VARUN RASIKLAL THAKKAR, MUMBAI v. ITO 8(3)(4), MUMBAI

ITA 3245/MUM/2011 | 2007-2008
Pronouncement Date: 03-07-2013 | Result: Allowed

Appeal Details

RSA Number 324519914 RSA 2011
Assessee PAN ACSPT9144Q
Bench Mumbai
Appeal Number ITA 3245/MUM/2011
Duration Of Justice 2 year(s) 2 month(s) 8 day(s)
Appellant VARUN RASIKLAL THAKKAR, MUMBAI
Respondent ITO 8(3)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 03-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 03-07-2013
Date Of Final Hearing 08-11-2012
Next Hearing Date 08-11-2012
Assessment Year 2007-2008
Appeal Filed On 25-04-2011
Judgment Text
F IN THE INCOME TAX APPELLATE TRIBUNAL F BENC H MUMBAI !' $ % BEFORE SHRI I.P. BANSAL JM AND SHRI KARUNAKARA RAO AM ./I.T.A. NO.3245/M/2011 ( & ' (' / ASSESSMENT YEAR :2007-2008) VARUN RASIKLAL THAKKAR GALA NO.B/131 1 ST FLOOR SANJAY BUILDING NO.7 ANDHERI KURLA ROAD MITTAL INDUSTRIAL ESTATE MUMBAI 400 059. & / VS. THE INCOME TAX OFFICER - 8(3)(4) 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020. ) $ ./PAN : ACSPT 9144 Q ( )* /APPELLANT) .. ( + )* / RESPONDENT) ./I.T.A. NO.3247/M/2011 ( & ' (' / ASSESSMENT YEAR :2007-2008) SAMIR RASIKLAL THAKKAR GALA NO.B/131 1 ST FLOOR SANJAY BUILDING NO.5 ANDHERI KURLA ROAD MITTAL INDUSTRIAL ESTATE MUMBAI 400 059. & / VS. THE INCOME TAX OFFICER - 8(3)(4) 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020. ( )* /APPELLANT) .. ( + )* / RESPONDENT) )* - . / ASSESSEE BY : SHRI R.C. JAIN + )* - . / REVENUE BY : SHRI O.P. MEENA SR. AR & - /$ /DATE OF HEARING : 6.6.2013 01( - /$ /DATE OF PRONOUNCEMENT : 3.7.2013 2 2 2 2 / O R D E R PER D. KARUNAKARA RAO AM: THERE ARE TWO APPEALS UNDER CONSIDERATION INVOLVING TWO ASSESSEES FOR THE SAME ASSESSMENT YEAR 2007-2008. CONSIDERING THE FA CT THAT BOTH THE ASSESSEES ARE CONNECTED FINALLY TO M/S. RAMMARUTI TEXTILE PVT. LT D. WHERE BOTH THE PEOPLE ARE DIRECTORS WITH SUBSTANTIAL INTEREST EXCEEDING 10% O F THE SHARES AND THE ISSUES INVOLVED ARE THE SAME IN BOTH THE APPEALS THEY ARE CLUBBED HEARD COMBINEDLY AND BEING DISPOSED OF IN THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE F OLLOWING PARAGRAPHS. 2 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.324 5/M/2011 READ AS UNDER: 1. THE LD CIT (A) ERRED IN HOLDING IN CONFORMITY WI TH THE ITO THAT THE PROVISIONS OF SECTION 2(22)(E) WERE ATTRACTED IN TH E INSTANT CASE AND ACCORDINGLY ERRED IN CONFIRMING THE ADDITION OF RS. 7 72 042/-. 2. THE LD CIT (A) IN COMING TO THE CONCLUSION AS AB OVE DID NOT CONSIDER THE SUBMISSION OF THE APPELLANT IN THEIR ENTIRETY. 3. THE LD CIT (A) DID NOT APPRECIATE IN PARTICULAR THAT (A) BUSINESS TRANSACTIONS WERE OUTSIDE THE PURVIEW OF SECTION 2(22)(E); (B) O NLY PAYMENTS MADE IN CASH COULD BE CONSIDERED FOR THE PURPOSE OF APPLYIN G SECTION 2(22)(E) AND (C) ONLY NET DEBIT BALANCE IN ALL THE ACCOUNTS OF THE APPELLANT IN THE COMPANYS BOOKS COULD CONSIDERED FOR THE PURPOSE OF APPLICABI LITY OF SECTION 2(22)(E) OF THE ACT. 3 . THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.3247/M /2011 READ AS UNDER: 1. THE LD CIT (A) ERRED IN HOLDING IN CONFORMITY WI TH THE ITO THAT THE PROVISIONS OF SECTION 2(22)(E) WERE ATTRACTED IN TH E INSTANT CASE AND ACCORDINGLY ERRED IN CONFIRMING THE ADDITION OF RS. 7 72 042/-. 2. THE LD CIT (A) IN COMING TO THE CONCLUSION AS AB OVE DID NOT CONSIDER THE SUBMISSION OF THE APPELLANT IN THEIR ENTIRETY. 3. THE LD CIT (A) DID NOT APPRECIATE THAT (A) BUSIN ESS TRANSACTIONS ARE OUTSIDE THE PURVIEW OF SECTION 2(22)(E); (B) ONLY PAYMENTS MADE IN CASH COULD BE CONSIDERED FOR THE PURPOSE OF APPLYING SECTION 2(22 )(E) AND (C) ONLY NET DEBIT BALANCE IN ALL THE ACCOUNTS OF THE APPELLANT IN THE COMPANYS BOOKS COULD BE CONSIDERED FOR THE PURPOSE OF APPLICABILIT Y OF SECTION 2(22)(E) OF THE ACT. 4. AT THE OUTSET SHRI R.C. JAIN LD COUNSEL FOR TH E ASSESSEE BROUGHT OUR ATTENTION TO PARA 5 OF THE IMPUGNED ORDER IN THE CA SE OF SHRI VARUN RASHIKLAL THAKKAR AS WELL AS PARA 3 OF THE IMPUGNED ORDER IN THE CASE OF SHRI SAMIR RASIKLAL THAKKAR AND MENTIONED THAT THE CIT (A) HAS NOT APPL IED HIS MIND IN THE FACTS OF THE CASE AND THE PAPERS FILED BEFORE HIM WHILE ADJUDICA TING THE ISSUES INVOLVED. IN THIS REGARD LD COUNSEL MENTIONED THAT BOTH THE ASSESSEE S HAVE BUSINESS TRANSACTIONS WITH M/S. RAMMARUTI TEXTILE PVT. LTD. AND THE AMOUN TS RECEIVED FROM THE SAID COMPANY ARE NOT ATTRACTED TO THE PROVISIONS OF SECT ION 2(22)(E) OF THE ACT FOR THE REASON THAT THE SAID TRANSACTIONS ARE DONE INVOVLED CURRENT ACCOUNT TRANSACTIONS AND ARE TRANSACTED IN THE ORDINARY COURSE OF BUSINESS. IN THIS REGARD LD COUNSEL RELIED ON PAGES FROM 8 TO 14 OF THE PAPER BOOK IN PARTICUL AR. THE VERY FACT THAT THE ISSUE WAS BROUGHT TO THE NOTICE OF THE CIT (A) WAS ALSO M ENTIONED BEFORE US. DESPITE THE AVAILABILITY OF THE RELEVANT INFORMATION AND THE EX PLANATION FROM THE ASSESSEES CIT (A) CRYPTICALLY DECIDED THE ISSUE BY NOT PROVIDING THE WELL REASONED ORDERS. IN SUCH 3 CASES AS PER THE LD COUNSEL THIS ISSUE SHOULD BE SET ASIDE TO THE FILES OF THE CIT (A) FOR RE-ADJUDICATION OF THE ISSUE AFRESH AFTER DETER MINING THE ISSUES AND ADJUDICATING THE SAME BY GIVING A REASONED ORDER. 5. ON THE OTHER HAND LD DR RELIED ON THE ORDER OF THE CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES PERUSED THE ORDE RS OF THE REVENUE AUTHORITIES AND THE RELEVANT PARAS REFERRED BY THE LD COUNSEL IN PARTICULAR. IT IS A UNDISPUTED FACT THAT ASSESSEE FILED THE DETAILS OF THE TRANSACTIONS TO AND FRO INVOLVING THE ASSESSEE AND THE COMPANY. HE HAS ALSO FILED SO ME INFORMATION THAT THROUGH LIGHT ON THE EXISTENCE OF BUSINESS TRANSACTIONS WIT H THE COMPANY AND THE PROPRIETORSHIP CONCERNS OF THE DIRECTORS. THESE FA CTS ARE COMPLETELY IGNORED BY THE CIT (A) AS EVIDENT FROM THE SAID PARAS SPECIFIED BE FORE US. AS SUCH THE ORDERS OF THE CIT (A) IN OUR OPINION ARE NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 250(6) OF THE ACT. THEREFORE WE ARE OF THE OPINIO N THAT WE SHOULD ACCEPT THE PRAYER OF THE LD COUNSEL TO REMAND THE ISSUES TO TH E FILES OF THE CIT (A) FOR FRESH ADJUDICATION AFTER GRANTING A REASONABLE OPPORTUNIT Y OF BEING BEARD TO THE ASSESSEE. ASSESSEE IS FREE TO FURNISH EVERY KIND OF INFORMATI ON TO DEMONSTRATE THE CLAIM OF THE ASSESSEE BEFORE THE CIT (A). CIT (A) IS DIRECTED T O PASS A SPEAKING ORDER EXAMINING ALL THE ISSUES IN ACCORDANCE WITH THE LAW IN FORCE. ACCORDINGLY GROUNDS RAISED BY THE ASSESSEES ARE SET ASIDE . 7. IN THE RESULT BOTH THE APPEALS FILED BY THE ASSE SSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3.7.2013. SD/- SD/- ( I.P. BANSAL) (D. KARUNAKARA RAO) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 3& 3.7.2013 . & . ./ OKK SR. PS 4 2 2 2 2 - -- - +/45 +/45 +/45 +/45 65(/ 65(/ 65(/ 65(/ / COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. + )* / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 5 89 +/& / DR ITAT MUMBAI 6. 9!' : / GUARD FILE. 5/ +/ //TRUE COPY// 2& 2& 2& 2& / BY ORDER ; ;; ; / < < < < = = = = (DY./ASSTT. REGISTRAR) / ITAT MUMBAI