HASMUKHLAL B. VAKHARIA (HUF), MUMBAI V. ITO 24(1)(4), MUMBAI

ITA 882/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4181 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 14-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONE
• Keywords: Corroborative evidences; Tax effect
• Section: 142(1); 133(6); 144; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, M UMBAI BEFORE S/SHRI B.R.BASKARAN, AM AND AMARJIT SINGH, JM ./I.T.A. NO.897/MUM/ 2013 ( / ASSESSMENT YEAR: 2006-07) INCOME TAX OFFICER 24(1)(4), ROOM NO.502,C-13, PRATYAKSHAKAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400051. / VS. HASMUKH B VAKHARIA (HUF), 303, SHIV ARCHANA, GOVIND NAGAR, MALAD,(E), MUMBAI-400051 ( / APPELLANT) .. ( / RESPONDENT) ./I.T.A. NO.882 AND 883/MUM/ 2013 ( / ASSESSMENT YEARS: 2006-07 AND 2007-08) HASMUKH B VAKHARIA (HUF), 303, SHIV ARCHANA, GOVIND NAGAR, MALAD,(E), MUMBAI-400051 / VS. INCOME TAX OFFICER 24(1)(4), AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN. :AABHH6836G / REVENUE BY SHRI VIJAY KUMAR SONE, ! / ASSESSEE BY SHRI NISHIT GANDHI ! $% / DATE OF HEARING : 7.1.2016 ! $% /DATE OF PRONOUNCEMENT: 6.4.2016 / O R D E R PER BENCH: THE CROSS-APPEALS ARE FILED AGAINST THE ORDER DATE D 21.11.2012 PASSED BY THE LD.CIT(A)-34 FOR THE ASSESSMENT YEAR 2006-07 AND ASSESSEE HAS ALSO FILED ANOTHER APPEAL BEARING ITA NO.883/MU M/2013 FOR THE I.T.AS. NO.897/MUM/ 2013 882 AND 883/MUM/2013 2 ASSESSMENT YEAR 2007-08. SINCE THESE APPEALS PERTA IN TO THE SAME ASSESSEE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. SO FAR AS THE APPEAL FOR THE ASSESSMENT YEAR 2006- 07 FILED BY THE REVENUE IS CONCERNED, THE QUANTUM IN DISPUTE IS RS. 28,44,912/- AND THE TAX EFFECT INVOLVED THEREIN IS LESS THAN RS.10 LAKH S. IN VIEW OF THE CIRCULAR ISSUED BY CBDT BEARING NO.21/2015 DATED 10.12.2015 PRESCRIBING NEW MONETARY LIMIT OF RS.10.00 LAKHS FOR PREFERRING APP EAL AGAINST THE ORDERS PASSED BY LD CIT(A) BEFORE THE TRIBUNAL, THE REVENU E IS PRECLUDED FROM PURSUING THIS APPEAL BY THE REVENUE. ACCORDINGLY, WE DISMISS THE SAME. 3. NOW WE SHALL TAKE THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE RETURN O F INCOME WAS FILED ON 31.10.2006 DECLARING A TOTAL INCOME OF RS.1,29,230/ -. THE CASE WAS SELECTED FOR SCRUTINY AND THE STATUTORY NOTICED UND ER SECTION 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. T HE ASSESSEE IS INVOLVED IN THE BUSINESS OF PROPRIETARY CONCERNED I N THE NAME OF M/S ANKUR SALES CORPORATION. THE AO FOUND THAT THE A SSESSEE HAS SHOWN GP AT 2.8% AN COMPARED TO 2.26% FOR THE LAST YEAR, NET PROFIT AT 0.79% AS COMPARED TO LAST YEAR 1.2% ON SALES. THE AO FOUND T HAT STOCK REGISTER IS NOT MAINTAINED PROPERLY. THE STOCK HAS BEEN VALUED AT COST. THE AUDITORS HAVE GIVEN REMARKS UNDER THE HEAD SI GNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS THAT THE BALANCE OF SUNDRY DEBTORS AND CREDITORS, PROVISIONS, BANK LOANS DEPOSITS AND LOAN S AND ADVANCES ARE SUBJECT TO CONFIRMATION AND RECONCILIATION. ALL IT EMS OF RECEIPTS AND PAYMENTS, INCOME AND EXPENDITURES, ASSETS AND LIABI LITIES, WHEREVER NECESSARY DOCUMENTS, SUPPORTING, VOUCHERS OR ANY SO RT OF EVIDENCE ARE NOT AVAILABLE AND THEY ARE SELF MADE BY THE ASSESSE E. MOST OF THE EXPENSES ARE SUPPORTED BY SELF MADE VOUCHERS. DOUB TING THE GENUINENESS I.T.AS. NO.897/MUM/ 2013 882 AND 883/MUM/2013 3 OF THE PURCHASES AND SALES OF THE ASSESSEE, THE AO ISSUED NOTICE U/S 133(6) TO 11 PARTIES FOR CROSS-VERIFICATION AND OU T OF THEM TWO PARTIES DID NOT REPLY. THE AO DID NOT ACCEPT THE TRADING RESU LT GIVEN BY THE ASSESSEE AND ESTIMATED THE TURNOVER OF THE ASSESSEE AT 3.5 C RORES AS AGAINST RS.281.72 LAKHS AND NET PROFIT ESTIMATED AT THE RA TE OF 1.5% ON THE ESTIMATED TURNOVER OF RS.3.5%. ACCORDINGLY, THE AO ESTIMATED NET PROFIT AT RS.5,25,000/- AS AGAINST THE NET PROFIT AT RS.2, 22,503/-. 4.1 REGARDING INTEREST COMPONENT, OF RS.2,11,955/-. THE AO OBSERVED THAT THE ASSESSEE DID NOT DEDUCT TDS ON THIS AMOUNT AND FAILED TO DEPOSIT THE SAME TO GOVERNMENT TREASURY. WHEREAS THE SUBMI SSIONS OF THE ASSESSEE BEFORE THE AO WAS THAT TDS WAS NOT DEDUCT ED ON INTEREST FOR WHICH FORM 15H WAS RECEIVED AND HAS FILED ORIGINA L 15H DECLARATIONS WHICH HE OUGHT TO HAVE FILED WITH ITO TDS HAVING JURISDICTION. THE ASSESSEE DID NOT PRODUCE ANY PROOF THEREFORE BEFORE THE AO. ACCORDINGLY, THE AO BY INVOKING THE PROVISIONS OF SECTION 40(A )(IA) OF THE ACT DISALLOWED THE SAME AND ADDED IT TO THE TOTAL INCOM E OF THE ASSESSEE. 4.2 WITH RESPECT TO THE PAYMENT OF RS.1,15,763/- MA DE TO PRITESH SURESHBHAI FOR WANT OF SUFFICIENT DOCUMENTARY PROOF , THE AO REJECTED THE CLAIM OF THE ASSESSEE AND ADDED THE SAME TO THE TOT AL INCOME OF THE ASSESSEE. 4.3 WITH RESPECT TO THE UNSECURED LOANS TAKEN BY TH E ASSESSEE, THE ASSESSEE WAS CALLED UPON TO PRODUCE THE LENDER, PRO VE THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS WITH SUPPORTING EVIDENCES. THE ASSESSEE FAILED TO SATISFY THE EXPL ANATION CALLED FOR BY THE AO. ACCORDINGLY, THE AO BY ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN ADDITION TO THE ABOVE, THE ASSESSEE IN THE BALANCE SHEET AS ON 31.3.2006 HAS SHOWN UNSECURED LOANS AS UNDER : THE MALAD SAHAKARI BANK LTD (LOAN) RS.3,00,000/- THE MALAD SAHAKARI BANK LTD (O/D) RS.10,47,445/- I.T.AS. NO.897/MUM/ 2013 882 AND 883/MUM/2013 4 THE AO CALLED FOR THE EXPLANATION FROM THE ASSESSEE , AFTER FOLLOWING DUE PROCESS OF LAW, THE AO OBSERVED THAT THE ASSESSEE HAS THE LIABILITY ONLY TO THE EXTENT OF RS.6,06,523/-. THEREFORE, HE DISALL OWED THE LIABILITY OF RS.7,40,922/- AND ADDED THE SAME TO THE TOTAL INCOM E OF THE ASSESSEE. AFTER ALLOWING THE STATUTORY DEDUCTION, THE AO MAD E AN ASSESSMENT AT RS.55,32,300/-. AGGRIEVED BY THE ADDITION MADE BY THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 5. BEFORE, THE LD.CIT(A), THE ASSESSEE FILED AN ADD ITIONAL EVIDENCES, AND THEREFORE, THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO. AFTER CONSIDERING THE REMAND REPORT, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.4,00,000/- IN RESPECT OF NET PROFIT. IN RESP ECT OF LOANS OF RS.40,41,938/-, THE LD. CIT(A) SUSTAINED THE ADDITI ON OF RS.28,44,912/-. THE LD.CIT(A) DELETED THE ADDITION MADE ON ACCOUNT OF LOANS FROM THE MALAD SAHAKARI BANK LTD. THE ASSESSEE APPEALED BEF ORE THE TRIBUNAL AGAINST THE ADDITION OF NET PROFIT AND ADDITION OF RS.30,94,825/- AND THE TRIBUNAL VIDE ITA NO.5851/M/2010 ORDER DATED 23.2. 2012 HAS SET ASIDE THE ORDER OF THE LD. CIT(A) FOR GIVING FRESH OPPORT UNITY TO THE ASSESSEE. 6. IN THE SET ASIDE PROCEEDINGS, THE ASSESSEE FURN ISHED SIGNED LOAN CONFIRMATION IN RESPECT OF M/S H B METAL CORPORATI ON ALONG WITH THE COPY OF THE BANK ACCOUNT MAINTAINED WITH M/S THE MALAD S AHAKARI BANK LTD FOR THE PERIOD FROM 1.4.2005 TO 31.3.2006. THE LD. CIT(A) AFTER CONSIDERING RELEVANT DOCUMENTS AS PRODUCED BY THE A SSESSEE DELETED THE ENTIRE ADDITION OF RS.28,44,912/- PROVED TO BE GE NUINE. ACCORDINGLY, THE LD. CIT(A) DELETED THE ADDITION OF RS.28,44,912/ -. 7. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO WI TH RESPECT TO THE ISSUE OF NET PROFIT, THE SAME IS CONFIRMED BY THE L D. CIT(A). AGGRIEVED BY THE ORDER OF LD. CIT(A) BOTH THE PARTIES ARE IN A PPEAL BEFORE US. I.T.AS. NO.897/MUM/ 2013 882 AND 883/MUM/2013 5 8. THE LD. CIT(A), THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS.2,22,503/- ON ACCOUNT OF NET PROFIT EARNED FOR W ANT OF NECESSARY DOCUMENTARY PROOF. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE LD.CIT(A) HAS PASSED REASONED ORDER IN THE CASE OF UNSECURED LOAN OF RS.28,44,912/- AND EXCEPT ADDITION OF RS.2,22,503/- IN RESPECT OF NET PROFIT. 11. AS WE OBSERVED IN PARAGRAPH 2 OF THIS ORDER, T HE APPEAL OF THE REVENUE IN RESPECT OF DELETION OF ADDITION OF RS. 28,44,912/-. HAS ALREADY BEEN DECIDED BY US AGAINST THE REVENUE BY VIRTUE OF CBDT CIRCULAR DATED 21.12.2015. 12. IN RESPECT OF ADDITION OF RS.2,22,503/-, AFTER CONSIDERING THE DETAILS AND NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION, THAT THE LD.CIT(A) HAS PASSED REASONED ORDER AND THERE IS NO INFIRMITY IN HIS ORDER. ACCORDINGLY, W E CONFIRM THE SAME. 13. NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESS EE FOR THE ASSESSMENT YEAR 2007-08. 14. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE ISS UE OF EX-PARTE ORDER U/S 144 OF THE ACT. 15. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDO NATION OF DELAY SUPPORTED BY AFFIDAVIT STATING THE REASONS FOR NOT FILING THE APPEAL BEFORE THE LD.CIT(A) IN TIME. AFTER HEARING BOTH THE PARTIES ON THIS PRELI MINARY ISSUE OF LIMITATION, WE CONDONE THE DELAY IN FILING THE APPEAL AND ADMIT TH E APPEAL FOR DECIDING ON MERITS. 16. IN THIS CASE, THE RETURN OF INCOME WAS FILED O N 31.10.2007 DECLARING TOTAL INCOME AT RS.2,18,987/-, THE SAME WAS PROCESSED U NDER THE PROVISIONS OF SECTION 143(2) AND 142(1) OF THE ACT. NOTICES SENT TO THE ASSESSEE WERE RETURN I.T.AS. NO.897/MUM/ 2013 882 AND 883/MUM/2013 6 UNSERVED. ANOTHER NOTICE DATED 25.6.2009 WAS ISSUED FIXING HEARING ON 8.7.2009. IN THE MEAN TIME ASSESSEE FILED AN APPLI CATION FOR ADJOURNMENT OF HEARING. THEREFORE, THE CASE WAS FIXED ON 12.8.200 9 ON THE CONDITION THAT NO FURTHER OPPORTUNITY WOULD BE GIVEN. THE AO AFTER G IVING SUFFICIENT OPPORTUNITIES FROM TIME TO TIME AND ASSESSEE DID NOT REPRESENT TH E CASE DESPITE SUFFICIENT AND FAIR OPPORTUNITY, FRAMED THE ASSESSMENT BY MAKING ADDITION OF NET PROFIT AT RS.2,22,503/- AS HAS BEEN MADE IN THE EARLIER YEAR . 17. IN RESPECT OF ADHOC NET PROFIT, THE AO MADE AD DITION OF RS.6 LAKHS FOR WANT OF SUFFICIENT DOCUMENTARY PROOF. 18. IN RESPECT OF UNSECURED LOANS, THE AO MADE THE ADDITIONS OF RS.30,00,000/- AND AFTER ALLOWING THE ADMISSIBLE DE DUCTION, THE AO MADE AN ASSESSMENT AT RS.34,93,150/-. BEING AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL AS LATE BY 853 DAYS BEFORE THE LD. CIT(A ). THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON TECHNICAL GROUND OF L IMITATION. AGGRIEVED BY THE DECISION OF LD.CIT(A), THE ASSESSEE IS IN APPEAL B EFORE US. 19. WE FIND THAT THE SIMILAR ISSUE HAS ALREADY BEEN DECIDED BY US IN ASSESSMENT YEAR 2006-07. THEREFORE, CONSISTENT WI TH THE VIEW SO TAKEN BY US IN THE EARLIER YEAR, WE HERE ALSO TAKE SIMILAR STAND F OR THIS YEAR. ACCORDINGLY, THIS GROUND IS DISMISSED. 20. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO.897/MUM/2013 IS DISMISSED, AND BOTH THE APPEALS OF THE ASSESSEE ARE ALSO DISMISSED. PRONOUNCED ACCORDINGLY ON 6 TH APRIL, 2016. ( )* +,- 6 TH APRIL 2016 ! SD/- SD/- (B.R. BASKARAN) (AMARJIT SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER ) MUMBAI: 6 TH APRIL , 2016. . . ./ SRL , SR. PS I.T.AS. NO.897/MUM/ 2013 882 AND 883/MUM/2013 7 ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 9$ ( ) / THE CIT(A)- CONCERNED 4. 9$ / CIT CONCERNED 5. :; $< , % < , ) / DR, ITAT, MUMBAI CONCERNED 6. = / GUARD FILE. , / BY ORDER, (ASSTT. REGISTRAR) % < , ) /ITAT, MUMBAI