AKBAR HASAN PHOOZHIKKAL, MUMBAI v. ITO 18(3)(1), MUMBAI

ITA 260/MUM/2014 | 2007-2008
Pronouncement Date: 30-04-2014 | Result: Partly Allowed

Appeal Details

RSA Number 26019914 RSA 2014
Assessee PAN AFMPP3008A
Bench Mumbai
Appeal Number ITA 260/MUM/2014
Duration Of Justice 3 month(s) 20 day(s)
Appellant AKBAR HASAN PHOOZHIKKAL, MUMBAI
Respondent ITO 18(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 30-04-2014
Date Of Final Hearing 23-04-2014
Next Hearing Date 23-04-2014
Assessment Year 2007-2008
Appeal Filed On 09-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH MUMBAI . !'# $% &'() $* + $ # BEFORE SHRI D.MANMOHAN VICE PRESIDENT AND SHRI N.K . BILLAIYA AM ./I.T.A. NO. 260/MUM/2014 ( - - - - / ASSESSMENT YEAR : 2007-08 SHRI AKBAR HASAN PHOOZHIKKAL PROP. STERLING TRADE LINK PLOT NO. 50 SINDHI COLONY L.J. ROAD MAHIM (W) MUMBAI-400 016 THE ITO 18(3)(1) MUMBAI . $* ./ /0 ./PAN/GIR NO. : AFMPP3008A ( .1 /APPELLANT ) .. ( 23.1 / RESPONDENT ) .1 4 $ / APPELLANT BY : ` SHRI ANWAR KARNIL 23.1 5 4 $ /RESPONDENT BY : SHRI MANISH KUMAR SINGH 5 6* / DATE OF HEARING :23.4.2014 7- 5 6* / DATE OF PRONOUNCEMENT :30.4.2014 +$8 / O R D E R PER N.K. BILLAIYA AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A)-29 MUMBAI DT. 26.11.2013 PERTAINING TO ASS ESSMENT YEAR 2007- 08. 2. THE ASSESSEE HAS RAISED 2 SUBSTANTIVE GROUNDS O F APPEAL. GROUND NO. 1 RELATES TO THE ADDITION MADE U/S. 41(1) OF TH E ACT TO THE TUNE OF RS. 25 86 199/- AND GROUND NO. 2 RELATES TO THE ADDITIO N OF RS. 2 60 000/- U/S.68 OF THE ACT. 3. THE ASSESSEE IS A PROPRIETOR OF M/S. STERLING T RADELINKS. THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS ASSESSED U/S. 143(3) OF THE ACT ON A ITA NO.260/M/2014 2 TOTAL INCOME AT RS. 2 63 130/-. THE SAID ASSESSMEN T WAS SUBSEQUENTLY SET ASIDE BY THE CIT U/S. 263 OF THE ACT. THE PRESENT ASSESSMENT IS PURSUANT TO THE DIRECTIONS OF THE CIT-18 VIDE ORDER DT. 27.1 2.2011. 3.1. IT WAS NOTICED THAT SUNDRY CREDITORS AMOUNTING TO RS. 44 56 530/- NEEDS FURTHER VERIFICATION. ACCORDINGLY NOTICE U/S . 133(6) WAS ISSUED TO ALL THE SUNDRY CREDITORS TOTALING TO 16. REPLIES C OULD BE RECEIVED ONLY IN RESPECT OF 10 PARTIES CREDIT BALANCES OF THE FOLLO WING 6 PARTIES REMAIN TO BE CONFIRMED. S. NO. NAME OF THE PARTY AMOUNT RS. I. COTTON WORLD 5 35 000/- II. PRINCE INTERNATIONAL 5 05 124/- III. MANGALIK FASHION 44 625/- IV. AYUSH FASHION 64 265/- V. JEMINI APPEARELS 13 57 300/- VI. GOLDEN IMPEX 79 885/- TOTAL 25 86 199/- 3.2. THE AO TREATED THE AFOREMENTIONED CREDITORS AS CESSATION OF LIABILITIES AND ADDED RS. 25 86 199/- U/S. 41 OF TH E ACT. THE AO FURTHER NOTICED UNSECURED LOANS AT RS. 2 60 000/-. THE AO OBSERVED THAT THE LOAN AMOUNTS WERE RECEIVED IN CASH AND WERE BELOW T HE LIMIT OF RS. 20 000/-. THE AO TREATED THE ENTIRE AMOUNT OF RS. 2 60 000/- AS UNEXPLAINED CASH CREDIT AND ADDED THE SAME TO THE I NCOME OF THE ASSESSEE. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). IT WAS EXPLAINED TO THE LD. CIT(A) THAT THERE WAS SOME DIS PUTE IN RELATION TO THE MATERIAL SUPPLIED BY THE ASSESSEE TO HIS CUSTOMERS BECAUSE OF WHICH ITA NO.260/M/2014 3 ASSESSEES CUSTOMERS WITHHELD THE PAYMENT AND IN TU RN THE ASSESSEE COULD NOT MAKE THE PAYMENTS TO ITS CREDITORS AND THE SAME REMAINED UNPAID. IT WAS FURTHER EXPLAINED THAT THE LIABILITIES VERY MUC H EXIST IN THE BALANCE SHEET OF THE ASSESSEE WHICH THE ASSESSEE HAS DISCHA RGED IN SUBSEQUENT YEARS. THE LD. CIT(A) WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND CONFIRMED THE ADDITION OF RS. 25 86 1 99/-. ON SIMILAR LINES THE LD. CIT(A) HELD THAT THE ASSESSEE HAS FAILED TO PROVE THE IDENTITY CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO N IN RESPECT OF UNSECURED LOANS AND CONFIRMED THE ADDITION OF RS. 2 60 000/- ALSO. 5. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. T HE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEF ORE THE LOWER AUTHORITIES. 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE FINDINGS OF THE AO. 7. IN SO FAR AS ADDITION OF RS. 25 86 199/- U/S. 41 OF THE ACT IS CONCERNED WE FIND THAT THE ADDITIONS HAVE BEEN MAD E MERELY ON THE BASIS THAT THE NOTICE ISSUED U/S. 133(6) OF THE ACT WERE NOT REPLIED BY SIX PARTIES MENTIONED ELSEWHERE. THE TRANSACTION PERT AINS TO THE PERIOD PRIOR TO F.Y. 2006-07. THE NOTICES WERE ISSUED AFTER A G AP OF 6 YEARS. IT MAY BE POSSIBLE THAT THE PARTIES MAY NOT BE CARRYING ON THE BUSINESS FROM THE ADDRESSES GIVEN IN THEIR BILLS. MATERIAL PLACED B EFORE US SHOWS THAT THE ASSESSEE HAS MADE PAYMENTS TO ALL THESE PARTIES IN SUBSEQUENT YEARS EITHER IN FULL OR IN PART. THE PAYMENT DETAILS WER E MADE AVAILABLE TO THE LD. CIT(A) AND ALSO TO THE AO. THE REVENUE AUTHORI TIES HAVE SIMPLY DISBELIEVED/REJECTED THESE DETAILS. CONSIDERING TH ESE FACTS IN TOTALITY IN OUR CONSIDERED VIEW THE LIABILITIES HAVE NOT BEEN CEASED BUT ARE VERY MUCH ALIVE AND THEREFORE PROVISIONS OF LAW U/S. 41(1) OF THE ACT DO NOT ITA NO.260/M/2014 4 APPLY ON THE FACTS OF THE CASE. WE DO NOT FIND ANY REASON FOR TAKING SUCH OUTSTANDING LIABILITY AS DEEMED PROFITS OF THE YEAR UNDER CONSIDERATION. THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 25 86 199/-. 7.1. IN SO FAR AS ADDITION OF RS. 2 60 000/- IS CON CERNED WE FIND THAT NEITHER THE AO NOR THE ASSESSEE HAS FURNISHED THE D ETAILS OF BORROWINGS. IT IS ALSO NOT CLEAR WHEN THESE LOANS WERE TAKEN BY THE ASSESSEE WHETHER THEY PERTAIN TO THE YEAR UNDER CONSIDERATION OR WER E TAKEN IN EARLIER YEAR. COPIES OF ACCOUNTS HAVE ALSO NOT BEEN BROUGHT ON RE CORD. THEREFORE IN OUR HUMBLE OPINION THIS ISSUE NEEDS TO BE DECIDED AFRESH. WE RESTORE THIS ISSUE TO THE FILE OF THE AO. THE ASSESSEE IS DIRECTED TO PROVE THE GENUINENESS OF THE LOAN TAKEN DURING THE YEAR UNDER CONSIDERATION BY BRINGING COGENT DEMONSTRATIVE EVIDENCES /MATERIAL O N RECORD. THE AO IS DIRECTED TO VERIFY THE DETAILS IN THE LIGHT OF THE PROVISIONS OF SEC. 68 OF THE ACT AND DECIDE THE ISSUE AFRESH AFTER GIVING A REAS ONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2014 +$8 5 - *$ 9 :+ ; 30.4.2014 5 < SD/- SD/- (D. MANMOHAN ) (N. K. BILLAIYA ) !'# /VICE PRESIDENT $* + / ACCOUNTANT MEMBER MUMBAI; :+ DATED 30.4.2014 . . ./ RJ SR. PS ITA NO.260/M/2014 5 +$8 +$8 +$8 +$8 5 55 5 26& 26& 26& 26& =$&-6 =$&-6 =$&-6 =$&-6 / COPY OF THE ORDER FORWARDED TO : 1. .1 / THE APPELLANT 2. 23.1 / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. &?< 26 / DR ITAT MUMBAI 6. < @ / GUARD FILE. +$8 +$8 +$8 +$8 / BY ORDER 3&6 26 //TRUE COPY// ! !! ! / / / / / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI