BOMBAY TELECOM, MUMBAI V. ITO 24(2)(4), MUMBAI

ITA 7540/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9147 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Assessee Lawyers: N R AGRAWAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMB AI - F BENCH , , BEFORE S/SH. I P BANSAL,JUDICIAL ME MBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.7540/MUM/2012, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2008-09 M/S BOMBAY TELECOM, B-105, RADHAKUNJ, NIVETIA ROAD, MALAD EAST, MUMBAI-400097 PAN:AAIFB0600R VS ITO 24(2)(4), MUMBAI. ( #$ / ASSESSEE) ( %&#$ / RESPONDENT) !'( !'( !'( !'( ) ) ) ) /ASSESSEE BY :SHRI N.R. AGRAWAL * ) / REVENUE BY :SHRI PAWAN KUMAR BEERLA ! ! ! ! * ** * (+ (+ (+ (+ / DATE OF HEARING : 25 - 03 -2015 ,-' * (+ / DATE OF PRONOUNCEMENT : 25 -03-2015 ! ! ! ! , 1961 * ** * 254(1) (.( (.( (.( (.( / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. ! : CHALLENGING THE ORDER DT.16.10.2012 OF THE CIT(A)-3 4,MUMBAI, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: GROUND NO. 1 THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED A.O. FOR RS 10,40,000/-. GROUND NO.2 THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED AO FOR RS 9,00,000/- U/S 68 ON ACCOUNT OF CASH CREDIT GROUND NO.3 THE LEARNED CIT(A) ERRED IN NOT ADMITTING NEW EVID ENCE SUBMITTED TO CIT(A). GROUND NO.4 THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED AO FOR RS. 45000/- WHICH WAS OUTSTANDING EXPENSES, AS UNEXPLAINED CASH CREDIT. GROUND NO.5 THE LEARNED CIT ( APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED AO FOR RS.5,10,000/-ON ACCOUNT OF THE NON RECONCILI ATION OF THE DIFFERENCE OF THE FIGURES OF PURCHASE (12,51,55,911 -12,46,45,660) GROUND NO.6 THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED AO FOR RS 10,85,830/- WHICH WAS ON ACCOUNT OF DISCO UNT ON COMMISSION RECEIVED. GROUND NO.7 THE LEARNED A.O. ERRED IN NOT GRANTING TDS CREDIT OF RS. 6,76,603/- (RS. 7,97,634/- LESS GRANTED BY A.O. RS. 1,21,031/- DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE(AR) OF THE ASSESSEE DID NOT PRESS GROUND NO.7,HENCE,IT STANDS DISMISSED . VIDE APPLICATION,DATED 05.05.2014,THE ASSESSEE HAD FILED ADDITIONAL EVIDENCE AND MADE A REQUEST TO ADMIT THE SAME.IT WAS SUBMITTED THAT THE PAPER BOOK CONTAINED THE AFFIDAVIT OF THE CA WHO HAD REPRESENTED THE CASE OF THE ASSESSEE BEF ORE THE AO,THAT THE AFFIDAVIT HIGHLIGHTED THE CIRCUMSTANCES OF NON FILING OF DETAILS.IT WAS C LARIFIED THAT THAT THE BENCH HAD NOT DIRECTED THE ASSESSEE TO FILE AFFIDAVITS.IN THE AFFIDAVIT OF THE ASSESSEE IT WAS STATED THAT BECAUSE OF THE FIGHT BETWEEN THE AO AND THE AR CERTAIN DOCUMENTS C OULD NOT BE PRODUCED DURING THE ASSESSMENT, THAT ONE OF THE PARTNERS HAD APPEARED B EFORE THE FIRST APPELLATE AUTHORITY (FAA),THAT HE WAS NOT AWARE OF THE TECHNICALITIES O F THE ACT,THAT HE COULD NOT PRODUCE THE PAPERS BEFORE THE FAA AS PER THE PROVISIONS OF RUL E 46A OF THE INCOME-TAX RULES, 1962 (RULES).DEPARTMENTAL REPRESENTATIVE(DR)LEFT THE ISS UE OF ADMISSION OF ADDITIONAL EVIDENCE TO THE DISCRETION OF THE BENCH. 2 ITA NO.7540/M/12 M/S BOMBAY TELECOM WE HAVE PERUSED THE MATERIAL ON RECORD.IT IS A FACT THAT THE ASSESSEE HAD FILED DETAILS BEFORE THE FAA AND HE DID NOT ADMIT THE SAME INVOKING THE PROVISIONS OF RULE 46A,THAT BEFORE THE FAA NO PROFESSIONAL HAD APPEARED TO REPRESENT THE C ASE OF THE ASSESSEE.IF THE MATERIAL PRODUCED BY THE ASSESSEE IS CONSIDERED IT BECOMES C LEAR THAT IT WOULD HAVE BEARING EFFECT ON OUTCOME OF THE APPEAL.IT IS SAID THAT INCOME-TAX PR OCEEDINGS ARE NOT STRICTLY SPEAKING ADVERSARIAL IN NATURE AND THE INTENTION OF THE REVENUE IS BE TO TAX THE REAL INCOME.FOR ARRIVING AT REAL INCOME,IF SOME DOCUMENTS CAN THROW LIGHT,THEN IN OU R OPINION,SAME HAVE TO BE CONSIDERED.IT IS TRUE THAT THE BEST EVIDENCES SHOULD BE PRODUCED AT THE FIRST AVAILABLE OPPORTUNITY AND NO ASSESSEE CAN,AS A RIGHT,CLAIM THAT IT SHOULD BE ALLOWED TO P RODUCE THE NEW EVIDENCE.IT DEPENDS UPON THE PECULIAR FACTS OF THE CASE.CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE MATTER WE ARE ADMITTING THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE . ASSESSEE-FIRM,ENGAGED IN THE BUSINESS OF SALE OF TE LECOME PRODUCTS HAD FILED ITS RETURN OF INCOME ON 28.09.2008 DECLARING TOTAL INCOME AT RS.3.40 LAK HS.THE ASSESSING OFFICER(AO)COMPLETED THE ASSESSMENT U/S.143(3) OF THE ON 30.12.10 DETERM INING ITS INCOME AT RS.36,99,470/-. 2 .FIRST GROUND IS ABOUT ADDITION OF RS. 10.40 LAKHS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE FIRM WAS INCORPORATED ON 10.0 5.2007, THAT IT HAD TWO PARTNERS NAMELY SANDEEP JAIPURIA AND SANJAY HIMMATRAM, THAT IN THE ACCOUNTS THE ASSESSEE HAD SHOWN CAPITAL OF RS.10.40 LAKHS(SANDEEP JAIPURIARS.4.90 LAKHS+SANJAY HIMMATRAM5.5.0LAKHS)FROM ITS PARTNERS. HE DIRECTED THE ASSESSEE TO FURNISH THE COMPLETE DE TAILS OF COMPLETE ADDRESS OF THE PARTNERS,PAN, COPIES OF RETURNS OF INCOME, COPY OF BANK STATEMENT IN RESPECT OF INTRODUCTION OF THE CAPITAL IN QUESTION. AS THE ASSESSEE DID NOT FILE ANY DETAIL, SO THE AO HELD THAT CAPITAL SHOWN IN THE NAMES OF THE PARTNERS REMAINED UNEXPLAINED. ACCORDINGLY, CAP ITAL OF RS. 10.40 LAKHS WAS CONSIDERED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. NEXT GROUND IS ABOUT LOAN OF RS. 9 LAKHS.DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD SHOWN RECEIPT OF LOA N OF RS. 9 LAKHS FROM M/S INTERLINK.HE DIRECTED THE ASSESSEE TO FURNISH THE LOAN CONFIRMAT ION COPY OF RETURN ALONG WITH THE COPY OF BANK STATEMENT.AS PER THE AO THE ASSESSEE DID NOT F ILE ANY EXPLANATION.VIDE HIS NOTICE DATED 16.12.2010,THE AO SPECIFICALLY ASKED THE ASSESSEE A S TO WHY THE UNSECURED LOAN OF RS.9LAKHS SHOWN IN THE NAME OF M/S INTERLINK SHOULD NOT BE TR EATED UNEXPLAINED CASH CREDIT.THE AO HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE CRED ITWORTHINESS OF THE LENDER AND GENUINENESS OF THE TRANSACTION.AS A RESULT,HE HELD THAT LOAN SH OWN IN THE NAME OF M/S INTERLINK REMAINED UNEXPLAINED,THAT SAME WAS TO BE CONSIDERED AND UNEX PLAINED CASH CREDIT U/S.68 OF THE ACT. 4. NON ADMISSION OF ADDITIONAL EVIDENCE IS THE SUBJECT MATTER OF GROUND NO.3.THE ASSESSEE HAD PRODUCED NEW EVIDENCE IN ITS SUPPORT DURING THE APP ELLATE PROCEEDINGS. 5. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA. BEFORE HIM,CAPITAL ACCOUNT OF BOTH THE PARTNERS WERE PRODU CED ALONG WITH THE COPY OF THE BALANCE- SHEETS. IT WAS CONTENDED BEFORE HIM THAT RS.1.5 LAK HS,IN THE CASE OF SANDEEP JAIPURIA, WAS INTRODUCED AS CASH INTO THE CAPITAL ACCOUNT, THAT A SUM OF RS.1.2 LAKHS WAS REALIZED OUT OF SALE OF JEWELLERY FOR WHICH AN INVOICE WAS GIVEN BY M/S SIDDHI VINAYAK JEWELLARS,THAT RS. 1. 80 LAKHS WAS RECOVERED FROM SUNDRY DEBTORS. AS PER THE FAA DOCUMENTS WITH REGARD TO A CAPITAL ACCOUNT OF BOTH THE PARTNERS WERE PRODUCED BEFORE HIM FOR THE FIRST TIME, THAT LOAN CONFIRMATION LETTER OBTAINED FROM INTERLINK WAS ALS O NOT MADE AVAILABLE TO THE AO. HE TREATED THE DOCUMENTS PRODUCED BEFORE HIM AS ADDITIONAL EVI DENCES AND REFUSED TO ADMIT THE FRESH EVIDENCES PRODUCED BEFORE HIM,AS STATED EARLIER.HE REFERRED TO THE PROVISIONS OF SECTION 46A OF THE RULES AND REFUSED TO ADMIT THE EVIDENCES. BEFORE US,THE AR STATED THAT THE DOCUMENTS PRODUCED BY THE ASSESSEE THREW LIGHT ON THE CAPITAL CONTRIBUTION OF THE PARTNERS.IN THE EARLIER PART OF OUR ORDER,WE HAVE ADMITTED THE ADDIT -IONAL EVIDENCES.IN OUR OPINION,IN THE INTEREST OF JUSTICE THESE DOCUMENTS HAVE TO BE TAKEN IN 3 ITA NO.7540/M/12 M/S BOMBAY TELECOM TO CONSIDERATION,IF DUE TAX IS TO BE DETERMINED.THE REFORE,WE ARE REMITTING BACK GROUNDS NO.1 AND 2 TO THE FILE OF THE FAA FOR FRESH ADJUDICATIO N,WHO WOULD AFFORD A REASONABLE OPPORTUNI ITY OF HEARING TO THE ASSESSEE.BOTH THE GROUNDS ARE DECIDED IN FAVOUR OF THE ASSESSEE,IN PART. 6. GROUND NO.4 DEALS WITH ADDITION OF RS.45,000/- THE AO FOUND THAT THE ASSESSEE HAD SHOWN OUTSTANDING EXPENSES OF RS.45,000 IN THE BALANCE-SH EET AS ON 31.03.2008. HE ASKED THE ASSESSEE TO FURNISH THE DETAILS OF THE LIABILITY. A S PER THE AO THE ASSESSEE DID NOT FILE ANY EXPLANATION IN THIS REGARD.AS A RESULT,OUTSTANDING EXPENSES LIABILITY OF RS. 45,000 WAS TREATED AS UNEXPLAINED CASH CREDIT AND WAS ADDED TO TOTAL I NCOME OF THE ASSESSEE. 7. DURING THE APPELLATE PROCEEDINGS,THE ASSESSEE MADE CERTAIN SUBMISSIONS AND STATED THAT THE AMOUNT IN QUESTION WAS PAID IN SUBSEQUENT YEAR.AS P ER THE FAA,THE ASSESSEE DID NOT FILE ANY DETAIL ABOUT THE SAID AMOUNT AS TO HOW AND WHAT WAS THE NATURE OF THE EXPENDITURE AND WHY SAME WAS SHOWN PAYABLE AT THE END OF THE YEAR.HE UP HELD THE ADDITION MADE BY THE AO. 8. BEFORE US,THE AR STATED THAT PG.40TO 46 GIVE DETAIL OF THE DISPUTED AMOUNT AND THAT SAME WAS NOT CONSIDERED BY THE FAA.IN THE INTEREST OF JU STICE WE ARE REMITTING THE ISSUE OF OUTSTANDING EXPENSES TO THE FILE OF THE FAA FOR FRE SH ADJUDICATION AND DIRECT HIM TO DECIDE IT AFTER HEARING THE ASSESSEE.GROUND NO.4 IS ALLOWED,I N PART. 9. NEXT TWO GROUND ARE INTER-RELATED AND PERTAIN TO AD DITION MADE ON ACCOUNT OF NON-RECONCILI -ATION OF DIFFERENCE OF PURCHASE,AMOUNTING TO RS.5. 10 LAKHS.DURING THE COURSE OF ASSESSMENT PROCEEDINGS,THE AO VIDE HIS NOTICE,DATED 19.11.2010 ,ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE COMMISSION INCOME RECEIVED FROM M/S BHARTI AIRT EL LTD.(BAL)SHOULD NOT BE ADDED TO ITS TOTAL INCOME AS NO RECEIPT WAS REFLECTED IN THE PRO FIT & LOSS A/C. AS PER THE AO THE ASSESSEE DID NOT FILE ANY DETAIL.THEREFORE,HE CALLED FOR INF ORMATION FROM M/S BAL BY ISSUING A NOTICE U/S.133(6)OF THE ACT.AFTER GOING THROUGH THE DETAIL S HE FOUND THAT THE ASSESSEE HAD CLAIMED TO HAVE MADE PURCHASE TO THE TUNE OF RS. 12.51 CRORES, THAT BAL HAD CONFIRMED PURCHASE OF RS. 12.46 CRORES ONLY,THE AO HELD THAT THERE WAS A PURC HASE DIFFERENCE OF RS. 5.10 LAKHS,THAT THE ASSESSEE HAD NOT EXPLAINED THE PURCHASE DIFFERE NCE OF RS. 5.10 LAKHS(12.51 CRORES -12.46 CRORES)IN RESPECT OF PURCHASES SHOWN BY THE ASSESSE E FROM BAL,THAT THE DIFFERENCE OF THE SAID AMOUNT HAD TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE.HE ALSO DIRECTED THE ASSESSEE TO FURNISH DETAILS OF COMMISSION INCOME AND ASKED I T TO EXPLAIN AS TO WHY SUCH COMMISSION INCOME SHOULD NOT BE ADDED TO ITS TOTAL INCOME.THE ASSESSEE FILED ITS REPLY ON 29.12.2010 HE CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE AND HELD THAT THE ASSESSEE WAS IN RECEIPT OF DISCOUNT/COMMISSION OF RS.10.85 LAKHS, THAT IT HAD NOT SHOWN THE COMMISSION INCOME, THAT COMMISSION/DISCOUNT RECEIPT OF RS.10,85,830/-HAD TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE.THUS,AN ADDITION OF RS.15.95 LAKHS(10.85 L AKHS +5.10 LAKHS) WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. 10. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA.IT WAS SUBMITTED BEFORE HIM THAT THE DIFFERENCE WOULD NOT REMAIN IN COMMISSION ACCOUNT,IF THE RECONCILATION STATEMENT OF BAL WAS CONSIDERED.BUT,T HE FAA DID NOT ADMIT THE RECONCILIATION STATEMENT AS SAME WAS NOT MADE AVAILABLE TO THE AO. BEFOER US,THE ASSESSEE HAS FILED CERTAIN DOCUMENTS THAT ARE RELATED WITH THE BOTH THE GROUND S OF APPEAL.WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE MATTER SHOULD BE RESTORED B ACK TO THE FILE OF THE FAA FOR DECIDING BOTH THE GROUND AFTER CONSIDERING THE DOCUMENTS FILED BY THE ASSESSEE.AS THE DOCUMENTS COULD AFFECT THE FINAL OUTCOME,SO,THEY HAVE TO BE CONSIDE RED.GROUNDS NO.5 AND 6 ARE DECIDED IN FAVOUR OF THE ASSESSEE,IN PART. AS A RESULT,APPEAL FILED BY THE ASSESSEE I S ALLOWED IN PART. (0 !'( 1 2 * . /(0 3 * ( 45 . 4 ITA NO.7540/M/12 M/S BOMBAY TELECOM ORDER PRONOUNCED IN THE OPEN COURT ON 25TH,MARCH,2015. / * ,-' 6 7! 25 8 ,2015 - * . 9 SD/- SD/- ( /I P BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, 7! /DATE: 25.03.2015 SK / / / / * ** * %(: %(: %(: %(: ;:'( ;:'( ;:'( ;:'( / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT(A)/ < = , 4. THE CONCERNED CIT / < = 5. DR F BENCH, ITAT, MUMBAI / :>. %(! , . . . 6. GUARD FILE/ . &:( %( //TRUE COPY// /! / BY ORDER, ? / 4 DY./ASST. REGISTRAR , /ITAT, MUMBAI.