MONA FINVEST PRIVATE LIMITED,MUMBAI V. INCOME TAX OFFICER - 10(2)(4), MUMBAI

ITA 3312/MUM/2024

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Mona Finvest Pvt. Ltd. appealed against the order of the Commissioner of Income-tax (Appeals), which confirmed the additions made by the Assessing Officer to the assessee's income for the assessment year 2012-13. The additions were made under sections 144 and 147 of the Income Tax Act, 1961, alleging violations of natural justice and incorrect application of facts and law. The main contentions included the lack of independent reasoning in the CIT(A)'s order, the initiation and conduct of reassessment proceedings without proper jurisdiction, and the erroneous addition of income under section 68 of the Act concerning alleged fictitious long-term capital gains. However, the appeal was rendered infructuous due to the assessee's participation in the 'Vivad Se Vishwas Scheme, 2024', a government initiative aimed at resolving pending tax disputes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24089 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KIRAN UNAVEKAR
• Assessee Lawyers: NISHIT GANDHI
• Keywords: Principle of natural justice; Borrowed satisfaction
• Section: 147; 144; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 3312/MUM/2024 Assessment Year: 2012-13 Mona Finvest Pvt. Ltd., 201, 2nd floor, AZA House, Turner Road, Bandra (W), Mumbai-400050. Vs. ITO-10(2)(4), Aayakar Bhavan, Mumbai-400020. PAN NO. AAACG 9506 G Appellant Respondent Assessee by : Mr. Nishit Gandhi Revenue by : Mr. Kiran Unavekar, Sr. DR Date of Hearing : 09/01/2025 Date of pronouncement : 11/02/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 26.09.2023 passed by the Ld. Commissioner of Income-tax (Appeals), NFAC [in short ‘the Ld. CIT(A)’] for assessment year 2012- 13, raising following grounds: 1. ON NATURAL JUSTICE: 1.1. In the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) [\"the Ld. CIT(A)\"] erred in confirming the action of the Learned Assessing Officer [\"the Ld. AO\"] who in turn made huge additions to the returned income and passed the Assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 [\"the Act\"] in gross violation of principles of natural justice. 1.2. In the facts and ci order passed in Ld. CIT(A) deserves to be quashed since the same is, (1) Sans any independent reasoning whatsoever; and; (ii) is passed in gross violation of principles of natural justice based on extraneous considera relevant, material, considerations and submissions made by the Appellant. 2. ON REASSESSMENT: 2.1 In the facts and circumstances of the case and in law, the impugned re-assessment proceedings are bad in law and void for want of Jur initiation and completion of re Act are not fulfilled in the present case. 2.2 While affirming the impugned re CIT(A) failed to appreciate that: i. The initiation of re mind and in fact the reasons are based on incorrect facts which is also acknowledged by the Ld. AO himself; ii. The entire re the same are conducted in precedents and the re without first disposing off the objections raised by the Appellant; and; iii. In any case, there is no income escaping assessment in the present case and even in the are simply made on assumptions and presumptions; and; iv. The re-opening is simply based on borrowed satisfaction and without any independent application of mind. ITA No. 3312/MUM/202 1.1. In the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) [\"the Ld. CIT(A)\"] erred in confirming the action of the Learned Assessing Officer [\"the Ld. AO\"] who in turn made huge additions to the returned income and passed the Assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 [\"the Act\"] in gross violation of principles of natural justice. 1.2. In the facts and circumstances of the case and in law the order passed in Ld. CIT(A) deserves to be quashed since the same is, (1) Sans any independent reasoning whatsoever; and; (ii) is passed in gross violation of principles of natural justice based on extraneous considerations while ignoring the relevant, material, considerations and submissions made by the Appellant. 2. ON REASSESSMENT: 2.1 In the facts and circumstances of the case and in law, the assessment proceedings are bad in law and void for want of Jurisdiction since the necessary pre- conditions for initiation and completion of re-assessment u/s 147/148 of the Act are not fulfilled in the present case. 2.2 While affirming the impugned re-assessment order, the Ld. CIT(A) failed to appreciate that: e initiation of re-assessment is without any application of mind and in fact the reasons are based on incorrect facts which is also acknowledged by the Ld. AO himself; The entire re-assessment proceedings are bad in law since the same are conducted in violation of the extant judicial precedents and the re-assessment order is directly passed without first disposing off the objections raised by the Appellant; and; iii. In any case, there is no income escaping assessment in the present case and even in the assessment order the additions are simply made on assumptions and presumptions; and; opening is simply based on borrowed satisfaction and without any independent application of mind. Mona Finvest Pvt. Ltd 2 ITA No. 3312/MUM/2024 1.1. In the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) [\"the Ld. CIT(A)\"] erred in confirming the action of the Learned Assessing Officer [\"the Ld. AO\"] who in turn made huge additions to the returned income and passed the Assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 [\"the rcumstances of the case and in law the order passed in Ld. CIT(A) deserves to be quashed since the same is, (1) Sans any independent reasoning whatsoever; and; (ii) is passed in gross violation of principles of natural tions while ignoring the relevant, material, considerations and submissions made by 2.1 In the facts and circumstances of the case and in law, the assessment proceedings are bad in law and void conditions for assessment u/s 147/148 of the assessment order, the Ld. assessment is without any application of mind and in fact the reasons are based on incorrect facts assessment proceedings are bad in law since violation of the extant judicial assessment order is directly passed without first disposing off the objections raised by the iii. In any case, there is no income escaping assessment in the assessment order the additions are simply made on assumptions and presumptions; and; opening is simply based on borrowed satisfaction 2.3 In the facts and circumstances of the case and in law, t impugned re-assessment deserves to be quashed. 3. ON MERITS: 3.1. In the facts and circumstances of the case, and in law the Ld. CIT(A) erred in erred confirming the action of the Ld. AO in making an addition of Rs.6,84,810/ allegation of fictitious long term capital gain. 3.2. While doing so the Ld. CIT(A) failed to appreciate that: i No such capital gain is earned / claimed by the Appellant and in fact the Appellant has incurred a loss in the transaction; ii. The addition made CIT(A) is based on assumptions, presumptions, surmises, conjectures, based on irrelevant and extraneous considerations while ignoring the relevant material, evidences and considerations; iii. Section 68 is not at all by the Ld. AO; and; iv. In any case, the addition is unsustainable being contrary to extant law and without providing the necessary material to the Assessee as relied on by the AO and without granting an opportunity to c relied on; 3.3. In the facts and circumstances of the case and in law the addition made by the Ld. AO as affirmed by the Ld. CIT(A) deserves to be deleted in toto. 2. At the very outset, learned counsel for the that the assessee has opted for the settlement of the tax dispute under the ‘Vivad Se Vishwas Scheme, 2024.’ A copy of Form No. 2, determining the tax liability under the said scheme, has also been placed on record. In light of the asse the present appeal stands dismissed as having become infructuous. ITA No. 3312/MUM/202 2.3 In the facts and circumstances of the case and in law, t assessment deserves to be quashed. 3. ON MERITS: 3.1. In the facts and circumstances of the case, and in law the Ld. CIT(A) erred in erred confirming the action of the Ld. AO in making an addition of Rs.6,84,810/- u/s 68 of the Act on the legation of fictitious long term capital gain. 3.2. While doing so the Ld. CIT(A) failed to appreciate that: i No such capital gain is earned / claimed by the Appellant and in fact the Appellant has incurred a loss in the The addition made by the Ld. AO as confirmed by the Ld. CIT(A) is based on assumptions, presumptions, surmises, conjectures, based on irrelevant and extraneous considerations while ignoring the relevant material, evidences and considerations; Section 68 is not at all applicable to the additions so made by the Ld. AO; and; iv. In any case, the addition is unsustainable being contrary to extant law and without providing the necessary material to the Assessee as relied on by the AO and without granting an opportunity to cross examine the parties whose statements are 3.3. In the facts and circumstances of the case and in law the addition made by the Ld. AO as affirmed by the Ld. CIT(A) deserves to be deleted in toto. At the very outset, learned counsel for the assessee submitted that the assessee has opted for the settlement of the tax dispute under the ‘Vivad Se Vishwas Scheme, 2024.’ A copy of Form No. 2, determining the tax liability under the said scheme, has also been placed on record. In light of the assessee’s request for withdrawal, the present appeal stands dismissed as having become infructuous. Mona Finvest Pvt. Ltd 3 ITA No. 3312/MUM/2024 2.3 In the facts and circumstances of the case and in law, the 3.1. In the facts and circumstances of the case, and in law the Ld. CIT(A) erred in erred confirming the action of the Ld. AO in u/s 68 of the Act on the 3.2. While doing so the Ld. CIT(A) failed to appreciate that: i No such capital gain is earned / claimed by the Appellant and in fact the Appellant has incurred a loss in the by the Ld. AO as confirmed by the Ld. CIT(A) is based on assumptions, presumptions, surmises, conjectures, based on irrelevant and extraneous considerations while ignoring the relevant material, evidences applicable to the additions so made iv. In any case, the addition is unsustainable being contrary to extant law and without providing the necessary material to the Assessee as relied on by the AO and without granting an ross examine the parties whose statements are 3.3. In the facts and circumstances of the case and in law the addition made by the Ld. AO as affirmed by the Ld. CIT(A) assessee submitted that the assessee has opted for the settlement of the tax dispute under the ‘Vivad Se Vishwas Scheme, 2024.’ A copy of Form No. 2, determining the tax liability under the said scheme, has also been ssee’s request for withdrawal, the present appeal stands dismissed as having become infructuous. 3. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 11/02/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 3312/MUM/202 In the result, the appeal of the assessee is dismissed. nounced in the open Court on 11/02/2025. Sd/- (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Mona Finvest Pvt. Ltd 4 ITA No. 3312/MUM/2024 In the result, the appeal of the assessee is dismissed. /02/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "