BHARAT P. SHAH, MUMBAI V. ASST CIT CIR 21(1), MUMBAI

ITA 7812/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93347 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 12-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RISHABH S HAH
• Keywords: Opportunity of being heard
• Section: 143(3); 133(6); 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.7812/MUM/2010 ASSESSMENT YEAR:2003-04 MR. BHARAT P. SHAH, 6, RAM VATIKA PRARTHANA SAMAJ ROAD, VILE PARLE (EAST) MUMBAI-400057 / VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-21(1), MUMBAI ( !' # /ASSESSEE) ( $ / REVENUE) P.A. NO. AAFPS1054F !' # / ASSESSEE BY SHRI RISHABH SHAH $ / REVENUE BY SHRI VINOD KUMAR - DR, % $& ' # ( / DATE OF HEARING 29/07/2015 ' # ( / DATE OF ORDER: 28/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER D ATED 02/09/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE FIRST GROUND RAISED BY THE ASSESSEE IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE ITA NO.7812/MUM/2010 , BHARAT P.SHAH 2 LD. FIRST APPELLATE AUTHORITY ERRED IN ISSUING NOTI CE U/S 148 OF THE ACT ON THE BASIS OF 3 RD PARTY STATEMENT/INFORMATION, WITHOUT ASSIGNING ANY VALID REASON. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE, SHRI RISHABH SHAH, ADVANCED HIS ARGUM ENTS, WHICH ARE IDENTICAL TO THE GROUND RAISED. ON THE OT HER HAND, THE LD. DR, SHRI VINOD KUMAR, CONTENDED THAT THE ARGUMENTS OF THE ASSESSEE ARE DEVOID OF ANY MERIT A S THE PERSON WHO TENDERED THE STATEMENT OR GAVE INFORMATI ON IS A CONNECTED PARTY. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS ENGAGED IN THE BUSINESS OF TRADING/COMMISSION AGENT UNDER THE PROP RIETARY CONCERN, NAMELY M/S SHRI PARSHWANATH TRADING COMPAN Y & M/S B.P. TRANSPORT, DECLARED INCOME OF RS.40,69,850 /- IN HIS RETURN FILED ON 17/10/2010. THE RETURNED INCOM E WAS PROCESSED U/S 143(1) ACCEPTING THE RETURNED INCOME ON 28/02/2004. LATER ON, THE CASE OF THE ASSESSEE WAS REOPENED WITH THE ISSUANCE OF NOTICE 148 OF THE ACT ON 21/11/2008. THE ASSESSING OFFICER FRAMED THE ASSES SMENT U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT ON 30/1 1/2009 ASSESSING THE INCOME AT RS.43,65,350/- AGAINST THE RETURNED INCOME OF RS.40,69,850/- BY MAKING DISALLO WANCE OF COMMISSION OF RS.2,95,500/- PAID TO ONE SHRI BHA GWAN H. PRAJAPATI. WE FIND THAT TO VERIFY THE GENUINENE SS OF THE STATEMENT OF SHRI BHAGWAN H. PRAJAPATI LETTER DATED ITA NO.7812/MUM/2010 , BHARAT P.SHAH 3 03/11/2009 WAS ISSUED TO HIM CALLING INFORMATION U/ S 133(6) OF THE ACT. THERE WAS NO RESPONSE TO THE SA ID LETTER. THE ASSESSEE WAS ASKED TO PRODUCE MR. PRAJAPATI, HO WEVER, HE WAS NOT PRODUCED, THUS, THE COMMISSION PAID TO M R. PRAJAPATI WAS TREATED AS BOGUS AND ADDED TO THE INC OME OF THE ASSESSEE. TO CUT SHORT THE MATTER, THE CONTENTI ON OF THE ASSESSEE IS THAT, ADDITION WAS MADE ON THE BASIS OF STATEMENT OF UNCONNECTED PERSON. WE ARE NOT AGREEIN G WITH THIS ASSERTION OF THE ASSESSEE BECAUSE MR. BHAGWAN H. PRAJAPATI IS A CORRESPONDING PARTY/CONNECTED PARTY, THUS, THE REOPENING U/S 147/148 WAS RIGHTLY MADE. THIS GR OUND OF THE ASSESSEE IS, THEREFORE, HAVING NO MERIT, CON SEQUENTLY, DISMISSED. 3. THE NEXT GROUND PERTAINS TO CONFIRMING THE DISALLOWANCE OF COMMISSION EXPENSES OF RS.2,95,500/ - PAID TO SHRI BHAGWAN H. PRAJAPATI. IDENTICAL ARGUMENTS W ERE ADVANCED BY THE ASSESSEE, WHEREAS, THE LD. DR DEFEN DED THE DISALLOWANCE OF COMMISSION. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE US , THE ASSESSEE FILED CERTAIN PAPERS (PAGE-3 OF THE PAPER BOOK), WHEREIN, SHRI BHAGWAN H. PRAJAPATI, VIDE LETTER DAT ED 11/11/2009 CLARIFIED THE NATURE OF BUSINESS AND RES PONDED TO INFORMATION CALLED U/S 133(6) OF THE ACT, EXPLAI NING THAT HE RECEIVED THE AMOUNT ON 20/04/2003 THROUGH CHEQUE NO. 569911 AND DEDUCTED TDS OF RS.3,251/-. WE ALSO NOT E THAT IDENTICAL ARGUMENTS/DISCUSSION HAVE BEEN MADE IN PA RA 3.2 ITA NO.7812/MUM/2010 , BHARAT P.SHAH 4 OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IN VIEW OF THESE FACTS, THE ASSESSEE IS DIRECTED TO PRODUCE MR. PRAJAPATI, WHO HAS VIDE HIS DEPOSITION AVERRED OF THE TRANSACTION BEING BOGUS; BEFORE THE ASSESSIN G OFFICER (REFER PARA 3.1 OF THE IMPUGNED ORDER). THE ASSESS ING OFFICER SHALL SATISFY HIMSELF, EXAMINING ALL ASPECT S OF THE MATTER, INCLUDING, THOUGH NOT LIMITED TO ESTABLISHI NG THE RENDERING OF SERVICES ON WHICH COMMISSION IS ALLOWE D; AS TO WHO OPENED THE BANK ACCOUNT (IN WHICH THE COMMISSIO N WAS DEPOSITED); WHO OPERATED THE SAID ACCOUNT; HOW WERE THE FUNDS WITHDRAWN THEREFROM AND UTILIZED, ETC., SO AS TO DETERMINE AS TO WHO IS THE REAL BENEFICIARY OF THE SAID AMOUNT, DECIDING THE ISSUE IN ACCORDANCE WITH LAW. THE ASSESSEE ALSO BE GIVEN OPPORTUNITY OF BEING HEARD A ND IF MR. PRAJAPATI IS PRODUCED, THE ASSESSEE AS WELL AS THE ASSESSING OFFICER ARE FREE TO CROSS EXAMINE HIM. THIS GROUND IS ALLOWED OF STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT TH E CONCLUSION OF HEARING ON 29/07/2015 . SD/- SD/- ( SANJAY ARORA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; ) DATED : 28/08/2015 F{X~{T? P.S/. . . ITA NO.7812/MUM/2010 , BHARAT P.SHAH 5 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1# ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1# / CIT(A)- , MUMBAI 5. 3$4 .# , 0 +( 5 , % & / DR, ITAT, MUMBAI 6. ! 7& / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI