Appeal details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 4300 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 11 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-01-2016
Appeal Filed By
Department
Bench Allotted
E
Next Hearing Date
13-05-2015
Assessment Year
2009-2010
Appeal Filed On
30-01-2013
Judgement Text
, ,, , INCOME TAX APPELLATE TRIBUNAL,MUMBAI- E,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANDEEP GOSAIN,JUDICIAL MEMBER /.ITA NO.802 /MUM/2013, /ASSESSMENT YEAR-2009-10 ACIT-19(3) ROOM NO.305, 3 RD FLOOR PIRAMAL CHAMBERS, PAREL MUMBAI-400 012. VS. M/S. ELCO PANIPURI CENTRE SHOP NO.2A, ELCO ARCADE HILL ROAD, BANDRA (W) MUMBAI-400 050. PAN:AABFE 3742 N ( / ASSESSEE ) ( / RESPONDENT) /ASSESSEE BY :SH. MANDAR VAIDYA -AR / REVENUE BY :SH. SACHIDANAND DUBEY-DR / DATE OF HEARING : 16 - 11 -2015 / DATE OF PRONOUNCEMENT : 01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 29.11.2012 OF CIT(A)-3 0, MUMBAI THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL. ASSESSEE-FIRM ENGAGED IN THE BUSINESS OF SERVING FA ST FOOD AND CATERING FILED ITS RETURN OF INCOME ON 27.9.2009 DECLARING TOTAL INCOME OF RS.41 .70 LACS.THE AO COMPLETED THE ASSESSMENT ON 19.12.11 DETERMINING THE INCOME OF T HE ASSESSEE AT RS.90,72,180/-. 2. THE EFFECTIVE GROUND OF APPEAL IS ABOUT DELETING TH E ADDITION OF RS.45.41 LACS.DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT A SURVEY O PERATION U/S.133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 6.2.2009, THAT THE STATEMENT U/S. 131 OF THE ACT OF ONE OF THE PARTNERS WAS RECORDED, THAT T HE PARTNERS VOLUNTARILY OFFERED AN ADDITIONAL INCOME OF RS.1.00 CRORES,THAT IN THE STATEMENT IT W AS HIGHLIGHTED THAT THE FIRM HAD CARRY FORWARD LOSS OF RS.50-51 LACS, THAT A REQUEST WAS M ADE TO ALLOW THE ADJUSTMENT AGAINST THE ADDITIONAL INCOME OFFERED DURING THE COURSE OF SURV EY, THAT AT THE TIME OF FILING OF RETURN OF INCOME THE ASSESSEE HAD ADJUSTED THE ENTIRE LOSS OF RS.50.98 LACS, THAT IT FAILED TO OFFER THE BALANCE ADDITIONAL INCOME OF RS.49.01 LACS FOR TAXA TION.VIDE HIS LETTER DT.16.11.2011, THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE ADDITIO NAL INCOME OF RS.49,01,290/- SHOULD NOT BE BROUGHT TO TAX AS IT HAD FAILED TO DISCLOSE THE SAM E.THE ASSESSEE VIDE ITS LETTER DT.25.11.2011 FILED ELABORATE EXPLANATION.AFTER CONSIDERING THE S AME,THE AO HELD THAT THE ASSESSEE HAD OFFERED AN ADDITION OF RS.1.00 CRORES OVER AND ABOV E THE NORMAL REGULAR INCOME, THAT THE OFFER WAS BASED ON THE PAPERS FOUND AND IMPOUNDED BY THE SURVEY PARTY,THAT IN ITS LETTER,DT. 25. 11. 2011,THE ASSESSEE HAD CLAIMED THAT IT HAD OFFERED S ALES OF RS.1.00 CRORES AND NOT ADDITIONAL INCOME,THAT THE ASSESSEE HAD RETRACTED ITS STATEMEN T. THE AO FURTHER HELD THAT STATEMENT GIVEN DURING THE COURSE OF SURVEY/SEARCH WERE IMPORTANT P IECE OF EVIDENCE, THAT DETRACTION AFTER A CERTAIN PERIOD OF TIME WAS LEGALLY IMPERMISSIBLE, T HAT THE ASSESSEE WAS UNABLE TO RECONCILE THE DISCREPANCIES POINTED OUT AT THE TIME OF SURVEY,THA T IT WAS NOT A CASE WHERE THE ADDITIONAL INCOME WAS NOT OFFERED WITHOUT EXAMINING /VERIFYING THE DOCUMENTS,THAT AT THE TIME OF FILING OF RETURN THE ASSESSEE RETRACTED ITS STATEMENT.FINA LLY, THE AO HELD THAT AN ADDITION OF RS.49.01 LACS HAD TO BE MADE TO THE INCOME OF THE ASSESSEE ( RS.1.00 CRORES 50,98,710 B/F LOSSES). 802/M/13 ELCO 2 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM,IT WAS ARGUED THAT ASSESSEE HAD NOT CLAIMED ANY EXPENDITURE AGAINST THE ADDITIONAL INCOME OFFERED.T HE ASSESSEE PREPARED A TRADING AND P&L A/C. FOR THE PERIOD ENDING 31.3.2009 WITHOUT ENHANC ING THE SALES BY RS.1.00 CRORES AND STATED THAT THE GP WOULD BE RS.67.73 LACS, THAT THE NET PR OFIT WOULD BE RS.5.65 LACS.IT WAS FURTHER CONTENDED THAT SALARY TO PARTNERS OF RS.6.60 LACS H AVE BEEN CLAIMED FOR THE FIRST TIME,THAT IF ALL THESE FACTORS WERE CONSIDERED IT WOULD RESULT IN NE T LOSS OF RS.94.398.THE ASSESSEE PREPARED A FRESH COMPUTATION OF INCOME AFTER CONSIDERING RS.1. 00 CRORES AS ADDITIONAL INCOME AND PLEADED THAT THOUGH THE SALES HAD BEEN ENHANCED BY RS.1.00 CRORES, BUT EFFECTIVELY IT WAS AS GOOD AS ADDITIONAL INCOME OFFERED OF RS.1.00 CRORES .A COMPARATIVE CHART OF GP/MP FOR VARIOUS YEARS WAS FURNISHED BY THE ASSESSEE.AFTER C ONSIDERING THE CHARTS FILED BY THE ASSESSEE, THE FAA HELD THAT IF THE GP WAS WORKED OUT WITHOUT CONSIDERING THE ENHANCEMENT OF SALES OF RS.1.00 CRORES IT WOULD WORK OUT TO 33.26% AS COMPA RED TO THE GP OF 34.45% OF THE PRECEDI - NG YEAR,THAT THERE WOULD BE SLIGHT FALL IN GP, THAT IF GP WAS WORKED OUT AFTER CONSIDERING THE ENHANCEMENT OF SALES OF RS.1.00CRORES IT WOULD WORK OUT TO RS.52.41%, THAT THE ENHANCEMENT OF SALE BY RS.1.00CRORES WAS AS GOOD AS ADDITIONAL INCOME OFFERED OF RS.1.00CRORES, THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE H AD RETRACTED THE STATEMENT.FAA FURTHER HELD THAT THERE WAS SHORTFALL IN GP BY 1.74%.CONSID ERING THE ABOVE HE SUSTAINED ADDITION TO THE EXTENT OF RS.3.59 LACS AND DELETED THE BALANCE ADDITION. 4. BEFORE US,THE DEPARTMENTAL REPRESENTATIVE (DR) STAT ED THAT ASSESSEE HAD OFFERED ADDITIONAL INCOME OF RS.1.00CRORES DURING THE COURSE OF SURVEY , THAT ADDITIONAL INCOME WAS OFFERED AFTER THE PARTNERS OF ASSESSEE FIRM HAD PERUSED THE IMPOU NDED MATERIAL, THAT THE FAA HAD NOT ANALYSED THE STATEMENTS RECORDED, THAT HE HAD DECID ED THE ISSUE WITHOUT AFFORDING A REASONABLE OPPORTUNITY TO THE AO REGARDING NEW CLAI MS MADE BEFORE HIM DURING THE APPELLATE PROCEEDINGS.THE AUTHORISED REPRESENTATIVE (AR) SUPP ORTED THE ORDER OF THE FAA. ON A SPECIFIC QUERY BY THE BENCH,HE FAIRLY ADMITTED THAT THE AO HAD NO OCCASION TO VERIFY THE VERACITY OF CHARTS SUBMITTED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFORE THE FAA, THAT THE CLAIM OF EXPENDITURE ON ACCOUNT OF SALARY TO PARTNERS WERE NOT MADE BEFORE THE AO, THAT THE AO HAD NO OCCASION TO VERIFY THE CLAIM OF PURCHASE OF NEW PREMISES AND EXPENDITURE INCURRED WITH REGARD TO IT.CONSIDERING THE ABOVE FA CTS WE ARE OF THE OPINION THAT THE MATTER NEEDS FURTHER VERIFICATION.SO,IN THE INTEREST OF JU STICE,WE ARE RESTORING BACK THE ISSUE TO THE FILE OF THE FAA WHO WOULD AFFORD A REASONABLE OPPOR TUNITY OF HEARING TO THE AO.HE MAY HEAR THE ASSESSEE ALSO AFTER OBTAINING COMMENTS OF THE A O.EFFECTIVE GROUND OF APPEAL FILED BY THE ASSESSEE STANDS ALLOWED IN PART. AS A RESULT,APPEAL FILED BY THE AO STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JANUARY 2016. 01 , 2016 SD/- SD/- ( /SANDEEP GOSAIN ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI, DATE: 01.01.2016 . . . JV.SR.PS. 802/M/13 ELCO 3 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.
