD UNDER CONSIDERA TION TO THE EXTENT OF RS. 1,36,08,0001- TO THE SHAREHOLDERS OUT OF THE AB OVE PROFITS, WHICH INCLUDES THE DIRECTORS AND THE OTHER SHARE HOLDERS AS WELL. THE COMPANY HAS ALSO PAID THE DIVIDEND DISTRIBUTION TAX OF RS. 23,40,000/- FOR THE YEAR UNDER CONSIDERATION. THESE FACTS HAVE BEEN TOTALLY IGNORED BY THE AO WHILE APPLYING THE PROVISIONS OF SECTION 2(22)(E) IN THE CASE ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 7 UNDER CONSIDERATION. IN VIEW OF THESE FACTS ALSO, T HE PROVISIONS OF SECTION 2(22((E) ARE NOT APPLICABLE IN THE INSTANT CASE. THE AO HAS ONLY TAKEN INTO CONSIDERATION THE INFLOW OF MONEY I N THE HANDS OF THE APPELLANT FROM THE COMPANY WITHOUT CONSIDERING THE PURPOSE AND DESTINATION OF SUCH MONEY RECEIVED. THE MONEY WAS I N FACT, AS STATED ABOVE, WAS IN THE COURSE OF NORMAL BUSINESS TRANSAC TION BETWEEN THE APPELLANT AND M/S EQUISEARCH BROKING PVT. LTD. THE MONEY HAS BEEN RECEIVED FROM THE COMPANY AND HAS AGAIN GONE BACK T O THE SAME COMPANY ON THE SAME DAY AS A PART OF BUSINESS TRANS ACTIONS. WHAT INDIVIDUAL BENEFIT OUT OF THIS TRANSACTION HAS BEEN RECEIVED BY THE APPELLANT, HAS NOT BEEN PROVED BY THE AO. 28. IN VIEW OF THE FACTS AND CIRCUMSTANCES AS WELL AS THE JUDICIAL PRONOUNCEMENTS CITED ABOVE, IN MY OPINION, THE AO H AS WRONGLY TREATED THE AMOUNT OF RS. 1,12,56,000/- GIVEN BY MI S EQUISEARCH BROKING PVT. LTD TO THE APPELLANT AS DEEMED DIVIDEN D BY INVOKING THE PROVISIONS OF SECTION 2(22)(E). 29. THE ABOVE TRANSACTION OF GIVING MONEY TO THE AP PELLANT BY M/S EQUISEARCH BROKING PVT. LTD. IS A PURE COMMERCIAL T RANSACTION FOR THE SALE/PURCHASE OF SHARES AND THEREFORE OUT OF TH E PURVIEW OF THE PROVISIONS OF SECTION 2(22)(E). THEREFORE THE ADDIT ION MADE AMOUNTING TO RS. 1,12,56,000/- AS DEEMED DIVIDEND IS NOT JUST IFIED AND HENCE DELETED. 8. AS COULD BE SEEN FROM THE ABOVE FINDING OF THE L D. CIT(A) THAT THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE EBPL ARE IN THE COURSE OF BUSINESS OF PURCHASE AND SALE OF SHARES BY THE A SSESSEE AND THE ASSESSEE IS HAVING RUNNING ACCOUNT WITH THE COMPANY WITH OVERDRAFT FACILITY AND THIS FACILITY WAS OFFERED TO THE ASSES SEE ONLY IN CONSIDERATION FOR HAVING CLIENT BROKER RELATIONSHIP WITH THE COMPANY. THEREFORE, IT WAS CONCLUDED THAT THE TRAN SACTIONS OF PAYMENTS BY THE COMPANY TO THE ASSESSEE ARE IN THE NATURE OF BUSINESS RELATIONSHIP, AND THE PROVISIONS OF SEC. 2 (22)(E) HAVE NO APPLICATION. ON GOING THROUGH THE LD. CIT(A), WE D O NOT FIND ANY VALID REASON TO INTERFERE WITH THE FINDINGS AS NONE OF THESE FINDINGS OF THE LD. CIT(A) ARE REBUTTED BY THE REVENUE WITH EVI DENCES. THEREFORE, WE SUSTAIN THE ORDER OF THE LD. CIT(A) I N DELETING THE ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 8 ADDITION MADE U/.S. 2(22)(E) OF THE ACT. THE APPEA L FILED BY THE REVENUE IS DISMISSED. C.O. NO. 91/M/2016 9. COMING TO THE C.O. FILED BY THE ASSESSEE, WE FIN D THAT ASSESSEE HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN HOLDI NG THAT THE REOPENING OF ASSESSMENT U/S. 147 IS INVALID AND BAD IN LAW. 10. THE APPEAL IS BARRED BY LIMITATION BY ONE DAY. THE ASSESSEE HAS FILED AN AFFIDAVIT EXPLAINING THE REASONS WHICH CAUSED FOR NOT FILING THE APPEAL IN TIME. 11. WE FIND FROM THE LD. CIT(A)S ORDER THAT THE AS SESSEE INITIALLY CHALLENGED THE REOPENING OF ASSESSMENT MADE U/S. 14 3(3) R.W. SEC. 147 OF THE ACT AND THIS GROUND WAS NOT PRESSED BY T HE ASSESSEE AT THE TIME OF HEARING BEFORE THE LD. CIT(A). HOWEVER, TH E ASSESSEE BY WAY OF CROSS OBJECTION NOW WANTS TO CHALLENGE THE REOPE NING BEFORE THE TRIBUNAL. SINCE THE ASSESSEE CHOSE NOT TO PRESS TH E GROUND FOR REOPENING BEFORE THE LD. CIT(A) AND WITHDREW THE GR OUND, THE GROUND RAISED BY THE ASSESSEE NOW BEFORE US IN THE CROSS OBJECTION DO NOT ARISE FROM THE ORDER OF THE LD. CIT(A), THEREFO RE THE SAME IS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2016. SD/- SD/- (RAJENDRA) (C.N. PRASAD ) / ACCOUNTANT MEMBER $ % /JUDICIAL MEMBER MUMBAI; ( DATED SEPTEMBER, 2016 . % . ./ RJ , SR. PS ITA NO. 7317/M/2014 C.O. NO. 91/M/2016 9 !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI