UZURI JEWELS P.LTD, MUMBAI V. ITO WD 11(1)(4), MUMBAI

MA 120/MUM/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5470 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 28-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Tax effect; Bogus loan
• Section: 254(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M.A. NO. 120/MUM./2021 ( ARISING OUT OF ITA NO. 3605 / MUM . / 20 1 7 ) ( ASSESSMENT YEAR : 20 12 13 ) M/S. UZURI JEWELS PVT. LTD. 17 18, APOLLO INDUSTRIAL ESTATE OFF MAHAKALI CAVES ROAD MUMBAI 400 093 PAN AABCU0883D . APPLICANT (ORIGINAL RESPONDENT) V/S INCOME TAX OFFICER WARD 11(1)(4), MUMBAI . RESPONDEN T (ORIGINAL APPELLANT) ASSESSEE BY : SHRI HARESH P. SHAH REVENUE BY : SHRI VIJAY KUMAR MENON DATE OF HEARING 13 . 0 8 .20 21 DATE OF ORDER 13.9.21 O R D E R PER S. RIFAUR RAHMAN , A.M. BY WAY OF THIS MISCELLANEOUS APPLICATION, THE ASSESSEE SEEKS RECALL OF THE ORDER AND/OR RECTIFICATION OF THE ORDER DATED 28 TH FEBRUARY 2020, PASSED BY THE CO ORDINATE BENCH OF THIS TRIBUNAL IN AN APPEAL FILED BY THE REVENUE BEING ITA NO.3605/MUM./2017, FOR THE ASSESSMENT YEAR 2012 13. 2. THE CONTENTIONS OF THE LEARNED AUTHORIS ED REPRESENTATIVE FOR THE ASSESSEE ARE REPRODUCED BELOW: THE ABOVE APPEAL WAS DISPOSED OF BY THE TRIBUNAL BY ITS ORDER DATED 28 TH FEB., 2020 AND THE SAME WAS RECEIVED ON 9 TH NOV 2 M/S. UZURI JEWELS PVT. LTD. 20 20 [COPY ENCLOSED AT PAGE NO I AS ANNEXURE 'A']. BRIEFLY, IN THE SAID APPEAL THE DEPARTMENT [APPELLANT - NOW RESPONDENT IN THIS VERY APPLICATION U/E. 254(2) OF THE ACT] HAD RAISED, INTERALIA, GROUND NO. 3 WITH REGARD TO DELETION OF INTEREST RS. 5,85,000/ - PAID TO MS. A2 JEWELS RS.2,50,000/ - AND TO MIS. MA XIM GEMS RS. 4,00,000/ - DISALLOWANCE BY THE LEARNED CIT(A) - 18, MUMBAI. THE HON'BLE TRIBUNAL, BENCH 'F' AT PARA 12.5 HELD AS UNDER - '12.5 WITH REGARD TO GROUND NO. 3 & 4, WE NOTICE THAT REVENUE IS IN APPEAL WITH REGARD TO INTEREST ON LOANS AND ADVANCES TAKEN FROM BHANWARLAL LAIN GROUP IN THE A V 2010 - 11 AND IN THIS ASSESSMENT YEA R THE ADDITION OF INTEREST EXPENDITURE, WE NOTICE THAT LD. CIT(A) DELETED THIS ADDITION WITH OBSERVATION THAT A.O. HAS REJECTED THE BOOKS OF ACCOUNT AND THE SAME BOOK RESULTS CANNOT BE CONSIDERED FOR MAKING THIS ADDITION. WE ARE NOT IN AGREEMENT WITH THE OBSERVATION OF LD. CJT(A) AND LD. CIT('A) HAS DELETED MOST OF THE ADDITIONS BASED ON THE BOOK RESULTS, THEREF O RE WE ARE NOT INCLINED TO ACCEPT THE DELETION ON ACCOUNT OF INTERE ST PAYMENT ON ALLEGED BOGUS LOANS. WE DO NOT KNOW THE OUTCOME OF THE APPEAL FILED BY THE ASSESSEE IN A Y 2010 - 11, IT ALL DEPENDS UPON THE FINDINGS IN ABOVE SAID APPEAL. BEFORE US, LD. AR HAS NOT MADE ANY SUBMISSION. MOREOVER, WE NOTICE THAT ASSESSEE HAS ON LY CREDITED THE INTEREST AND NOT ACTUALLY PAID. THEREFORE, WE ARE INCLINED TO SUSTAIN THE ADDITION MADE BY AO. ACCORDINGLY, GROUND RAISED IN THIS REGARD IS SUSTAINED' ON THE FACTS & CIRCUMSTANCES, YOUR APPLICANT [RESPONDENT] WITH TO STATE THAT THERE IS AN APPARENT MISTAKE WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 254(2) OF THE ACT IN CONFIRMING THE DISALLOWANCE BY NOT ACCEPTING THE FINDING OF THE LEARNED CIT(A) WHO DELETED THE ADDITION BECAUSE IT WAS NOT SUSTAINABLE AFTER REJECTING BOOK RESULTS. AND FURTHER, AFTER OBSERVING THAT THE OUTCOME OF THE APPEAL NOT KNOWN..., HELD THAT 'IT ALL DEPENDS UPON THE FINDING ..' IN THE CIRCUMSTANCES, IN THE INTEREST OF JUSTICE IT OUGHT TO HAVE BEEN SET - ASIDE. ON THE FACTS AND CIRCUMSTANCES, IT IS HUMBLY POINTED OUT THAT THE ALLEGED ADDITION OF RS.65,00,000/ - , BEING DISTRIBUTERS DEPOSIT FROM MS.A2 JEWELS RS.2,50,000/ - AND TO M/S. MAXIM GEMS RS. 4,00,000/ - WAS DELETED BY THE LEARNED CIT(A) IN THE A.Y. 2010 - 11 [CO PY ENCLOSED AT PAGE NO 27 AS ANNEXURE 'B'] AGAINST WHICH THE DEPARTMENT HAD FILED APPEAL BEFORE THE H ON' B LE ITAT, MUMBAI VIDE ITA NO.6203/MUM/2017 WHICH WAS FINALLY DISMISSED VIDE ORDER DATED 19 TH SEPT, 2019 [COPY ENCLOSED AT PAGE NO 34 AS 3 M/S. UZURI JEWELS PVT. LTD. ANNEXURE 'C'] ON THE GROUND OF MAINTAINABILITY IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019 IN F.NO.279/MISC. 142/2007 - ITJ (PT). THUS, THE FACTS REMAIN THAT THE ADDITION OF RS. 65,00,000/ - IN THE A. Y. 2010 11 IS CONFIRMED TO BE DELETED AND THEREFORE, IT IS B ONAFIDELY BELIEVED THAT THE ADDITION ON ACCOUNT OF CONSEQUENTIAL DISALLOWANCE IN THE YEAR UNDER CONSIDERED WAS UNJUSTIFIED AND UNSUSTAINABLE. ON THE FACTS AND CIRCUMSTANCES & IN LAW, IT IS BONAFIDELY BELIEVED THAT THERE IS AN APPARENT MISTAKE WITHIN THE P URVIEW OF THE PROVISIONS OF SECTION 254(2) OF THE ACT. HOWEVER. IT IS HUMBLY PRAYED THAT THE IMPUGNED ORDER MAY BE RECTIFIED BY DELETING THE ALLEGED ADDITION OF ON ACCOUNT OF THE DISALLOWANCE OF INTEREST OF RS. 5,85,000/ - CONSEQUENT TO THE ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED LOANS OF RS. 65,00,000/ - IN THE A.Y. 2010 11, OR ALTERNATIVELY, IF IT IS DEEMED FIT AND PROPER, IT MAY BE RECALLED & OBLIGE . [ EMPHASIS SUPPLIED ] 3. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE WHILE SUBSTANTIATING HIS ARGUMENTS ON THE BASIS OF THE CONTENTS OF THE MISCELLANEOUS APPLICATION AS REPRODUCED ABOVE, PRAYED THAT IN THE ALTERNATIVE OF THE AFORESAID, IF THIS HONBLE BENCH DEEM FIT AND PROPER, THE IMPUGNED ORDER DATED 28 TH FEBRUARY 2020, PASSED IN ITA NO. 3605/MU M./2017, BE RECALLED FOR A LIMITED PURPOSE OF DECIDING GROUND NO.3, ON MERIT. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE O N THE OTHER HAND HAS NOT BROUGHT ON RECORD ANY MATERIAL BEFORE THE BENCH WHICH ARE CONTRARY TO THE ARGUMENTS OF THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE. 5. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN VIEW OF THE ARGUMENTS OF EITHER PARTY, THIS BENCH HAS COME 4 M/S. UZURI JEWELS PVT. LTD. TO A CONCLUSION WITH THE OBSERVATIONS THAT THE LEARNED CIT(A) HAS DELETED MOST OF THE ADDITIONS BASED ON THE BOOK RESULTS AND THE BENCH HAS OBSERVED THAT THE OUTCOME OF THE APPEAL FILED BY THE REVENUE IN THE ASSESSMENT YEAR 2010 11, WHICH IS PENDING FOR DISPOSAL AND IT ALL DE PENDS ON THE FINDINGS OF THE ABOVE PENDING APPEAL BEFORE THE TRIBUNAL . IT IS ALSO BROUGHT TO THE NOTICE OF THIS BENCH THAT THE AFORESAID REVENUES APPEAL FOR THE ASSESSMENT YEAR 2010 11 WAS DISMISSED DUE TO LOW TAX EFFECT. WE OBSERVE THAT THE DECISION OF THE BENCH IS BASED ON THE OUTCOME OF THE OTHER ASSESSMENT YEARS WHICH HAS NOT BEEN CHALLENGED BEFORE THE TRIBUNAL IN THIS ASSESSMENT YEAR. CONSEQUENTLY, WE DEEM IT FIT AND PROPER TO RECALL THE ORDER DATED 28 TH FEBRUARY 2020, PASSED IN ITA NO.3605/MUM./2017 , FOR THE ASSESSMENT YEAR 2012 13, FOR A LIMITED PURPOSE OF DECIDING ONLY ISSUE IN GROUND NO.3, RAISED BY THE REVENUE ON MERIT. THE REGISTRY IS DIRECTED TO FIX THIS APPEAL IN DUE COURSE AND ISSUE NOTICES TO THE EITHER PARTY ACCORDINGLY. 6. IN THE RESULT, MISCELLANEOUS APPLICATION IS ALLOWED IN TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 13.9.21 SD/ - PAVAN KUMAR GADALE JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 13.9.21 5 M/S. UZURI JEWELS PVT. LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI