PREMIER LIMITED , MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX 3(2)(2), MUMBAI

MA 729/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6646 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 13-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: JAYESH DEDIA
• Keywords: Depreciation; Deemed to accrue or arise in india; Tax effect; Onus to prove; Retraction; Revenue expenditure
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) MA NO. 729/MUM/2017 (ITA NO. 1357/MUM/2016) ASSESSMENT YEAR: 2007 - 08 & MA NO. 730/MUM/2017 (ITA NO. 1566/MUM/2016) ASSESSMENT YEAR: 2010 - 11 DCIT - 3(2)(2) 6 TH FLOOR, R. NO. 674 AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400020. VS. M/S PREMIER LTD. 58 NARIMAN POINT MUMBAI - 400021 PAN NO. AAACT5523G APPELLANT RESPONDENT ASSESSEE BY : MR. JAYESH DEDIA, AR REVENUE BY : MR. V. VIDHYADHAR, DR DATE OF HEARING : 06/04/2018 DATE OF PRONOUNCEMENT : 02/05/2018 ORDER PER N.K. PRADHAN, AM BY THIS MISCELLANEOUS APPLICATION (MA), THE ASSESSEE SUBMITS THAT THE TRIBUNAL MAY SUITABLY AMEND ITS FINDINGS ON WHETHER ADDITION IS SUSTAINABLE U/S 69A OF THE ACT OR NOT IN ITA NO. 1357/MUM/2016 FOR ASSESSMENT YEAR ( AY ) 2007 - 08 AND ITA N O. 1566/MUM/2016 FOR AY 2010 - 11 . M/S PREMIER LTD. MA NOS. 729 & 730/MUM/2017 2 2. THE LD. COUNSEL SUB MITS THAT THE MAIN ISSUE RAISED BY THE DEPARTMENT IN ITS APPEAL IS REGARDING DELETION OF ADDITION OF RS.3,75,03,182/ - MADE U/S 69A OF THE ACT FOR AY 2007 - 08 AND RS.16,85,44,684/ - FOR AY 2010 - 11 AND THUS THE ISSUE INVOLVED IS AGAINST DEEMED INCOME AND NOT D ISALLOWANCE OF EXPENSES U/S 37 OF THE ACT. IT IS STATED THAT IN THE ABOVE ORDER OF THE TRIBUNAL, THERE IS NO FINDING WHETHER PROVISIONS OF SECTION 69A HAS BEEN RIGHTLY INVOKED OR NOT AND WHETHER THE ADDITION IS RIGHTLY DELETED BY THE LD. CIT(A) OR NOT. FUR THER, IT IS STATED THAT THE TRIBUNAL HAS RELIED UPON THE STATEMENTS OF MR. MAITREYA V. DOSHI AND MR. K.S. NAIR, WHERE IT WAS ADMITTED THAT IT IS AN ACCOMMODATING ENTRY . HOWEVER, THE TRIBUNAL HAS FAILED TO CONSIDER THE RETRACTION STATEMENTS OF MR. DOSHI AND MR. NAIR BEFORE THE ASSESSING OFFICER ( AO ) . THEREFORE, THEIR STATEMENTS HAVE NO RELEVANCE AS THE SAME WERE SUBSEQUENTLY RETRACTED AND NEITHER THE AO NOR THE DR HAS DISPUTED THE RETRACTION. IT IS STATED THAT THE DECISION IN CIT V. CALCUTTA AGENCY 19 ITR 191 (SC) AND NUND & SAMONT CO. (P) LTD. V. CIT 78 ITR 268 (SC) ARE NOT RELEVANT TO THE PRESENT CASE. IT IS ALSO STATED THAT THE ONUS IS ON THE AO TO PROVE THAT THE ASSESSEE WAS IN POSSESSION OF CASH WHICH ATTRACTS ADDITION U/S 69A. THUS IT IS SUBMI TTED THAT THE TRIBUNAL MAY SUITABLY AMEND ITS FINDINGS AFTER CONSIDERING A CORRECT FACTS OF THE CASE AND GIVE FINDINGS ON WHETHER THE ADDITION IS SUSTAINABLE U/S 69A OR NOT. ALTERNATIVELY, IT IS ARGUED THAT THE TRIBUNAL MAY RECALL ITS ORDER FOR FRESH ADJU DICATION. 3. THE LD. DR SUBMITS THAT THE AS THE TRIBUNAL HAS SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE D THE MATTER TO THE FILE OF THE AO, THERE IS NO MISTAKE IN THE ORDER PASSED BY IT. M/S PREMIER LTD. MA NOS. 729 & 730/MUM/2017 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE RELEVANT PARA WHICH DELINEATES THE DECISION OF THE TRIBUNAL IS PRODUCED BELOW: 7.1 WE FIND THAT SHRI MAITREYA V. DOSHI, THE CHAIRMAN AND MANAGING DIRECTOR OF THE ASSESS EE - COMPANY HAS GONE THROUGH THE STATEMENT OF SHRI K.S. NAIR, GENERAL MANAGER (FINANCE & ACCOUNTS) AND ADMITTED THAT THE TRANSACTIONS WITH THE CONCERNED PARTIES WERE ONLY ADJUSTMENT ENTRIES. SHRI DOSHI HAS STATED THAT THE AMOUNT UNDER THE HEAD CAPITAL EXPEN DITURE AMOUNTING TO RS. 30,67,76,084/ - HAS NOT BEEN CLAIMED AS REVENUE EXPENDITURE IN ANY OF THE YEARS. HE PROMISED TO WITHDRAW THE DEPRECIATION THAT HAS BEEN CLAIMED WRONGLY ON CAPITALISED ASSET TILL DATE AND ALSO PROMISED TO WITHDRAW THE CONCERNED CAPITA LISATION AND NOT TO CLAIM ANY FURTHER DEPRECIATION ON THAT AMOUNT. SHRI DOSHI HAS ALSO STATED THAT (I) THE AMOUNT OF RS. 14,60,42,078/ - ON ACCOUNT OF PURCHASE OF TRADING GOODS IS A TAX NEUTRAL, (II) THE AMOUNT OF RS. 1,44,54,564/ - BOOKED UNDER THE HEAD CON SUMABLES IN THE P&L ACCOUNT SHALL BE REVERSED IN THE RESPECTIVE YEARS AND TAXES, IF ANY SHALL BE PAID ON THE SAME AND (III) THE AMOUNT OF RS. 9,07,83,728/ - UNDER THE HEAD LAND DEVELOPMENT EXPENSES INCURRED FOR DOMBIVALI LAND HAS NO TAX EFFECT. SHRI DOSHI WAS THE CHAIRMAN AND MANAGING DIRECTOR OF THE ASSESSEE - COMPANY DURING THE RELEVANT PERIOD. HIS STATEMENT IS OF SEMINAL VALUE. HE HAS GIVEN THE ABOVE STATEMENT AFTER PERUSING THE STATEMENT GIVEN BY SHRI K.M. NAIR, GENERAL MANAGER (FINANCE & ACCOUNTS) OF THE COMPANY. WE FIND THAT NEITHER THE A.O. NOR THE LEARNED CIT(A) HAS DONE PROPER ANALYSIS OF THE ABOVE STATEMENT OF SHRI DOSHI. THE ASSESSEE HAS ALSO FAILED TO FILE THE COMPLETE DETAILS BEFORE THE A.O. TO SUBSTANTIATE THE STATEMENT OF SHRI DOSHI. IN CIT VS. CALCUTTA AGENCY LTD . (1951) 19 ITR 191 (SC), IT HAS BEEN HELD THAT THE BURDEN OF PROVING THE NECESSARY FACT IN ORDER TO ENTITLE THE ASSESSEE TO MAKE A CLAIM IS ON THE ASSESSEE. THE SAME RATIO HAS BEEN REITERATED IN M/S PREMIER LTD. MA NOS. 729 & 730/MUM/2017 4 NUND & SAMONT CO. (P) LTD. VS. CIT (1970) 78 ITR 268 (SC). THE BURDEN OF PROOF IS LIMITED TO PRIMARY OR INITIAL ONUS. ON C E SUCH PRIMARY ONUS IS DISCHARGED, SUCH BURDEN SHIFTS TO REVENUE. WE FIND THAT IN THE INSTANT CASE THE ASSESSEE HAS NOT DISCHARGED THE PRIMARY ONUS. IN VIEW OF THE ABOVE , THE ORDER OF THE LEARNED CIT(A) IS SET ASIDE AND THE CASE IS RESTORED TO THE FILE OF THE A.O. WITH A DIRECTION TO MAKE AN ORDER AFRESH AS PER THE PROVISIONS OF THE ACT AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE STATEMENT OF SHRI MAITREYA V. DOSHI. THE ASSESSEE IS DIRECTED TO FILE THE RELEVANT DETAILS BEFORE THE A.O. THUS THE 1ST, 2ND AND 3RD GROUND OF APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 4.1 THE DECISION IN CALCUTTA AGENCY LTD . (SUPRA) AND NUND & SAMONT CO. (P) LTD . (SUPRA) SPEAK ABOUT THE BURDEN OF PROOF. IT HAS RELEVANCE IN THE PRESENT CASE. IN THE INSTANT CASE, THE MATTER HAS BEEN RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO MAKE AN ORDER AFRESH AS PER THE PROVISIONS OF THE ACT AFTER GIVING A REASONABLE OPPO RTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE STATEMENT OF SHRI MAITREYA V. DOSHI. THE GROUNDS OF APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. AS CAN BE SEEN FROM THE ABOVE FACT S, THERE IS NO MISTAKE APPARENT FROM RECORD. 5. IN THE RESULT, THE MISCELLANEOU S APPLICATIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/05/2018 . SD/ - SD/ - ( SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 02/05/2018 RAHUL SHARMA, SR. P.S. M/S PREMIER LTD. MA NOS. 729 & 730/MUM/2017 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI