ITO 14(1)(3), MUMBAI V. ROHIT M. UDANI (HUF), MUMBAI

ITA 7439/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2132 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V JHAVERI
• Assessee Lawyers: LOVE KUMAR
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence; Tangible material
• Section: 143(3); 69; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , ! , ' , # BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I.T.A. NO.7439/M/13 ( / ASSESSMENT YEAR: 2001-02) INCOME TAX OFFICER- 14(1)(3) 2 ND FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI 400021 / VS. ROHIT M. UDHANI (HUF) 321, D-8, DIVA NIKETAN, DR. AMBEDKAR ROAD, MATUNGA(CR), MUMBAI-400019 % ./ & ./ PAN/GIR NO. : AAHHR6771C ( %' / APPELLANT ) .. ( ()%' / RESPONDENT ) ASSESSEE BY: SHRI LOVE KUMAR DEPARTMENT BY: SHRI B. V. JHAVERI * / DATE OF HEARING: 31.08.2015 +,- * /DATE OF PRONOUNCEMENT: 30.11.2015 . / O R D E R PER AMARJIT SINGH, JM: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T ORDER DATED 27.09.2013 OF THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS)-25, MUMBAI [HEREINAFTER REFERRED TO AS THE LEARNED CIT(A)] R ELEVANT TO THE ASSESSMENT YEAR 2001-02. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE IS A HUF ENGAGED IN THE BUSINESS OF BROKERAGE IN FINANCE, SUB-BROKERAGE IN SMALL SAVINGS, BADLA IN SHARES ETC. THE RETURN OF INCOME DECLARING TOTAL I NCOME OF RS.2,68,817/- WAS FILED ON 29.03.2004. ON THE BASIS OF COMPLAINTS (T AX EVASION PETITIONS) ITA NO.7439/M/13 ASSESSMENT YEAR: 2001-02 2 RECEIVED FROM DIT(I), MUMBAI AND SHRI SANJAYBHAI SH AH, THE CASE WAS REOPENED. IT WAS STATED THAT, THE ASSESSEE HAD AL LEGED TO HAVE GIVEN CASH LOAN EXCEEDING RS.20,000/- TO VARIOUS COMPANIES/CONCERNS TO THE TUNE OF RS. 50.50 LAKHS. THE SAID COMPANIES/CONCERNS WERE REPRESENTE D BY THE COMPLAINANT SHRI SANJAYBHAI SHAH, WHO DENIED HAVING RECEIVED SUCH LO ANS FROM THE ASSESSEE IN CASH. IN THE ASSESSMENT ORDER U/S 143(3) R.W.S. 147 DATED 30.12.2008, THE AO MADE ADDITIONS OF (I) UNEXPLAINED ADVANCE TO SHREE RUBBER INDUSTRIES OF RS.10,00,000/-, UNEXPLAINED ADVANCE TO SHREE AMBICA RUBBER CO. OF RS.10,00,000/-, UNEXPLAINED INVESTMENT U/S 69 BEING CASH LOAN TO SHREE BHAGWATI TRADING CO. OF RS. 7,00,000/-, (II) UNEXP LAINED INTEREST OF RS.2,85,553/-, AND (III) UNEXPLAINED FINANCIAL CHA RGES OF RS.1,65,000/-. 3. SUBSEQUENTLY, THE APPELLANT FILED THE APPEAL BEA RING NO. CIT(A)-25/IT- 208/14(1)(3)/08-09 ON 15.01.2009. DURING THE APPEL LANT PROCEEDINGS, THE APPELLANT FILED ADDITIONAL EVIDENCE U/S 46A, FOR WH ICH REMAND REPORT WAS CALLED FROM THE A.O. THE A.O. SUBMITTED HIS REMAND REPORT DATED 23.12.2009, WHICH IN TURN WAS FORWARDED TO THE APPELLANT FOR COMMENTS . THEREAFTER, THE LEARNED CIT(A)25, MUMBAI, ALLOWED THE APPEAL IN PART VIDE O RDER DATED 12.02.2010. HOWEVER, THE APPELLANT PREFERRED FURTHER APPEAL BEF ORE THE ITAT, MUMBAI WITH THE PLEA THAT NO PROPER AND SUFFICIENT OPPORTUNITY WAS GIVEN. THE HONBLE ITAT, D BENCH, MUMBAI, VIDE ITS ORDER DATED 27.0 4.2011 SET ASIDE THE SAID ORDER OF CIT(A)25 DATED 12.02.2010 BY VIRTUE OF ORD ER DATED 27.04.2011 AND DIRECTED THE CIT(A) TO PASS THE ORDER A FRESH BY GI VING PROPER AND SUFFIECIENT OPPORTUNITY OF BEING HEARD. 4. SUBSEQUENTLY, THE LEARNED CIT(A)25 CONSIDERED TH E MATTER AND PASS THE ORDER AFRESH BY VIRTUE OF ORDER DATED 27.04.2011 AN D THE LEARNED CIT(A) DID NOT SUSTAIN THE ADDITION OF AN AMOUNT OF RS.27,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69. FEELING AGGRIEVED THE REVENUE H AS FILED THE APPEAL. THE REVENUE HAS PLEADED THAT THE INVESTMENT TO THE TUNE OF RS.27,00,000/- HAS NOT ITA NO.7439/M/13 ASSESSMENT YEAR: 2001-02 3 BEEN PERFECTLY EXPLAINED, THEREFORE, THE CASE IS W ITHIN THE PURVIEW OF SECTION 69 AND THE UNEXPLAINED AMOUNT TO THE TUNE OF RS.27,00, 000/- IS LIABLE TO BE ADDED TOWARDS THE TOTAL INCOME OF THE ASSESSEE. 5. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORDS CAREF ULLY. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS ARGUED THAT THE ADV ANCES/LOANS TO THE TUNE OF RS.10,00,000/-TO SHREE RUBBER INDUSTRIES AND RS.10, 00,000/- TO SHREE AMBICA RUBBER CO. AND RS.7,00,000/- TO SHREE BHAGWATI TRAD ING CO. HAVE NOT BEEN PROPERLY EXPLAINED BY THE ASSESSEE, THEREFORE, THE SAID AMOUNT TO THE TUNE OF RS.27,00,000/- IS THE UNEXPLAINED INVESTMENT U/S. 6 9 OF THE ACT, THEREFORE, THE SAME IS LIABLE TO BE ADDED TOWARDS THE INCOME OF TH E ASSESSEE IN ACCORDANCE WITH LAW WHICH HAS WRONGLY BEEN DELETED BY THE CIT( A), HENCE, THE ORDER DATED 27.09.2013 IS WRONG AND IS LIABLE TO BE SET ASIDE. 6. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS REFUTED THE SAID CONTENTIONS. INITIALLY, THE ASSESSEE FILE D THE RETURN ON 29.03.2004. THE MATTER WAS TAKEN UP THE ASSESSING OFFICER ON THE CO MPLAINT OF ONE SHRI SANJAYBHAI SHAH. THE ASSESSMENT WAS FINALISED BY H OLDING THE UNEXPLAINED INVESTMENT U/S 69 OF THE ACT TO THE TUNE OF RS.27,0 0,000/-. THE ASSESSEE PREFERRED THE APPEAL BEFORE THE CIT(A)25 AND THE LE ARNED CIT(A) PARTLY ALLOWED THE APPEAL BY VIRTUE OF ORDER DATED 12.02.2010. TH E ASSESSEE PREFERRED THE APPEAL BEFORE ITAT, MUMBAI AND ITAT, MUMBAI DIRECTE D THE CIT(A) TO RECONSIDER THE MATTER AFTER GIVING AN OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 7. THE LEARNED CIT(A) ARRIVED AT THIS CONCLUSION TH AT THE ASSESSEE HAS GIVEN THE GENUINE LOAN TO THE TUNE OF RS.10,00,000/- TO S HREE RUBBER INDUSTRIES AND RS.10,00,000/- TO SHREE AMBICA RUBBER CO. AND RS.7, 00,000/- TO SHREE BHAGWATI TRADING CO. TOTAL TO THE TUNE OF RS.27,00, 000/- AND ACCORDINGLY, DELETED THE UNEXPLAINED ADVANCES/INVESTMENT TO THE TUNE OF RS.27,00,000/-. ITA NO.7439/M/13 ASSESSMENT YEAR: 2001-02 4 8. HOWEVER REVENUE WAS NOT SATISFIED AND FILED THE PRESENT APPEAL. ON APPRAISAL OF ASSESSMENT ORDER IT IS OBSERVED THAT T HE LEARNED A.O. TREATED THE SAID AMOUNT AS EXPLAINED IN VIEW OF THE STATEMENT O F ONE SHRI SANJAYBHAI SHAH. SHRI. SANJAYBHAI SHAH DENIED TO HAVE RECEIVED THE L OAN FROM THE ASSESSEE. THE ASSESSEE FILED COPY OF ORDER DATED 19.01.2011 PASSE D BY THE HONBLE COURT OF METROPOLITAN MAGISTRATE, 14 TH COURT, GIRGAUM, MUMBAI, (C.C.NO.6166/SS/2005). THE TRIAL COURT HAS CONVICTE D THE ACCUSED MR. SANJAYBHAI SHAH FOR OFFENCE PUNISHABLE U/S 138 OF T HE NEGOTIABLE INSTRUMENTS ACT, 1881. THE SAID ORDER WAS CONFIRMED BY THE HON BLE BOMBAY HIGH COURT BY VIRTUE OF JUDGEMENT DATED 12.03.2013. IN THE SA ID CASE MR. SANJAYBHAI SHAH TOOK THE PLEA OF NO ADVANCES TO HIM WHICH WAS DECLI NED BY THE TRIAL COURT AS WELL AS THE HONBLE BOMBAY HIGH COURT. IN VIEW OF T HE SAID JUDGEMENT APPARENTLY, THE ASSESSEE HAS GENUINELY ADVANCED THE LOAN TO HIM WHICH HAS BEEN REFLECTED IN THE BALANCE SHEET SUBMITTED BY HIM. 9. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE H AS SHOWN LOAN OF RS.24,00,000/- ADVANCED TO SHREE RUBBER INDUSTRIES WHICH CONSISTS TO RS.10,00,000/- CASH LOAN IN FINANCIAL YEAR 2000-01 ADDED TO TOTAL INCOME. THE APPELLANT HAS SHOWN LOAN OF RS.15,00,000/- ADVANCE TO SHREE AMBICA RUBBER CO. WHICH CONSISTS RS.10,00,000/- CASH LOAN IN FINA NCIAL YEAR, CASH LOAN OF RS.7,00,000/- TO SHREE BHAGWATI TRADING CO. HAS NOT BEEN REFLECTED IN THE BALANCE SHEET BECAUSE THE CHEQUE DATED 20.03.2001 W AS CREDITED IN THE ACCOUNT OF THE COMPANY HAD BEEN DISHONOURED. THE TRANSACTI ON APPEARED IN THE BANK STATEMENT OF THE ASSESSEE AND HAS ALSO BEEN SHOWN THE CASH LOAN IN HIS BOOKS OF ACCOUNT AND NOTHING IS UNEXPLAINED. SIMPLE STATEME NT OF SHRI. SANJAYBHAI SHAH IS NOT SUFFICIENT TO ARRIVE AT THIS CONCLUSION THAT HE HAS NOT TAKEN THE LOAN FROM THE ASSESSEE UNLESS HIS STATEMENT IS SUPPORTED BY ANY TANGIBLE MATERIAL ON RECORD. THE ASSESSEE HAS SHOWN THE SAID CASH LOANS IN THE BOOKS OF ACCOUNT. THEREFORE, IN THE SAID CIRCUMSTANCES APPARENTLY THE SAID LOAN AND ADVANCES IS ITA NO.7439/M/13 ASSESSMENT YEAR: 2001-02 5 NOT UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. MORE OVER, AT THE TIME OF ARGUMENT NOTHING NEW MATERIAL BROUGHT IN TO THE NOT ICE BEFORE THE TRIBUNAL TO WHICH IT CAN BE ASSUMED THAT THE ASSESSEE DID NOT G IVE ANY LOAN AND ADVANCES TO THE SAID COMPANIES. THEREFORE, IN THE ABOVE SAID C IRCUMSTANCE THIS IS CLEAR THAT THE LEARNED CIT(A) HAS RIGHTLY PASS THE ORDER UNDER APPEAL WHICH DOES NOT REQUIRE ANY INTERFERENCE AT THIS STAGE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS HER EBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER ' /JUDICIAL MEMBER MUMBAI; 0 DATED : 30 TH NOVEMBER, 2015 MP MP MP MP / COPY OF THE ORDER FORWARDED TO : 1. %' / THE APPELLANT 2. ()%' / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. 234 ('' , , / DR, ITAT, MUMBAI 6. 4 5 6 / GUARD FILE. / BY ORDER, )2 (' //TRUE COPY// / !' (DY./ASSTT. REGISTRAR) '# $ , / ITAT, MUMBAI