ITO 17(1)(3), MUMBAI V. BENNY GABRIEL PINTO, MUMBAI

ITA 890/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2467 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 30-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-02-2013
• Court: TRIBUNAL
• Department Lawyers: RAJI V PANT
• Assessee Lawyers: SHEKHAR KADAM
• Keywords: Income from undisclosed sources

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI AMARJIT SINGH , J M ./ ITA NO . 890 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 9 - 20 10 ) ITO - 17(1)(3), MUMBAI VS. SHRI BENNY GABRIEL PINTO, 28, BARUCHA COMPOUND, NESBIT ROAD, MAZGAON , MUMBAI - 400010 ./ ./ PAN/GIR NO. : A FBPP 7505 D ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI RAJI V PANT /ASSESSEE BY : SHRI SHEKHAR KADAM / DATE OF HEARING : 05 / 11 / 2015 / DATE OF PRONOUNCEMENT 18/11 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), MUMBAI , DATED 2 - 11 - 2012, FOR THE ASSESSMENT YEAR 200 9 - 10 , IN THE MATTER OF ORDER P ASSED U/S.143(3) OF THE I.T.ACT , WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.26,89,195/ - MADE ON ACCOUNT OF DIFFERENCES FOUND IN RECEIPTS COMPRISED IN TDS CERTIFICATES AND RECEIPTS AS PER P&L A/C., WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE NEITHER OFFERED ANY EXPLANATION FOR THE SAME NOR FURNISHED COMPLETE PARTY - WISE DETAILS OF RECEIPTS DURING THE COURSE OF ENTIRE ASSESSMENT PROCEEDINGS. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO. 890 /M/1 3 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN AUTHORIZED ADVERTISING AGENT FOR LEADING PUBLICATIONS RUNNING A PROPRIETARY CONCERN IN NAME & STYLE OF M/S PINTO ADVERTISING. DURING THE PRE VIOUS YEAR, THE ASSESSEE H AS SHOWN GROSS RECEIPTS AT RS.1, 08,50,603/ - AND DECLARED A NET PROFIT OF RS.6,46,291/ - . D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH A STATEMENT OF INCOME COMPRISED IN TDS CREDIT CLAIMED AND B REAK - UP OF THE INCOME A CTUALLY CREDITED IN THE P & L A/C OF THIS YEAR WITH AN EXPLANATION FOR DIFFERENCE. IN RESPONSE TO THE SAME THE ASSESSEE, VIDE LETTER DATED 19/10/2011, MERELY STATED THAT THERE WAS NO SUCH DIFFERENCE. HOWEVER, NO STATEMENT GIVING DETA ILS OF INCOME COMPRISED IN TDS CREDIT AND BREAK - UP OF INCOME SHOWN IN THE P&L A/C WAS SUBMITTED. HENCE, THE ASSE SS EE WAS GRANTED ANOTHER OPPORTUNITY TO FURNISH SUCH DETAILS IN A TABULATED FORM. ON COMPARISON OF THE DETAILS SUBMITTED BY THE ASSESSEE AND THE INCOME ACTUALLY COMPRISED IN THE TDS CERTIFICATES, FOLLOWING DIFFERENCES WERE NOTICED NAME OF THE PARTY AMOUNT AS PER TDS CERTIFICATES AS PER DETAILS OF GROSS RECEIPTS DIFFERENCE AIRLINES MARKETING SERVICES 14,59,844/ - - 14,59,844/ - KARMATEX 12,23,147/ - - 12,23,147/ - SEVA SADAN 36,924/ - 30,720/ - 6,204/ - THE AO OBSERVED THAT IN CASE OF M/ S AIRLI N ES MARKETING SERVICE S INDI A PVT . LTD. AND M/ S KARMATEX, THE ASSESSEE HAS CLAIMED THAT INCOMES WERE OFFERED IN P&L ALE. HOWEVER, PERUSAL OF THE DETAILS OF GR OSS RECEIPTS SUBMITTED BY T HE ASSESSEE VIDE LETTER DATED 19/10/2011 AS WELL AS THOSE ITA NO. 890 /M/1 3 3 SUBMITTED VIDE LETTER DATED 09/11/2011, THE RECEIPTS FROM THE ABOVE PARTIES DO NOT FORM A PART OF THE GROSS RECEIPTS. FURTHER, THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION FOR SUCH DISCREPANCIES / DIFFERENCES. IN THE CIRCUMSTANCES, THE SAID AMOUNT OF RS. 26,89,195/ - WAS TREATED BY AO AS UNACCOUNTED INCOME FOR THE YEAR UNDER CONSIDERATION AND ADDED TO THE TOTAL INCOM E . 3. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE ADDITION AF TER HAVING THE FOLLOWING OBSERVATIONS : - 3.3 I HAVE GONE THROUGH THE FINDINGS IN THE ASSESSMENT ORDER, DOCUMENT SUBMITTED DURING ASSESSMENT PROCEEDINGS AND THE EXPLANATION SUBMITTED DURING THE APPELLATE PROCEEDINGS. ON GOING THROUGH THE ASSESSMENT ORDER, IT IS SEEN THAT THERE IS ONLY ONE REASON GIVEN BY THE ASSESSING OFFICER FOR MAKING THIS ADDITION THAT THE NAMES OF BOTH THESE PARTIES DID NOT FIGURE IN THE LIST OF PARTIES WITH GROSS RECEIPTS ABOVE RS.1,00,000/ - SUBMITTED BY THE APPELLANT. ON THE CONTRARY, THERE ARE AMPLE EVIDENCES SUBMITTED BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS THAT REFLECT THE CORRECTNESS OF THE CLAIM OF THE APPELLANT. THESE ARE : - (I) THE DETAILS OF TDS CE R TI FICATES WERE SUBMITTED BY THE APPELLAN T HIMSELF WITH THE ASSESSING OFF ICER WHEREIN THESE RECEIPTS ARE REFLECTED. (II) THE APPELLANT HAS SUBMITTED DETAILS OF SUNDRY DEBTORS ABOVE RS .1,00,000/ - AND THERE WERE ONLY TWO PARTIES I.E, M/S.AIRLINES MARKETING SERVICES AND M/S.KARMATEX APPARELS PVT. ITD. T H ESE DETAILS WERE ALREADY WITH THE ASSESSING OFFICER. (I II ) E V EN IN THE RETURN OF INCOME, NAMES OF BOTH THESE PARTIES ARE APPEARING UNDER THE HEAD 'SUNDRY DEBTORS'. AIRLINES MARKETING (INDIA) HAS BEEN SH OWN WITH A DEBIT BALANCE OF R S .3,53,803/ - AND KARMATEX APPARELS PVT. LTD. WIT H A BALANCE OF RS.3,40,432/ - . (IV) THE COPY OF APPELLANT'S BANK ACCOUNT IN CITIZEN CO . OP BANK LTD. AND IN HDFC BANK WERE SUBMITTED BEFORE THE ASSESSING OFFICER. THE PAYMENTS MADE BY THESE PARTIES HAVE BEEN DEPOSITED IN THESE BANK ACCOUNTS AND THE AMOUNTS ARE TALLYING WITH THE ENTRIES APPEARING IN THE ACCOUNTS OF THESE PARTIES IN THE BOOKS OF APPELLANT. 3.4 AS REGARDS THE DIFFERENCE IN THE CASE OF SEVA SADAN SOCIETY, IT IS SEEN THAT THE APPELLANT HAS SATISFACTORY RECONCILED THE DIFFERENCE APPEARING IN TH E ACCOUNT OF SEVA SADAN SOCIETY. IT IS APPARENT THAT ITA NO. 890 /M/1 3 4 THE BILL DATED 7.3.2008 WAS ACCOUNTED BY THE APPELLANT IN THE EARLIER PREVIOUS YEAR WHEREAS SEVA SADAN SOCIETY HAS TAKEN THIS BILL IN THE CURRENT YEAR. FROM THE ABOVE, IT CAN BE SEEN THAT APPELLANT HAD REGULAR TRANSACTIONS WITH BOTH THE PARTIES AND ALL TRANSACTIONS ARE PROPERLY RECORDED IN THE BOOKS OF ACCOUNT OF THE APPELLANT. BOTH THE PARTIES HAVE BEEN SHOWN AS DEBTORS IN THE RETURN OF INCOME ITSELF. ONLY BECAUSE OF A TYPING MISTAKE OF CLUBBING THESE P ARTIES UNDER A SEPARATE HEAD CANNOT BE A REASON FOR SUCH AN ADDITION OF A PERSON WHO P RE PARED DETAILS ON BEHALF OF THE APPELLANT AS THESE TWO NAMES WERE NOT MENTIONED IN T LIST OF PARTIES WIT H GROSS RECEIPTS OF MORE THAN RS .1,00,000/ - . THE ASSESSING OFFICE R HAS NOT PROPERLY VERIFIED THE DETAILS FILED BY THE APPELLANT BEFORE HIM AS WELL AS THE RETURN OF INCOME AND HAS SUMMARILY REJECTED THE EXPLANATION OF THE APPELLANT AND SUCH AN ADDITION CANNOT BE SUSTAINED. ASSESSING OFFICER HAS NOT EVEN GIVEN THE APPELLA NT ANY SPECIFIC OPPORTUNITY TO CLARIFY THE DISCREPANCY. IN VIEW OF ABOVE DISCUSSION, THE ADDITION OF RS.26,89,195/ - MADE BY THE ASSESSING OFFICER STANDS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. AGAINST THE ABOVE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ONLY BECAUSE OF TYPOGRAPHICAL MISTAKE OF THE CLERK, THE AO CAME TO THE CONCLUSION THAT THE CONCERN M/S AIRLINES MARKETING SERVICES AND KARMATEX APPARELS PVT. LTD. DO NOT APPEAR IN TH E LIST OF PARTIES WITH GROSS RECEIPT OF MORE THAN RS.1 LAKH. WE FOUND THAT CLERK OF THE ASSESSEE HAS WRONGLY INCLUDED RECEIPT FROM THESE PARTIES IN THE LIST SHOWING GROSS RECEIPT OF MORE THAN RS. 25,000/ - . THUS, IT IS NOT THE CASE THAT THE ASSESSEE HAS NOT INCLUDED RECEIPT FROM THESE TWO PARTIES IN ITS INCOME. BUT ONLY BECAUSE OF CLERICAL ERROR THE AO HAS NOT VERIFIED THE LIST OF PARTIES HAVING GROSS RECEIPT OF MORE THAN 25000/ - WHICH INCLUDED RECEIPT FROM BOTH THE PARTIES. A DETAILED FINDING HAS BEEN RECOR DED BY THE CIT(A) AT PARA 3.3 OF HIS ORDER TO THIS EFFECT. FURTHERMORE, WE HAD ALSO VERIFIED THE STATEMENT OF ACCOUNT OF ITA NO. 890 /M/1 3 5 THESE TWO PARTIES AS PLACED ON RECORD WHICH SUBSTANTIATED ASSESSEES CLAIM THAT RECEIPT OF RS.14,59,844/ - IN CASE OF AIRLINES MARKETIN G SERVICES AND RS.12,23,147/ - IN CASE OF KARMATEX APPARELS PVT. LTD. WAS DULY INCORPORATED AS INCOME IN THE PROFIT AND LOSS ACCOUNT. WE HAD ALSO VERIFIED THE LIST OF SUNDRY DEBTORS AT THE END OF THE YEAR, STATEMENT OF TDS DEDUCTED FROM THESE PARTIES DURING THE YEAR AND THE FORM NO.16A AS PLACED ON RECORD, ALL OF WHICH CLEARLY SPEAK REGARDING RECEIPT FROM THESE PARTIES ALREADY ACCOUNTED BY THE ASSESSEE AS ITS INCOME. IN RESPECT OF M/S SEWA SADAN SOCIETY, WE FOUND THAT DIFFERENCE WAS RS.5532/ - WHICH THE ASSES SEE HAD ALREADY ACCOUNTED IN ITS BOOKS IN THE LAST YEAR, WHEREAS SEWA SADAN HAS ACCOUNTED IN THIS YEAR. AS PER CONFIRMATION OF SEWA SADAN, THERE IS NO DIFFERENCE. ACCORDINGLY, THE AO WAS NOT CORRECT IN ADDING THE SUM IN CURRENT YEAR WHICH THE ASSESSEE HAD ALREADY ACCOUNTED AS ITS INCOME IN THE EARLIER YEAR. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE CIT(A) HOLDING THAT RECEIPT FROM THESE PARTIES ARE INCLUDED IN THE INCOME OF THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT. 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 18/11 / 201 5 . SD/ - SD/ - ( AMARJIT SINGH ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 18/11 /201 5 . . /PKM , . / PS ITA NO. 890 /M/1 3 6 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//