RR EQUITY BROKERS (P) LTD, MUMBAI V. ITO 4(2)(1), MUMBAI

ITA 9073/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1846 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 28-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK KUMAR SINHA
• Assessee Lawyers: V MOHAN
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO.: 9073/MUM/2010 ASSESSMENT YEAR: 2006-07 M/S R R EQUITY BROKERS (P) LTD. 133-A, 13 TH FLOOR, MITTAL TOWER, NARIMAN POINT, MUMBAI 400 021 PAN NO. AACCR 7602 J ITO 4(2)(1) MUMBAI (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI V. MOHAN RESPONDENT BY : SHRI DIPAK KUMAR SINHA DATE OF HEARING : 22.01.2013 DATE OF PRONOUNCEMENT : 30.01.2013 ORDER PER DR. S.T.M. PAVALAN, JM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-8, MUMBAI DATED 01.10.2010 FOR THE ASSESS MENT YEAR 2006-07. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. THAT THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD.CIT (A) ERRED IN CONFIRMING ASSESSMENT U/S 144 OF THE INCOME TAX ACT 1961 BY TH E AO. 2. THAT THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT (A) ERRED IN CONFIRMING THE REJECTION BY THE AO OF THE BOOKS OF ACCOUNTS OF ASSESSEE COMPANY AND NOT ACCEPTING THE BOOKS OF ACCOUNTS AND VOUCHERS PRODUC ED. 3. THAT THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT (A) ERRED IN CONFIRMING THE ACTS OF AO OF IMPOUNDING THE VOUCHERS ON THE GR OUND THAT THESE VOUCHERS ARE IN THE NAME OF OTHER COMPANY AND ONE VOUCHER AN D ONE PARTY A/C IS NOT AVAILABLE WITHOUT GIVING ANY OPPORTUNITY BEING HEAR D/ GIVING CLARIFICATION AND FURTHER AS THE AO WAS IN HURRY IN COMPLETING THE AS SESSMENT REJECT THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY. ITA NO.: 9073/MUM/2010 M/S R R EQUITY BROKERS (P) LTD. ASSESSMENT YEAR: 2006-07 2 4. THAT FACT AND CIRCUMSTANCES OF THE CASE THE LD.C IT (A) ERRED IN ACCEPTING THE STAND TAKEN BY THE AO OF COMPARISON OF PROFITABILIT Y OF THE ASSESSEE COMPANY WITH PSJ SECURITIES LTD. AND RAJENDRA K. DALAL SECU RITIES & FINANCE PVT. LTD. WITHOUT CONSIDERING THE FACT THAT THIS IS THE FIRST YEAR OF THE ASSESSEE COMPANY AND IT GOT BSE TICKET ON 03.03.2005 AND NSE TICKET ON 09.09.2005 AND SECOND COMPANY ALSO HAVING CUMULATIVE LOSSES WHICH INDICATE LOSSES IN THE INITIAL YEARS. FURTHER THE INFRASTRUCTURE AND SET UP DIFFERS FROM THE COMPANY TO THE COMPANY. 5. THAT THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT (A) ERRED IN UPHOLDING THE VIEW OF AO THAT THERE IS NO BROKERAGE BUSINESS WITHOUT CONSIDERING THE FACTS THAT IT IS THE FIRST OF THE ASSESSEE COMPANY AND AS SESSING TAXABLE INCOME FROM BROKING BUSINESS RS.18,30,335/- INSTEAD OF LOSS OF RS.57,38,598/- 6. THAT THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, VARY OR AMEND ANY GROUND OF APPEAL. 3. BRIEFLY STATED, THE ASSESSEE, A COMPANY FILED TH E RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.NIL FOR THE ASSESSMENT YEAR 2006 -07. IN THE ASSESSMENT COMPLETED U/S 144, THE AO DETERMINED THE TOTAL INCO ME AT RS.25,31,269/- WHERE IN THE AO MADE AN ADDITION OF RS.18,30,355/-, ON ACCOU NT OF PROFIT OF BUSINESS AND A DISALLOWANCE OF RS.7,00,934 (RS.5,65,594 PLUS RS.1, 35,340) REGARDING LEASE LINE & VSAT CHARGES. 3.1 DURING THE ASSESSMENT PROCEEDINGS, THE AO SENT SEVERAL LETTERS TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS, V OUCHERS AND OTHER SUPPORTING DOCUMENTS FOR THE PURPOSE OF VERIFYING THE CLAIM OF THE ASSESSEE REGARDING THE EXPENSES AND OTHER POINTS THEREON. HOWEVER, THE ASS ESSEE HAD CLAIMED THAT THE REQUIRED DOCUMENTS WERE NOT ABLE TO BE PRODUCED SIN CE THE OFFICE IN DELHI, WHERE THE ASSESSEE KEPT THE ACCOUNTS, WAS SEALED BY MUNIC IPAL CORPORATION OF DELHI DURING THE YEAR 2007. THEREFORE, THE AO HAD PROCEEDED AND COMPLETED THE ASSESSMENT U/S 144 WHEREIN HE MADE THE IMPUGNED ADDITION AND DISAL LOWANCE AS AFOREMENTIONED. 4. ON APPEAL, THE LD.CIT(A), WHILE OBSERVING THAT T HERE WAS NO JUSTIFICATION ON THE PART OF THE ASSESSEE FOR NOT PRODUCING THE ORIG INAL BOOKS OF ACCOUNTS DURING THE ASSESSMENT PROCEEDINGS AS REQUIRED BY THE AO, REJEC TED THE CLAIM OF THE ASSESSEE TO ITA NO.: 9073/MUM/2010 M/S R R EQUITY BROKERS (P) LTD. ASSESSMENT YEAR: 2006-07 3 RELY ON ADDITIONAL EVIDENCE. THUS, THE LD.CIT(A), P ROCEEDED TO DECIDE THE APPEAL ON MERITS AND CONSEQUENTLY, CONFIRMED THE ADDITIONS MA DE BY THE AO EXCEPT THE DISALLOWANCE REGARDING LEASE LINE AND VSAT CHARGES AMOUNTING TO RS.7,00,934/-. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LD.AR HAS CONTENDED THAT THE ASSE SSEE WAS NOT ABLE TO PRODUCE THE BOOKS OF ACCOUNTS AND OTHER RELEVANT DO CUMENT REQUIRED BY THE AO AS THE OFFICE IN DELHI WAS SEALED BY THE MCD WHERE ALL ACCOUNTS/DOCUMENTS WERE MAINTAINED BY THE ASSESSEE AND WHEN ADDITIONAL EVID ENCES WERE FILED BEFORE THE LD.CIT(A), HE HAS NOT ADMITTED THE SAME. ON THE OTH ER HAND, THE LD.DR HAS RELIED ON THE ORDER OF THE AO AND LD.CIT(A) IN SUPPORT THE CASE OF THE REVENUE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , WE FEEL THAT IT IS JUST AND PROPER TO RESTORE THIS ENTIRE APPEAL TO THE FILE OF AO WIT H A DIRECTION TO FRAME A DE NOVO ASSESSMENT AFTER GIVING THE ASSESSEE A REASONABLE O PPORTUNITY OF HEARING AND PLACING ALL THE EVIDENCE ON RECORD WHICH CAN SUPPOR T THE CASE OF THE ASSESSEE. AFTER PROVIDING SUCH REASONABLE AND SUFFICIENT OPPORTUNIT Y TO PRODUCE ALL THOSE NECESSARY EVIDENCE, THE AO WILL FRAME A DE NOVO ASSESSMENT AS PER PROVISIONS OF LAW. WE ORDER AND DIRECT ACCORDINGLY. SINCE WE ARE DIRECTING THE AO TO FRAME DE NOVO ASSESSMENT, WE DO NOT ADJUDICATE THE GROUNDS RAISED BEFORE US S EPARATELY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AS AFOREMENTIONE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2013. SD/- (R.S. SYAL) SD/- (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 30.01.2013 RASIKA* ITA NO.: 9073/MUM/2010 M/S R R EQUITY BROKERS (P) LTD. ASSESSMENT YEAR: 2006-07 4 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T., CONCERNED MUMBAI 4. CIT (A) CONCERNED MUMBAI 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI