DAGINA COLLECTION P. LTD, MUMBAI v. DCIT CIR 5(1), MUMBAI

ITA 2302/MUM/2009 | 2003-2004
Pronouncement Date: 30-04-2010

Appeal Details

RSA Number 230219914 RSA 2009
Assessee PAN AAACL0915L
Bench Mumbai
Appeal Number ITA 2302/MUM/2009
Duration Of Justice 1 year(s) 17 day(s)
Appellant DAGINA COLLECTION P. LTD, MUMBAI
Respondent DCIT CIR 5(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Bench Allotted D
Date Of Final Hearing 03-03-2010
Next Hearing Date 03-03-2010
Assessment Year 2003-2004
Appeal Filed On 13-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D BEFORE SHRI N.V. VASUDEVAN (JM) & B. RAMAKOTAIAH (A M) I.T.A.NO. 2302/MUM/2009 (ASSESSMENT YEAR : 2003-04 ) M/S. DAGINA COLLECTION PVT. LTD. 611/612 PAREKH MARKET 6 TH FLOOR 39 J.S. S. ROAD OPERA HOUSE MUMBAI-400 004. VS. DCIT CIRCLE 5(1) AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. APPELLANT RESPONDENT PAN/GIR NO. : AAACL0915L ASSESSEE BY : SHRI JITENDRA JAIN DEPARTMENT BY : SHRI T.T. JACOB ORDER PER N.V. VASUDEVAN JM :- THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 19.1.2009 OF LEARNED CIT(A)-V MUMBAI RELATING TO A .Y. 2003-04. 2. GROUND NO. 1 RAISED BY THE ASSESSEE READS AS FOL LOWS :- 1A) LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION O F ACIT BY TREATING THE CASH DEPOSITED INTO ORIENTAL BANK OF C OMMERCE OF RS. 4 00 000/- DENA BANK OF RS. 7 40 000/- AND ABN AMRO BANK OF RS. 11 00 000/- AGGREGATING TO RS. 22 40 000/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF T HE I.T. ACT. THE APPELLANT SUBMITS THAT IT HAS DEPOSITED THE CAS H INTO BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE DENA BANK AND ABN AMRO BANK OUT OF CASH BALANCE AVAILABLE AS PER BOOKS OF ACCOUNT AND HENCE THE ADDITIONS MADE BY THE ASSESSING OFFICER SHALL BE DE LETED. B) THE LEARNED CIT(A) ERRED IN NOT ADMITTING THE AD DITIONAL EVIDENCE IN THE FORM OF CASH BOOK U/R. 46A IN THE I NTEREST OF NATURAL JUSTICE. YOUR APPELLANT SUBMIT THAT THE ASS ESSING OFFICER HAS NOT AFFORDED ANY OPPORTUNITY TO THE APP ELLANT TO EXPLAIN THE SOURCE OF CASH DEPOSITED INTO BANK AND MADE ADDITION OF CASH CREDIT U/S. 68 OF THE I.T. ACT AND HENCE M/S. DAGINA COLLECTION PVT. LTD. 2 LEARNED CIT(A) OUGHT TO HAVE ADMITTED ADDITIONAL EV IDENCES TO DECIDE THE ISSUE ON MERIT. 3. ASSESSEE IS A COMPANY. IT IS ENGAGED IN THE BUSI NESS OF MANUFACTURING AND TRADING IN JEWELLERY AND DIAMONDS . IN COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER CALLE D FOR INFORMATION U/S. 133(6) OF THE ACT FRO VARIOUS BANKS. ON PERUSAL OF SUCH DETAILS NAMELY STATEMENT OF BANK ACCOUNT OF ORIENTAL BANK OF COMME RCE DENA BANK AND ABN AMRO BANK THE ASSESSING OFFICER NOTICED TH AT THE ASSESSEE HAD MADE CASH DEPOSITED TO THE TUNE OF RS. 4 LAKHS RS. 7 40 000/- AND RS. 11 LAKHS RESPECTIVELY. INFORMATION OBTAINED BY THE ASSESSING OFFICER ON 17.3.2006. THE ASSESSEE HAD NOT PRODUCED BOOKS OF A CCOUNTS AUDIT REPORT SUPPORTING BILLS AND VOUCHERS. THE ASSESSEE HAD FILED BOOKS OF ACCOUNT AUDIT REPORT AND REVISED COMPUTATION OF IN COME ONLY ON 27.3.2006. IN THE PROCEEDINGS ON 26.3.2006 THE ASS ESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNT. INFORMATION RECEIVED FROM BANKS BY THE ASSESSING OFFICER WAS NOT DISCLOSED TO THE ASSESSEE . THEREAFTER ASSESSMENT WAS COMPLETED IN WHICH THE ASSESSING OFF ICER TREATED THE AFORESAID CASH DEPOSITS IN VARIOUS BANK ACCOUNT AND UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 4. BEFORE LEARNED CIT(A) THE ASSESSEE SUBMITTED TH AT NO OPPORTUNITY WAS GIVEN TO IT TO EXPLAIN CASH DEPOSITS IN THE BAN K ACCOUNT. THE ASSESSEE SUBMITTED THAT CASH BOOK MAINTAINED BY THE ASSESSEE CLEARLY EXPLAIN SOURCES OF CASH WHICH WERE DEPOSITED IN TH E BANK ACCOUNT. THE ASSESSEE EXPLAINED THAT IT MADE CASH SALES OF JEWEL LERY AND CASH WERE REALIZED WAS DEPOSITED IN THE BANK ACCOUNT. LEARNED CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. IN REMAND REPORT THE ASSESSING OFFICER SUBMITTED THAT ON 10.3.2006 INFO RMATION WAS GATHERED AND THE SAME WAS CONFRONTED TO THE AR OF THE ASSESS EE ON 24.3.2006. ON 24.3.2006 THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO SUBMIT EXPLANATION ON 27.3.2006. ON 27.3.2006 LEARNED AR PRODUCED BOO KS OF ACCOUNT BUT DID NOT GIVE ANY EXPLANATION WITH REGARD TO SOURCE OF CASH DEPOSITED IN M/S. DAGINA COLLECTION PVT. LTD. 3 BANK ACCOUNT; AND THEREFORE ASSESSMENT WAS MADE. O RDER OF ASSESSMENT IS DATED 29.3.2006. 5. LEARNED CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAD ENOUGH OPPORTUNITY BEFORE THE ASSESSING OFFICER; AND THERE FORE THERE WAS NO NEED TO PERMIT THE ASSESSEE TO FILE ADDITIONAL EVID ENCE. HE WAS ALSO OF THE VIEW THAT THE ASSESSING OFFICER DID NOT CONFRONT MA TERIAL WHICH HE OBTAINED BY MAKING INQUIRY TO THE ASSESSEE BECAUSE THE ASSESSING OFFICER WANTED TO VERIFY DETAILS FROM THE CASH BOOK OF THE ASSESSEE WITHOUT GIVING CHOICE TO COVER UP ANY LAPSES. LEARNED CIT(A) THER EFORE REFUSED TO ADMIT ADDITIONAL EVIDENCE FILED BEFORE HIM. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN OUR VIEW ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY THE ASSESSEE OUGHT T O HAVE BEEN ACCEPTED BY THE LEARNED CIT(A). UNDER RULE 46A(4) COMMISSIO NER ENHANCED POWER TO ADMIT ADDITIONAL EVIDENCE TO ENABLE HIM TO DISPO SE OF THE APPEAL. EVEN OTHERWISE IN OUR VIEW OPPORTUNITY AFFORDED TO THE ASSESSEE WAS NOT REAL AND SUBSTANTIAL OPPORTUNITY. IT IS ONLY ON 24.3.200 6 THAT THE ASSESSEE WAS INFORMED ABOUT THE CASH DEPOSITED IN THE BANK A CCOUNT. ON 27.3.2006 THE ASSESSEE FILED AUDITED BOOKS OF ACCO UNT AND THEREAFTER THERE WERE NO HEARING AND THE ORDER OF ASSESSMENT W AS PASSED ON 29.3.2009. IN HEARING ON 27.3.2006 THERE IS NO ORD ER-SHEET ENTRY WITH REGARD TO THE ASSESSING OFFICER CALLING FOR ANY DET AILS WITH REGARD TO CASH DEPOSITED IN THE BANK ACCOUNT. IN FACT EVEN IN THE ORDER SHEET NOTHING DATED 24.3.3006 THERE IS NO SPECIFIC REFERENCE WIT H REFERENCE TO CASH DEPOSITS IN THE BANK ACCOUNT. IN THE ABOVE CIRCUMST ANCES WE ARE OF THE VIEW THAT THERE WAS LACK OF PROPER OPPORTUNITY TO T HE ASSESSEE TO FILE REQUIRED EVIDENCE BEFORE THE ASSESSING OFFICER. WE THEREFORE SET ASIDE THE ORDER OF LEARNED CIT(A) AND DIRECT THAT THE ADDITIO NAL EVIDENCE FILED BY THE ASSESSEE BE CONSIDERED AS ADDITIONAL EVIDENCE. ISSU E REMANDED TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION IN THE LI GHT OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THE ASSESSING OFFIC ER WILL AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE D ECIDING THE ISSUE. M/S. DAGINA COLLECTION PVT. LTD. 4 7. GROUND NO. 2 RAISED BY THE ASSESSEE READS AS FOL LOWS :- THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF EMPLOYERS CONTRIBUTION TO PF OF RS. 69 633/- ESIC O F RS. 20 039/-. YOUR APPELLANT SUBMIT THAT IT HAS DEPOSIT ED THE EMPLOYERS CONTRIBUTION TO PF AND ESIC BEFORE THE D UE DATE FOR FILING OF RETURN OF INCOME AND HENCE THE DISALLOWA NCE MADE BY THE ASSESSING OFFICER SHALL BE DELETED. 8. THE ASSESSING OFFICER DISALLOWED A SUM OF RS. 69 633/- AND RS. 20 039/- BEING EMPLOYERS SHARE OF PF & ESIC CONTRI BUTION. IN THE LIGHT OF THE DECISION OF HON'BLE SUPREME COURT IN THE CAS E OF ALONE EXCLUSIONS 319 ITR 306 (SC) WHEREBY HON'BLE SUPREME COURT HEL D THAT DELETION OF SECOND PROVISO TO SECTION 43B BY THE FINANCE ACT OF 2005 WITH RETROSPECTIVE EFFECT AND THEREFORE ANY PAYMENT MADE ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME HAS TO BE ALLOW ED AS A DEDUCTION. IN VIEW OF THE AFORESAID DECISION WE DIRECT THAT ADDI TION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY LEARNED CIT(A) S HOULD BE DELETED. 9. GROUND NO. 3 READS AS FOLLOWS :- THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S. 43B BEING SALE TAX PAID OF RS. 6 15 000/- FOR THE A.Y. 2002- 03 AGGREGATING TO RS. 6 26 900/- AS SAME WAS NOT CL AIMED IN THE ORIGINAL RETURN OF INCOME. YOUR APPELLANT SUBMIT TH AT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) O UGHT TO HAVE ALLOWED THE SALES TAX DEDUCTION IN THE YEAR OF PAYM ENT U/S. 43B OF THE I.T. ACT. 10. LIMITED PRAYER OF LEARNED COUNSEL FOR THE ASSES SEE IS THAT IN RESPECT OF SALES TAX DUE PERTAINING TO A.Y. 2001-02 AND 2002-03 WHICH WERE DISALLOWED IN THAT YEAR AND WHICH WERE PAID DU RING THE PREVIOUS YEAR IRRELEVANT TO A.Y. 2003-04 THE ASSESSEE WILL BE ENTITLED TO CLAIM DEDUCTION U/S. 43B OF THE ACT. THE ASSESSEE HAD NOT CLAIMED THE SAME IN ORIGINAL RETURN OF INCOME AND FILED REVISED RETURN OF INCOME IN WHICH THE SAME WAS CLAIMED. REVENUE AUTHORITIES REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT REVISED RETURN HAS NOT BEEN FILE D. IN DOING SO DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GO ETZE INDIA LTD. VS. CIT 284 ITR 323 WAS FOLLOWED. WE ARE OF THE VIEW T HAT THE CLAIM OF THE M/S. DAGINA COLLECTION PVT. LTD. 5 ASSESSEE DESERVES TO BE EXAMINED. POWER OF THE TRIB UNAL TO ACCEPT SUCH ADDITIONAL PLEA HAS BEEN HELD TO BE NOT EFFECTED BY RULING OF THE GOETZE INDIA LTD. (SUPRA). WE ARE OF THE VIEW THAT ANY CLA IM WHICH GOES TO DETERMINE CORRECT TAX LIABILITY OF THE ASSESSEE SHO ULD BE ENTERTAINED BY THE ASSESSING OFFICER. WE THEREFORE REMAND THE ISSU E TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION AND IF THE CLAIM OF THE ASSESSEE IS FOUND TO BE CORRECT TO ALLOW THE CLAIM. 11. IN THE RESULT APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BEEN PRONOUNCED ON 30 TH DAY OF APRIL 2010. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER DATED : 30 TH APRIL 2010 COPY TO : 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT CONCERNED. 5. THE DR CONCERNED MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI PS