PRAKASH JETHALAL RAJA PROP OF KINGS TRADE LINKS, MUMBAI v. ADDL CIT 17(1), MUMBAI

ITA 122/MUM/2010 | 2006-2007
Pronouncement Date: 21-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 12219914 RSA 2010
Assessee PAN AAAPR7668F
Bench Mumbai
Appeal Number ITA 122/MUM/2010
Duration Of Justice 1 year(s) 13 day(s)
Appellant PRAKASH JETHALAL RAJA PROP OF KINGS TRADE LINKS, MUMBAI
Respondent ADDL CIT 17(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 21-01-2011
Date Of Final Hearing 13-01-2011
Next Hearing Date 13-01-2011
Assessment Year 2006-2007
Appeal Filed On 07-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI B. RAMAKO TAIAH (AM) ITA NO.122/MUM/2010 ASSESSMENT YEAR :2006-07 PRAKASH JETHALAL RAJA [PROP. OF KINGS TRADE LINKS] 11 THE FLOOR GOLD FILLED GIRNAR TOWER NEXT TO ONGC SION BANDRA LINK ROAD SION WEST MUMBAI-400 017. ..( APPELLANT ) P.A. NO: (AAAPR 7668 F) VS. ADDL. COMMISSIONER OF INCOME TAX RANGE-17(1) MUMBAI. ..( RESPONDENT ) ASSESSEE BY : SHRI MANISH J. UNADKAT DEPARTMENT BY : SHRI S URENDRA KUMAR O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 30.10.2009 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS AS A WHOLESALE DEALER AND COMMISSION AGENT IN CEMENT. THE RETURN WAS FILED DECLARING TOTAL INCOME OF RS.69 89 888/-. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT AS PER INDIVIDUAL BALANCE S HEET OF THE ITA NO.122/M/10 A.Y:06-07 2 ASSESSEE AS ON 31.3.2006 INVESTMENT MADE BY THE ASSESSEE TO HIS CONCERN M/S. KINGS TRADE LINKS AMOUNTS TO RS.1 72 70 459.2 4 WHEREAS ACCORDING TO BALANCE SHEET OF KINGS TRADE LINKS TH E CONTRIBUTION TO CAPITAL AMOUNTS TO RS.1 88 35 360/-. T HUS ACCORDING TO THE ASSESSING OFFICER THERE IS AN EXCESS CREDIT IN M/S. KIN GS TRADE LINKS BY RS.15 64 901/- (RS.1 88 35 360 1 72 70 459/ -) WHICH REMAINS UNEXPLAINED. THE ASSESSEE WAS ASKED TO RECONCILE TH E DIFFERENCE. IN RESPONSE THE ASSESSEE FILED RECONCILIATION STATEMENT WHICH STARTED WITH RS.1 67 05 867/- INSTEAD OF RS.1 88 3 5 360/-. THUS ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE FAILED T O EXPLAIN SATISFACTORILY AS TO HOW SUCH DIFFERENCE AROSE AND ACCORDING LY HE ADDED RS.15 64 901/- AS UNEXPLAINED INVESTMENT U/S.69B OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE AGAIN EXPLAI NED THE ADJUSTMENTS MADE AS PER RECONCILIATION STATEMENT. HOWEV ER ACCORDING TO THE LD. CIT(A) THERE IS NO MENTION OF TH ESE ADJUSTMENTS IN THE ASSESSMENT ORDER AND THE ASSESSING OFFICER HAS CLEARLY STATED THAT THERE IS A MIS-MATCH BETWEEN THE INVESTMENTS APPEA RING IN TWO BALANCE SHEETS AND ACCORDINGLY HE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN GROUND NO.1 THE SUSTEN ANCE OF ADDITION OF RS.15 64 901/-. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) FURTHER SUBMITS THAT DIFFE RENCE AROSE ON ACCOUNT OF THE FACT THAT THE ASSESSEE HAS NOT PASSED CERTAIN E NTRIES IN THE INDIVIDUAL BOOKS FOR WHICH THE ASSESSEE HAS FILED RECO NCILIATION ITA NO.122/M/10 A.Y:06-07 3 STATEMENT COPY OF BOTH THE BALANCE SHEETS ALONG WITH RE CONCILIATION STATEMENT ARE APPEARING AT PAGE 3 4 AND 10 OF THE A SSESSEES PAPER BOOK. HE FURTHER SUBMITS THAT THE ASSESSING OFFICER HAS CONSI DERED THE CAPITAL BALANCE IN KINGS TRADE LINKS AT RS.1 88 35 3 60/- WHEREAS THE CLOSING BALANCE AS PER AUDITED BALANCE SHEET FILED AL ONG WITH RETURN OF INCOME IS RS.1 67 05 867/- MEANING THEREBY THE ASSESSI NG OFFICER HAS NOT CONSIDERED THE TDS RS.11 81 082/- INCOME TAX R S.2 09 472/- FRINGE BENEFIT TAX RS.1 439/- AND ADVANCE TAX RS.8 05 000/- RESULTING IN A NET BALANCE OF RS.1 67 05 867/- AS AGAINST THE BAL ANCE OF RS.1 72 70 459/- IN THE PERSONAL BALANCE SHEET OF THE A SSESSEE WHICH IS TALLIED AS PER RECONCILIATION STATEMENT APPEARING AT PAGE-3 OF ASSESSEE'S PAPER BOOK. HE THEREFORE SUBMITS THAT THE ADDI TION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) BE DELETED. 5. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) . 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS FILED RECONCILIATION STATEMEN T RECONCILING THE FIGURES OF HIS CAPITAL BALANCE IN BOTH OF HIS BALANC E SHEETS AS UNDER:- RECONCILIATION OF CAPITAL AS PER INDIVIDUAL ACCOUN TS AND PROPRIETORY CONCERN AS PER CAPITAL A/C. OF KINGS TRADE LINKS (KTL/PROPRIETORY CONCERN) 16 705 867 [CORRECT B ALANCE] [ENTRIES NOT RECORDED IN INDIVIDUAL BOOKS WHICH OU GHT TO HAVE BEEN RECORDED AS PER THE PROPRIETARY CONCER N] ADD: ADVANCE TAX REDUCED IN PROPRIETORY CONCERN (KTL) N OT CONSIDERED IN INDIVIDUAL ACCOUNTS 805 000 FRINGE BENEFIT TAX NOT CONSIDERED IN INDIVIDUAL ACC OUNTS BUT CONSIDERED IN PROPRIETORY CONCERNS ACCOUNTS 1 439 ITA NO.122/M/10 A.Y:06-07 4 INCOME-TAX (A.Y.2005-06) REDUCED IN KTL BUT NOT CO NSIDERED IN INDIVIDUAL ACCOUNTS 209 472 LESS: DIFFERENCE DUE TO INCORRECT PROFITS SHOWN IN INDIVI DUAL BOOKS AS COMPARED TO THE PROFIT AS PER PROPRIETORY CONCE RN 451 319 BALANCE OF CAPITAL AS PER INDIVIDUAL ACCOUNT 17 270 459 [INCORRECT BALANCE] HOWEVER THE ASSESSING OFFICER AND THE LD. CIT(A) HAVE N OT CONSIDERED THE ABOVE RECONCILIATION STATEMENT IN THE LIGHT OF THE FIGURES APPEARING IN BOTH BALANCE SHEETS OF THE ASSESSEE APPEARING AT PAGE 5 AND 10 OF ASSESSEE'S PAPER BOOK. THIS BEING SO AND KEEPING IN VIEW THAT EVEN AT THIS STAGE THE LD. COUNSEL FOR THE ASSESSEE HAS FAILED TO SHOW AS TO WHETHER THE DIFFERENCE IN PROFIT OF RS.4 15 319/- AS M ENTIONED IN THE ABOVE RECONCILIATION STATEMENT HAS BEEN SHOWN IN THE RET URN OF INCOME OR ACCOUNTED FOR IN THE BOOKS OF ACCOUNT WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FI LE OF THE ASSESSING OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSE D BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK TH E MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE SAM E AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREINABOVE AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE PARTLY ALLOW ED FOR STATISTICAL PURPOSES. 7. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE HAS NOT PRESSED GROUND NO.2 3 4 AND 5 WHICH WAS NOT OBJECTED T O BY THE LD. DR . ITA NO.122/M/10 A.Y:06-07 5 8. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORTING M ATERIAL PLACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE REJECTED BEING NOT PRESSED. 9. IN THE RESULT THE ASSESSEE'S APPEAL STANDS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.1.2011. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 21.1.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.