SEVEN RINGS EDUCATIONS PVT. LTD, Mumbai V. ITO 11(2)(1), Mumbai

ITA 964/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8307 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 20-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.964/M/2019 ASSESSMENT YEAR: 2011-12 M/S. SEVEN RINGS EDUCATION PVT. LTD., PLOT NO.104, BLDG. NO.23, AKASH CO-OP HSG. SOC., MAHADA, OSHIWARA, ANDHERI-WEST, MUMBAI 400 053 PAN: AAACL4819R VS. THE INCOME TAX OFFICER- 11(2)(1), ROOM NO.425, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI AJAY SINGH, A.R. REVENUE BY : SHRI SANDEEP RAJ, D.R. DATE OF HEARING : 02.08.2021 DATE OF PRONOUNCEMENT : 09.08.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 27.12.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE M R. AJAY SINGH SUBMITTED BEFORE THE BENCH THAT THE ASSESSMEN T IN THIS CASE HAS BEEN FRAMED BY MAKING THE ADDITION IN RESP ECT OF ALL CREDITS APPEARING IN THE BANK STATEMENT AS THE BOOK S OF ACCOUNTS OF THE ASSESSEE WERE SEIZED BY ECONOMIC OF FICE WING, MUMBAI SINCE 2011 AND THEREFORE THE INFORMATION AS DESIRED BY THE AO COULD NOT BE FURNISHED. MR. AJAY SINGH ALSO BROUGHT TO ITA NO.964/M/2019 M/S. SEVEN RINGS EDUCATION PVT. LTD. 2 THE NOTICE OF THE BENCH THAT THERE ARE SOME INSTANC ES OF INCOME WHICH HAVE BEEN ADDED AND TAXED TWICE. THE LD COUNS EL CITED THE EXAMPLE OF MONEY RECEIVED OF RS.25,70,01,001/- FROM M/S. TULSIYAT TEK PRIVATE LIMITED WHICH WERE PUT INTO SH ORT TERM FIXED DEPOSITS. THE LD. A.R. SUBMITTED THAT THIS MONEY W AS ADDED TO THE INCOME OF THE ASSESSEE TWICE FIRST WHEN THIS MO NEY WAS RECEIVED AND SECONDLY WHEN THE FIXED DEPOSITS WERE MATURED AMOUNTING TO RS.28,36,64,972/-. THE LD. A.R. SUBMI TTED THAT THE MAIN PERSON WHO PROMOTED THIS COMPANY SHRI MANO J KUMAR SHARMA EXPIRED ON 03.03.2014 AND THEREAFTER HIS WIF E MRS. RENU SHARMA WAS RUNNING THE COMPANY. THE LD. A.R. SUBMITTED THAT EVEN MRS. SHARMA WAS ARRESTED BY ECO NOMIC OFFICE WING, MUMBAI AS ON 05.10.2016 IN FIR NO.153/ 2011 AND FINALLY GOT BAIL ON 17.02.2017 FROM THE HONBLE BOM BAY HIGH COURT. THE LD. A.R., THEREFORE, HUMBLY PRAYED BEFO RE THE BENCH THAT SINCE THE ADDITION HAS BEEN MADE WITHOUT REFER ENCE TO BOOKS OF ACCOUNTS ADDING ALL CREDITS APPEARING IN T HE BANK STATEMENTS OF THE ASSESSE AS THE BOOKS WERE NOT AVA ILABLE DUE TO THE REASONS WHICH CAN NOT BE ATTRIBUTED TO THE ASSE SSEE. THEREFORE, THE LD COUNSEL PRAYED THAT IT WOULD BE I N THE INTEREST OF JUSTICE, IF THE CORRECT INCOME IS ASSESSED IN TH E HANDS OF THE ASSESSEE AFTER TAKING INTO ACCOUNT THE CORRECT INCO ME OF THE ASSESSEE AS PER THE BOOKS OF ACCOUNTS OF THE ASSESS EE WHICH COULD NOT BE FURNISHED BEFORE THE AO DUE TO THE REA SON AS STATED HEREINABOVE. WHEN THE BENCH ASKED THE LD. D.R. ABO UT HIS OBJECTION TO THE CONTENTIONS OF THE LD. A.R. HE STR ONGLY SUBMITTED THAT THE BOOKS OF ACCOUNTS OF THE ASSESSE E WERE NOT PRODUCED BEFORE THE AO DURING THE ASSESSMENT PROCEE DINGS DESPITE SEVERAL OPPORTUNITIES AND FINALLY THE ASSES SMENT HAS ITA NO.964/M/2019 M/S. SEVEN RINGS EDUCATION PVT. LTD. 3 BEEN FRAMED ON THE BASIS OF AVAILABLE INFORMATION P RIMARILY THE BANK STATEMENTS OF THE ASSESSEE, HOWEVER, LEFT THE DECISION TO THE WISDOM OF THE BENCH ON THE ISSUE OF SETTING ASI DE. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING TH E MATERIAL ON RECORD, WE FIND THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF TOTAL CREDITS APPEARING IN THE BANK ACCOUNTS OF THE ASSESSE WHICH IN NO WAY IS THE CORRECT WAY OF ASSESSING THE INCOME THOUGH FOR THE WANT OF BOOKS OF THE ACCOUNTS WHICH WERE NOT PRODUCED BEFORE THE AO BECAUSE THE SAME WERE SEIZED BY THE ECONOMIC OFFENSE WING, MUMBAI. WE ALSO NOTE THAT MO NEY RECEIVED FROM M/S. TULSIYAT TEK PRIVATE LIMITED RS.25,70,01,001/-WAS PUT INTO THE SHORT TERM FIXED DEPOSITS WAS ADDED TO THE INCOME OF THE ASSESSEE. WE NOTE THAT T HE ASSESSEE HAS REPAID THE AMOUNT TO M/S. TULSIYAT TEK PRIVATE LIMITED ON 31.03.2011 AMOUNTING TO RS.25,24,36,435/- WHICH WAS IGNORED BY THE AO, HOWEVER, THE MATURITY PROCEEDS RECEIVED OF RS.28,36,64,972/- UPON MATURITY OF SHORT TERM FIXED DEPOSITS WAS ADDED TO THE INCOME OF THE ASSESSEE WHICH HAS R ESULTED INTO ADDITION OF THE SAME AMOUNT TWO TIMES FIRST WHEN TH E LOAN WAS RECEIVED AND SECONDLY WHEN THE SHORT TERM FIXED DE POSITS MATURED AND CREDITED IN THE BANK ACCOUNT. WE NOTE THAT THESE MISTAKES WERE POINTED OUT BEFORE LD. CIT(A) BUT UNF ORTUNATELY LD. CIT(A) HAS NOT GIVEN ANY FINDING ON THESE ISSUE S AND NOT ADDRESSED THESE ISSUES. MOREOVER, WE FIND THAT THE PERSON WHO IS LOOKING AFTER THE COMPANY MRS. RENU SHARMA WAS A LSO ARRESTED IN 2016 AND RELEASED ON BAIL ON 17.02.2017 BY THE BOMBAY HIGH COURT AND THEREFORE THE NECESSARY DETAILS/INFORMATIONS COULD NOT BE FURNISHED BEFORE THE AO. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ENDS OF ITA NO.964/M/2019 M/S. SEVEN RINGS EDUCATION PVT. LTD. 4 JUSTICE WOULD BE MET IF THE ISSUE IS RESTORED TO TH E FILE OF THE AO WITH THE DIRECTION TO ASSESS THE CORRECT INCOME OF THE ASSESSEE ON THE BASIS OF BOOKS OF ACCOUNTS AND OTHER EVIDENC ES. THE ASSESSEE IS DIRECTED TO CO-OPERATE BEFORE THE AO AN D PRODUCE THE NECESSARY BOOKS OF ACCOUNTS, BILLS, VOUCHERS ETC. S O THAT THE ASSESSMENT COULD BE MADE BASED ON THE RECORDS AND B OOKS OF ACCOUNTS OF THE ASSESSEE. ACCORDINGLY, WE SET ASID E THE APPEAL TO THE FILE OF THE AO WITH THE DIRECTION TO FRAME T HE ASSESSMENT DENOVO AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ALSO DIRECT THAT THE ASSESSE SHALL NOT PART WITH OR SELL ANY OF ITS PROPERTIES DURING THIS PERIOD. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09.08.2021. SD/- SD/- ( PAVAN KUMAR GADALE) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 09.08.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.