KISHORE NATWARLAL SHAH, MUMBAI V. ITO WD 20(1)(4), MUMBAI

ITA 8815/MUM/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2562 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DATED PASSED; AGAINST S DATED
• Keywords: Business income; Principle of natural justice
• Section: 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.8815/MUM/2010 & I.T.A.6084/MUM/2013 ( %' ( / ASSESSMENT YEAR: 2009-10) SHRI KISHORE NATWARLAL SHAH B/25, JAY VIEW, SAHAKAR NAGAR, NEAR APANA BAZAR, ANDHERI(WEST), MUMBAI - 400053 ' / VS. INCOME TAX OFFICER WARD 20(1)(4) SIXTH FLOOR, PIRAMAL CHAMBERS, LAL BAUG PAREL, MUMBAI - 400012 ./ ./ PAN/GIR NO. : ALJPS5237K ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 23.05.2016 !' /DATE OF PRONOUNCEMENT: 13.07.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THE ABOVE MENTIONED APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDERS DATED 1-9-2010 AND ORDER DATED 3 0-08-2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-31, MUM BAI ASSESSEE BY: SHRI N. R. AGARWAL & MANISH N. SHAH DEPARTMENT BY: SHRI B. D. NAIK ITA NO.8815/M/10 & 6084/M/13 A.Y. 2006-07 2 [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE 2006-07. THE ASSESSEE HAS CHALLENGED THE QUANTUM OF ORDER AND PE NALTY ORDER PASSED BY ASSESSING OFFICER WHICH HAVE BEEN CONFIR MED BY THE CIT(A) UNDER ORDER CHALLENGED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 31.10.2006 DECLARING TOTAL INCOME TO THE TUNE OF RS.1,89,850/-. THE SOURCE OF INCOME WAS DECLARED AS BUSINESS INCOME FROM THE PROPRIETARY CONCERN VIZ. M/S. N. R. GEMS AND BANK INTEREST OF RS.333/-. THE RETURN WAS PROCESSED UND ER SECTION 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). NOTICE U/S.148 OF THE ACT DATED 24.03.2009 WAS ISSUED AND SERVED UPON THE ASSESSEE BECAUSE THE INCOME CHARGEABLE TO TAX HAS ESCAPED AS SESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THEREAFTER, THE ASSESSEE RELIED UPON THE INCOME WHICH HE HAD FILED EARLIER. THEREA FTER, THE ASSESSMENT WAS COMPLETED BY ASSESSING BOGUS TRANSAC TIONS TO THE TUNE OF RS.32,23,879/-ON THE BILL DATED 18.05.2005 AND A SSESSED THE INCOME TO THE TUNE OF RS.34,13,340/-. THEREAFTER, THE ASS ESSEE FILED AN APPEAL BEFORE LEARNED CIT(A) WHO CONFIRMED THE ORDER PASSE D BY THE ASSESSING OFFICER, THEREFORE THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 3. THE ITA NO.8815/M/10 ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL:- ITA NO.8815/M/10 & 6084/M/13 A.Y. 2006-07 3 '1. THE ASSESSMENT ORDER IS BAD IN LAW ON THE FACTS AND CIRCUMSTANCES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF RS.32,23,819/- BY WAY OF DISALLOWING CLAIM OF APPELLANT TOWARDS NON-EXISTENCE OF PURCHASES FROM M/S.ZALAK IMPEX. DISALLOWANCE BEING BAD IN LAW NEEDS TO BE CANCELLED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN NOT PROVIDING NATURAL JUSTICE TO APPELLANT BY NOT CONFRONTING ANY MATERIAL AND / OR CROSS EXAMINATION OF THE CONCERNED PARTIES. DISALLOWANCE BEING BAD IN LAW NEEDS TO BE CANCELLED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN LEVYING INTEREST UNDER SECTIONS 234B, 234C & 234D WHICH NEEDS TO BE DELETED. ADDITIONAL GROUND:- 1. THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THOUGH NO NOTICE U/S.143(2) IS ISSUED BY A.O., ASSESSEE HAS NOT RAISED OBJECTION BEFORE A.O., HENCE U/S.292BB GRIEVANCE OF THE APPELLANT IS UNTENABLE OR NOT ACCEPTABLE. 4. THE ITA NO.6084/M/13 ASSESSEE HAS RAISED THE FOL LOWING 1. ON THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF THE CIT(A) IS BAD IN LAW AND NEEDS TO BE CANCELLED. 2. WITHOUT PREJUDICE TO PARA 1 ABOVE, ITA NO.8815/M/10 & 6084/M/13 A.Y. 2006-07 4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE PENALTY LEVIED BY THE LEARNED ASSESSING OFFICER U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS.10,29,038/- ON ACCOUNT OF FILLING OF INACCURATE PARTICULARS OF INCOME AND ALSO FOR CONCEALING PARTICULARS OF INCOME. THE REASON FOR UPHOLDING THE PENALTY IS WRONG AND INSUFFICIENT. ORDER OF PENALTY BEING BAD IN LAW NEEDS TO BE CANCELLED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT PROVIDING NATURAL JUSTICE TO APPELLANT BY NOT CONFRONTING ANY MATERIALS AND / OR CROSS EXAMINATION OF THE CONCERNED PARTIES. ORDER OF PENALTY BEING BAD IN LAW NEEDS TO BE CANCELLED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN STATING THAT THE ASSESSEE HAS NOT SUBSTANTIATED HIS CLAIM OF PURCHASE MADE FROM M/S.ZALAK IMPEX AND THEREFORE UPHELD THE LEVY OF PENALTY U/S.271(1)(C). ORDER OF PENALTY BEING BAD IN LAW NEEDS TO BE CANCELLED. ADDL. GROUND OF THE ITA.N 1815/M/10 5. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE PRESENT CASE IS THE CASE TAKEN UP U/S.147 OF THE ACT WHEREIN NOTICE U/S .143 OF THE ACT WAS NOT ISSUED BY THE ASSESSING OFFICER, THEREFORE, THE PROCEEDING U/S.147 OF THE ACT IS WRONG AGAINST LAW AND FACTS AND IS LI ABLE TO BE SET ASIDE. HE ALSO PLACED RELIANCE OF THE LAW SETTLED IN CIT V S. MR. SALMAN ITA NO.8815/M/10 & 6084/M/13 A.Y. 2006-07 5 KHAN I.T. APPEAL NO. 2362 OF 2009 DATED 01.12.2009 (BOMBAY HIGH COURT) AND KUBER TOBACCO PRODUCTS (P) LTD. VS. DCIT 18 DTR 1 (DELHI SPECIAL BENCH). IT IS ALSO ARGUED THAT THE PRESENT CASE IS OF THE A.Y.2006-07 WHEREAS THE SECTION 292BB OF THE ACT WA S HAVING DIFFERENT FACTS FROM THE PRESENT CASE, THEREFORE TH E SAID PROVISION IS NOT APPLICABLE TO THE PRESENT CASE. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS PLACED RELIANC E UPON THE ORDER PASSED BY THE LEARNED CIT(A) IN QUESTION. ON APPRA ISAL OF THE ORDER DATED 04.12.2009 PASSED BY THE ASSESSING OFFICER NO WHERE IT CAME INTO NOTICE THAT THE ASSESSING OFFICER ISSUED NOTIC E U/S.143(2) OF THE ACT. THE PROVISION OF U/S.292BB OF THE ACT IS APPL ICABLE FOR THE A.Y.2008-09 ONWARDS. THE SAID AMENDMENT IS PROSPEC TIVE IN NATURE. IN VIEW OF THE LAW SETTLED IN CIT VS. MR. SALMAN KH AN I.T. APPEAL NO. 2362 OF 2009 DATED 01.12.2009 (BOMBAY HIGH COUR T) AND KUBER TOBACCO PRODUCTS (P) LTD. VS. DCIT 18 DTR 1 (DELHI SPECIAL BENCH), WE ARE OF THE VIEW THAT THE PROCEEDINGS INI TIATED U/S.147 OF THE ACT IS WRONG ON ACCOUNT OF NON-FOLLOWING OF THE MANDATORY PROVISION I.E. THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT THEREFORE ORDER DATED 1.09.2010 IN QUESTION IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW THEREFORE THE SAME IS HEREBY ORDER TO B E SET ASIDE THEREFORE, THESE ISSUES ARE DECIDED IN FAVOUR OF TH E ASSESSEE AGAINST THE REVENUE. ISSUE NO.1 TO 4 OF QUANTUM APPEAL:- ITA NO.8815/M/10 & 6084/M/13 A.Y. 2006-07 6 6. ALL THE ISSUES ARE FACTUAL IN NATURE WHEREIN THE ASSESSING OFFICER HAS DISALLOWED THE PURCHASE TO THE TUNE OF RS.32,23,819/- FROM M/S. ZALAK IMPEX. THERE IS NO NEED TO DECIDE THESE ISSUES BECAUSE THE ASSESSMENT U/S.147 HAS ALREADY BEEN ADJUDICATED BY HOLDING THAT THE ASSESSMENT IS WRONG AGAINST LAW AND FACTS, THEREFOR E DECISION ON THIS ISSUE WOULD MERELY BE OF THE NATURE OF THE ACADEMIC , THEREFORE, THERE IS NO NEED TO DECIDE THE SAME. ISSUE NO.1 TO 4 OF PENALTY APPEAL:- 7. SINCE THE ORDER IN QUESTION U/S.147 OF THE ACT H AS BEEN DECLARED AS WRONG AGAINST LAW AND FACTS AND HAS BEEN ORDERED TO BE SET ASIDE, THEREFORE, NO DOUBT IN THE SAID CIRCUMSTANCES NO PE NALTY IS LEVIABLE ON THE BASIS OF THE SAID ORDER HENCE IT IS HEREBY ORDE RED TO BE SET ASIDE. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 13 TH JULY, 2016 MP MP MP MP ITA NO.8815/M/10 & 6084/M/13 A.Y. 2006-07 7 * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI