ACIT CEN CIR 2, THANE V. SHRIDHAR CHANGU THAKUR, PANVEL

ITA 769/MUM/2011

• Counselvise Citation: 76919914 RSA 2011
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 30-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Assessee Lawyers: D R JAKHOTIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 767, 768 & 769/MUM/2011 (ASSESSMENT YEARS: 2003-04, 2007-08 & 2008-09) ACIT, CENTRAL CIRCLE SHRI SHRIDHAR CHANGU THAKUR THANE PAWAR INDL. ESTATE SHIVAJI NAGAR, VILL. GAVH AN EDULJI ROAD, CHARAI VS. PANVEL 410026 THANE 400061 PAN - AAGPT7925D APPELLANT RESPONDENT APPELLANT BY: SHRI K.C.P. PATNAIK RESPONDENT BY: SHRI D.R. JAKHOTIA DATE OF HEARING: 30.09.2013 DATE OF PRONOUNCEMENT: 30.09.2013 O R D E R PER D. MANMOHAN, V.P. THESE THREE APPEALS ARE DIRECTED AGAINST THE ORDERS PASSED BY THE CIT(A), THANE-I AND THEY PERTAIN TO ASSESSMENT YEAR S 2003-04, 2007-08 AND 2008-09. THE ISSUE INVOLVED IN ALL THE THREE APPEAL S BEING IDENTICAL, AS CONTENDED BY THE LEARNED D.R., WE PROCEED TO DISPOS E OF THESE APPEALS BY A COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. ADDITION OF ` 10,50,000/-/14,00,000/18,00,000/- FOR THE RESPECTIV E YEARS UNDER CONSIDERATION HAVING BEEN DELETED BY TH E LEARNED CIT(A) IT WAS CONTENDED ON BEHALF OF THE REVENUE THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION WITHOUT GIVING THE AO AN O PPORTUNITY. IN OTHER WORDS, THE ORDERS PASSED BY THE LEARNED CIT(A) WERE IN VIOLATION OF THE PROCEDURE PRESCRIBED UNDER SECTION 46A OF THE ACT. THE LEARNED CIT(A) DELETED THE ADDITION BY OBSERVING, IN THE APPEAL FO R A.Y. 2003-04, AS UNDER: - 4. IN GROUND NO. 2, THE ADDITION OF RS.10.50,000/- IS CONTESTED. THE AO FOUND THE CLOSING BALANCE IN THE CAPITAL ACC OUNT OF THE APPELLANT APPEARING IN THE BOOKS OF M/S. SC THAKUR & BROS TO STAND AT RS.37,51,472/- AND FOUND AN INVESTMENT OF RS.8,38,1 79/- TO HAVE BEEN MADE DURING THE YEAR. CONSIDERING THE CAPACITY TO INVEST AND THE ITA NO. 767, 768 & 769/MUM/2011 SHRI SHRIDHAR CHANGU THAKUR 2 LIFE STYLE AND STANDARD LIVING OF THE APPELLANT, TH E AO CHOSE TO ESTIMATE THE INCOME AT RS.10,50,000/- AND BROUGHT TO TAX THE SAME. 4.1 THE SUBMISSION MADE TO ME IN THIS CONNECTION BY THE AIR IS THAT, THERE IS NO FRESH CAPITAL INTRODUCED DURING T HE YEAR IN THE BOOKS OF M/S SC THAKUR & BROS AND THE INCREASE IN CAPITAL AC COUNT OF RS.24,43,476/- REPRESENTS ASSESSEES PROFITS OF THE YEAR CREDITED TO THE CAPITAL ACCOUNT. THE SUBMISSION IS CONSIDERED AND T HE ARGUMENT IS HEARD. A COPY OF THE CAPITAL ACCOUNT OF THE APPELLA NT APPEARING IN THE BOOKS OF THE PARTNERSHIP FIRM, M/S SC THAKUR & BROS IS ALSO FURNISHED TO ME FOR MY PERUSAL. 4.2 FROM THE COPY OF CAPITAL ACCOUNT, I FIND A SUM OF RS.24,43,476/- TO BE CREDITED ON 31.03,04, WHICH RE PRESENTS SHARE OF PROFIT FROM THE FIRM OF THE YEAR UNDER APPEAL. I AL SO FIND, A TOTAL DRAWINGS OF RS.16,05,298/- APPEARING IN THE SAME CA PITAL ACCOUNT. THE AO HAS TAKEN THE CREDIT NET OF DRAWINGS AS CAPI TAL INTRODUCTION DURING THE YEAR, WHICH IS FACTUALLY WRONG. IT IS AL SO EXPLAINED TO ME THAT, THE APPELLANT HAS NOT RECEIVED REMUNERATION O R INTEREST FROM THE PARTNERSHIP FIRM AND IT IS FURTHER STATED THAT, THE HOUSEHOLD EXPENSES HAVE BEEN MADE OUT OF INCOME FROM AGRICULTURAL LAND S BELONGING TO THE FAMILY. 4.3 IN MY VIEW, ESTIMATION OF INCOME ON THE BASIS O F BALANCE IN CAPITAL ACCOUNT IS UNWARRANTED AND UNJUSTIFIED. THE AO HAS FAILED TO ESTABLISH THAT, THE APPELLANT EARNED INCOME LIABLE TO TAX. IN THE CIRCUMSTANCES, I HOLD THAT, ESTIMATION OF INCOME ON THE BASIS OF BALANCE IN CAPITAL ACCOUNTS IN THE BOOKS OF THE FIR M IS IN CONTRADICTION WITH THE PROVISIONS OF THE ACT. ACCOR DINGLY, I DIRECT THE AO TO DELETE THE ADDITION. THE GROUND IS THUS ALLOWED. FOR IDENTICAL REASON, IN THE OTHER TWO YEARS ALSO T HE ADDITION WAS SET ASIDE BY THE LEARNED CIT(A). 3. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US A COPY OF THE ORDER PASSED BY THE ITAT E BENCH MUMBAI IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004-05 & 2005-06 (ITA NO. 9181 & 9182/MUM/2010) TO SUBMIT THAT IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY DISMISSING THE APPEALS FILED BY THE REVENUE. THE CASE OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT THE AO CH OSE TO MAKE AN ADDITION ON THE PREMISE THAT THERE WAS SOME FRESH CAPITAL IN THE CAPITAL ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S. SC THAKUR AND BOR S. ON THE BASIS OF THE CAPITAL ACCOUNT, WHICH WAS AVAILABLE WITH THE AO, T HE LEARNED CIT(A) CONCLUDED THAT THERE IS NO CASE FOR MAKING ADDITION . THE APPELLATE TRIBUNAL OBSERVED THAT SINCE NO FRESH MATERIAL WAS TAKEN ON RECORD, THE ORDER PASSED ITA NO. 767, 768 & 769/MUM/2011 SHRI SHRIDHAR CHANGU THAKUR 3 BY THE LEARNED CIT(A) IS NOT IN VIOLATION OF RULE 4 6A. ADMITTEDLY IN THE YEAR UNDER CONSIDERATION ALSO THE FACTS ARE IDENTICAL. T HEREFORE, BY RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE ITAT E BENCH MUMB AI IN ASSESSEES OWN CASE (SUPRA) WE UPHOLD THE ORDERS PASSED BY THE LEA RNED CIT(A) AND DISMISS THE APPEALS FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2013. SD/- SD/- (RAJENDRA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 30 TH SEPTEMBER, 2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) I, THANE 4. THE CIT CENTRAL, PUNE 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.