SHREE LAXMI DEVELOPERS, MUMBAI V. ITO WD 26(3)(2)(NEW), MUMBAI

ITA 7459/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8133 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2014
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Opportunity of being heard
• Section: 143(3); 131

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, J UDICIAL M EMBER , A ND SHRI N.K. PRADHAN , A CCOUNTANT M EMBER ITA NO . 7459 /MUM/20 14 ASSESSMENT YEAR: 2010 - 11 M/S SHREE LAXMI DEVELOPERS, 407, GATEWAY PLAZA, HIRANANDANI GARDENS POWAI, MUMBAI - 400076 / VS. INCOME TAX OFFICER, WARD - 26(3) - 2, PRATYAKSHAKAR BHAVAN, BANDRA KURL A COMPLEX, BANDRA (EAST), MUMBAI - 400051 ( /ASSESSEE) ( / REVENUE) P.A. NO. ABEFS7370Q / ASSESSEE BY DR. K. SHIVRAM & SHRI RAHUL HAKANI / REVENUE BY SHRI B.S. BIST - DR / DATE OF HEARING : 21 /02 /201 7 / DATE OF ORDER : 08 /0 3 /2017 SHREE LAXMI DEVELOPERS ITA NO. 7459/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 21/10/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI . GROUND NO. 1 & 2 , RAISED BY THE ASSESSEE PERTAINS TO CONFIRMING THE ADDITION OF LOANS OF RS.6 LAKH AND INTEREST AMOUNTING TO RS.28,997/ - , THEREUPON, WITHOUT PROPER VERIFICATION OF FACTS AND COGENT REASONS, MORE SPECIFICALLY, WHEN THE PARTIES FROM WHOM THE LOAN WAS TAKEN HAS DULY CONFIRMED AND SUPPORTED BY AN AFFIDAVIT. THE LD. COUNSEL FOR THE ASSESSEE, DR. K. SHIVRAM ALONG WITH SHRI RAHUL HAKANI INVITED OUR ATTENTION TO PAGE - 3 (PARA - 5) AND PARA - 5.2 OF THE IMPUGNED ORDER. ON THE OTHER HAND, THE LD. DR, SHRI B.S. BIST, STR ONGLY DEFENDED THE ADDITION BY EXPLAINING THAT THESE PERSONS DID NOT APPEAR BEFORE THE ASSESSING OFFICER, THEREFORE, THE GENUINENESS OF LOAN COULD NOT BE ESTABLISHED. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND IS IN THE BUSINESS OF REAL ESTATE AS CONTRACTOR /DEVELOPER. THE ASSESSEE DECLARED INCOME OF RS.7,81,556/ - IN ITS RETURN FILED ON 29/09/2010. THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT ON 28/03/2013 AT RS.53,29,395/ - . IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS SHOWN UNSECURED LOANS TO THE TUNE OF RS.5,39,47,092/ - . THE ASSESSEE WAS ASKED TO FURNISH THE NAM E AND ADDRESSES OF THE LENDERS ALONG WITH SHREE LAXMI DEVELOPERS ITA NO. 7459/MUM/2014 3 SUPPORTING EVIDE NCE TO PROVE THE IDENTITY AND CAPACITY OF THE LENDERS ALONG WITH COPY OF RETURN OF INCOME TAX, PROFIT AND LOSS ACCOUNT, BALANCE SHEET, BANK STATEMENT ETC. THE ASSESSEE FURNISHED THE CONFIRMATION AND OTHER DETAILS. HOWEVER, ON PERUSAL OF BANK STATEMENT OF TWO LENDERS NAMELY JOSHANABEN H SHAH AND MANJIBHAI P PATEL (RS. 3 LAKH EACH). SUMMONS U/S 131 OF THE ACT WERE ISSUED TO THESE PARTIES WHICH WERE RETURNED BY THE P OSTAL AUTHORITIES. THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE. THE ASSESSEE DID NOT FILED ANY REPLY BEFORE THE ASSESSING OFFICER TILL THE FINALIZATION OF ASSESSMENT. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT SUFFICIENT TIME WAS NOT PROVIDED TO THE ASSESSEE. CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTANCES NARRATED BE FORE US, WE DIRECT THE ASSESSEE TO PRODUCE BOTH THESE PARTIES I.E. JOSHANABEN H SHAH AND MANJIBHAI P PATEL BEFORE THE ASSESSING OFFICER WITHIN ONE MONTH FROM THE RECEIPT OF THIS ORDER. THE LD. ASSESSING OFFICER IS DIRECTED TO EXAMINE BOTH THE PARTIES TO HI S SATISFACTION WITH RESPECT TO IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. THE ASSESSEE MAY BE GIVEN OPPORTUNITY TO CROSS EXAMINE THEM, IF SO DESIRED BY THE ASSESSEE. THUS, THE IMPUGNED GROUND IS ALLOWED FOR STATISTICAL PURPOSES ONLY. 3. IDENTICALLY, THE NEXT GROUND ESTIMATING NET PROFIT OF RS.50,32,743/ - (RS.28,73,874/ - FROM ZOOM PLAZA AND RS.21,58,869/ - FROM AURUM PARK) AS AGAINST RS.28,73,874/ - DECLARED BY THE ASSESSEE IS CONCERNED, THE CRUX OF ARGUMENT ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE HAD ADOPTED SHREE LAXMI DEVELOPERS ITA NO. 7459/MUM/2014 4 PROJECT COMPLETION METHOD FOR THE PROJECT NAMELY AURUM PARK WHICH IS THE OWN PROJECT O F THE ASSESSEE. THESE FACTS WERE CLAIMED TO BE DISCLOSED IN THE NOTES OF ACCOUNTS ANNEXED WITH TAX AUDIT REPORT FILED WITH THE ASSESSING OFFI CER. IT WAS CONTENDED THAT PROPER OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE. HOWEVER, THE LD. DR, DEFENDED THE ADDITION. 3.1. CONSIDERING THE TOTALITY OF FACTS AND THE FACTUAL MATRIX NARRATED BEFORE US, WE ARE OF THE VIEW THAT NO PERSON SHOULD BE COND EMNED UNHEARD, THEREFORE, THE LD. ASSESSING OFFICER IS DIRECTED TO EXAMINE THE FACTUAL MATRIX AND AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, TO SUBSTANTIATE ITS CLAIM, ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. THUS, THIS GROUND OF T HE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 4. THE NEXT GROUND I.E. GROUND NO. 5 & 6 PERTAINS TO CONFIRMING ADDITION OF RS.15,17,873/ - , BEING PURCHASES MADE FROM M/S MET FORUM CORPORATION. THE CRUX OF ARGUMENT ON BEHALF OF THE ASSESSEE IS THAT IN RESPONSE TO SUMMONS U/S 131 DATED 13/05/2014, ISSUED BY THE ASSESSING OFFICER, M/S MET FORUM CORPORATION DULY SUBMITTED THE LEDGER ACCOUNT, DULY SIGNED BY THEM, CONFIRMING THE SALES MADE BY THEM. HOWEVER, THE LD. DR, DEFENDED THE ADDITION. IT WAS ALSO E XPLAINED THAT DURING APPELLATE PROCEEDINGS THE ASSESSEE FILED THE COPY OF BILLS, DEBIT NOTE, DELIVERY CHALLANS, TRANSPORT RECEIPT AND TDS CERTIFICATE OF M/S MET FORUM CORPORATION IN SUPPORT OF ITS CLAIM. THE CRUX OF THE ARGUMENT ON BEHALF OF THE ASSESSEE IS SHREE LAXMI DEVELOPERS ITA NO. 7459/MUM/2014 5 THAT NEITHER THE DOCUMENTARY EVIDENCE S WERE CONSIDERED PROPERLY NOR PROPER OPPORTUNITY WAS PROVIDED TO THE ASSESSEE. CONSIDERING THE TOTALITY OF FACTS, WE REMAND THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE FACTUAL MATRIX AND THEN DEC IDE IN ACCORDANCE WITH LAW. EVEN OTHERWISE, AS PER ARTICLE - 265 OF THE CONSTITUTION OF INDIA ONLY DUE TAXES HAS TO BE LEVIED/COLLECTED. DUE OPPORTUNITY BE PROVIDED TO THE ASSESSEE WITH FURTHER LIBERTY TO SUBSTANTIATE ITS CLAIM. THUS, THIS GROUND OF THE ASSE SSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 5. GROUND NO. 7 IS GENERAL IN NATURE, THEREFORE, REQUIRES NO DELIBERATION. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. T HIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESEN CE OF LD. REPRESENTATIVES FROM BOTH SIDES AT T H E CONCLUSION OF THE HEARING ON 21 /02/2017 . S D/ - SD/ - ( N.K. PRADHAN ) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 08/03 /2017 SHEKHAR, P.S / / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A) - , MUMBAI SHREE LAXMI DEVELOPERS ITA NO. 7459/MUM/2014 6 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MU MBA I,