DWARKANATH NAIR, MUMBAI v. DCIT 9(2), MUMBAI

ITA 4181/MUM/2013 | 2007-2008
Pronouncement Date: 21-10-2016 | Result: Allowed

Appeal Details

RSA Number 418119914 RSA 2013
Assessee PAN AAPPN1807R
Bench Mumbai
Appeal Number ITA 4181/MUM/2013
Duration Of Justice 3 year(s) 4 month(s) 28 day(s)
Appellant DWARKANATH NAIR, MUMBAI
Respondent DCIT 9(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 21-10-2016
Date Of Final Hearing 08-04-2015
Next Hearing Date 08-04-2015
Assessment Year 2007-2008
Appeal Filed On 24-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.1576/M/2011 & 4181/M/2013 ASSESSMENT YEARS: 2007-08 MR. DWARKANATH KRISHNAN NAIR 602/603 GREEN ACRES CHS LTD. LOKHANDWALA COMPLEX MUMBAI 400 053 PAN: AAPPN 1807R VS. DCIT-9(2) AAYAKAR BHAVAN MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIPUL SHAH A.R. REVENUE BY : SHRI K. KRISHNA MURTHY D.R. DATE OF HEARING : 17.10.2016 DATE OF PRONOUNCEMENT : 21.10.2016 O R D E R PER SANJAY GARG JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS ONE IN RELATION TO TH E QUANTUM ADDITIONS AND THE OTHER AGAINST THE LEVY OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORD ERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] DATED 12.01.2011 & 12.03.2013 RESPECTIVELY. FIRST WE TAKE UP THE AS SESSEES APPEAL BEARING NO.1576/M/2011 RELATING TO QUANTUM ADDITIONS. ITA NO.1576/M/2011 2. A SEARCH ACTION WAS CARRIED OUT IN THE PREMISES OF THE ASSESSEE UNDER SECTION 132 OF THE ACT ON 06.02.07. DURING THE COU RSE OF SEARCH ACTION CASH OF RS.10 LAKHS WAS SEIZED FROM THE RESIDENCE OF THE AS SESSEE. ON BEING ASKED TO EXPLAIN THE ASSESSEE SUBMITTED THAT THE CASH WAS A CCUMULATED BY DRAWING THE SAME FROM HIS COMPANY FOR MEETING VARIOUS EXPENSES INCLUDING THE MARRIAGE ITA NO.1576/M/2011 & 4181/M/2013 MR. DWARKANATH KRISHNAN NAIR 2 CEREMONY OF HIS SON WHICH WAS TO TAKE PLACE IN AUGU ST 2007. THE ASSESSEE FURTHER SUBMITTED THAT HE WAS THE CHAIRMAN AND DIRE CTOR OF THE M/S. LAKOZY MOTORS PVT. LTD. DURING THE FINANCIAL YEAR 2006-07 AND HIS WIFE MRS. SHANTA NAIR AND HIS SON MR. ROHIT NAIR WERE ALSO THE DIREC TORS OF THE COMPANY. THAT HIS ANOTHER SON MR. RAHUL NAIR WAS DIRECTOR OF AQUE ST AUTO PVT. LTD. DURING THE SAID FINANCIAL YEAR. THAT THE ASSESSEE HAD IMP REST ACCOUNT WITH THE COMPANY AND HE USED TO REGULARLY WITHDRAW MONEY FRO M THAT ACCOUNT WHICH WAS DEBITED TO THE IMPREST ACCOUNT MAINTAINED IN HI S NAME BY THE COMPANY; THAT NOT ONLY HE BUT ALSO HIS OTHER FAMILY MEMBER S NAMELY MRS. SHANTA NAIR (WIFE) ROHIT NAIR (SON) AND RAHUL NAIR (SON) WHO W ERE ALSO DIRECTORS OF M/S. LAKOZY MOTORS PVT. LTD. HAD WITHDRAWN CASH FROM THE IR RESPECTIVE IMPREST ACCOUNTS MAINTAINED WITH THE COMPANY AND THAT THE S EIZED CASH WAS PART OF THE SAID AMOUNT WITHDRAWN BY THE DIRECTORS FROM THE COM PANY. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HOWEVE R REJECTED THE CONTENTIONS OF THE ASSESSEE OBSERVING THAT THE ASSESSEE HAD BEE N CHANGING HIS STAND. 3. IN APPEAL THE LD. CIT(A) ALSO REJECTED THE CONT ENTIONS OF THE ASSESSEE OBSERVING THAT THE ASSESSEE COULD NOT PROVE WITH CO GENT MATERIAL ABOUT THE SOURCE OF THE CASH FOUND AT HIS PREMISES DURING SEA RCH ACTION. 4. BEFORE US THE LD. A.R. OF THE ASSESSEE HAS MOVE D AN APPLICATION SEEKING ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF T HE INCOME TAX (APPELLATE TRIBUNAL) RULES 1963. TO SUBSTANTIATE HIS SUBMISS IONS THE ASSESSEE HAD SUBMITTED THE COPY OF HIS AND HIS FAMILY MEMBERS PE RSONAL STATEMENT OF AFFAIR/ BALANCE SHEET UPTO THE DATE OF SEARCH AND ALSO OF E ARLIER YEARS. IT HAS BEEN FURTHER SUBMITTED THAT THE ASSESSMENT OF THE ASSESS EE FOR THE ENTIRE BLOCK PERIOD WAS COMPLETED AS PER THE ORIGINAL RETURN OF INCOME FILED BY HIM WITHOUT MAKING ANY ADDITION IN ANY OF THE YEARS EXCEPT IN THE YEAR UNDER APPEAL. THE COMPANY WAS ADVANCING IMPREST CASH TO ALL THE THREE DIRECTORS AND OTHER EMPLOYEES FOR INCURRING EXPENSES ON BEHALF OF THE C OMPANY AND AS ON THE DATE OF SEARCH FOLLOWING AMOUNT WAS LYING AS AN ADVANCE FOR EXPENSES; ITA NO.1576/M/2011 & 4181/M/2013 MR. DWARKANATH KRISHNAN NAIR 3 SR. NO. NAME AMOUNT 1. DWARKANATH NAIR 2 49 073 7 ROB IT NAIR 1 47 601 3. SHANTA NAIR 3 10 565 4. RAHUL NAIR 2 80 276 HOWEVER THE AO AND THE LD. CIT(A) DID NOT ACCEPT THE EARLIER YEAR RETURNS BALANCE SHEETS AND ASSESSMENT ORDERS AS A SUFFICIENT DOCUMENTARY EVIDENCE. IT HAS BEEN SUBMITTED THAT THE ASSESSEE AND HIS FAMILY MEMBERS WERE JOINTLY HOLDING CASH IN HAND HOWEVER THE AO TREAT ED THE SAID AMOUNT OF RS.10 00 000/- AS UNDISCLOSED INCOME OF THE ASSESSE E WITHOUT APPRECIATING THE FACT THAT ALL THE FOUR PERSONS ARE REGULAR TAX PAYE RS AND RESIDING JOINTLY IN THE SAME PREMISES. THAT NOW THE ASSESSEE HAS OBTAINED A CONFIRMATION FROM M/S. LAKOZY MOTORS PVT. LTD. CONFIRMING THAT AS PER THEI R RECORD AS ON THE DATE OF SEARCH THE CASH ADVANCE LYING WITH THE ASSESSEE AN D HIS FAMILY MEMBERS WAS AT RS.6 33 148.02/-. 5. ALONG WITH THE APPLICATION A DULY SWORN IN AFFID AVIT HAS ALSO BEEN FILED WHEREIN IT HAS BEEN PLEADED THAT THE ASSESSEE WAS U NDER BONAFIDE BELIEF THAT THE EVIDENCES EARLIER SUBMITTED BY HIM WERE ENOUGH TO P ROVE HIS CONTENTIONS. HOWEVER SINCE THE LOWER AUTHORITIES HAVE OBSERVED THAT THE SAID EVIDENCES WERE NOT ENOUGH HENCE THE ASSESSEE NOW WANTS TO SU BMIT THE CONFIRMATION LETTER FROM M/S. LAKOZY MOTORS PVT. LTD. TO CONFIRM AND PROVE THAT THE ASSESSEE AND HIS FAMILY MEMBERS WERE HOLDING CASH O N BEHALF OF THE COMPANY. WE FIND THAT THE ASSESSEE HAS TAKEN THIS PLEA OF HO LDING CASH DRAWN FROM THE COMPANY SINCE VERY BEGINNING. THE CASE OF THE ASSE SSEE HAS BEEN REJECTED BY THE LOWER AUTHORITIES BECAUSE THEY DO NOT FIND THE EVIDENCES FURNISHED BY THE ASSESSEE AS SUFFICIENT TO PROVE HIS CONTENTIONS. T HE EVIDENCE NOW SOUGHT TO BE FURNISHED BY THE ASSESSEE GOES TO THE ROOT OF THE C ASE AND IN OUR VIEW IS VERY MUCH NECESSARY TO BE LOOKED INTO AND CONSIDERED FOR THE JUST DECISION OF THE CASE. WE ACCORDINGLY ALLOW THE APPLICATION OF THE ASSESSEE FOR ADDITIONAL EVIDENCE AND REMAND THE CASE TO THE FILE OF THE AO WITH A DIRECTION TO ADMIT ITA NO.1576/M/2011 & 4181/M/2013 MR. DWARKANATH KRISHNAN NAIR 4 THE ADDITIONAL EVIDENCES SOUGHT TO BE PRODUCED BY T HE ASSESSEE AND THEN VERIFYING THE AUTHENTICITY OF THE SAME AND TAKE A F RESH DECISION ON THE ISSUE IN ACCORDANCE WITH LAW. 6. IN THE RESULT THIS APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.4181/M/2013 7. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGITA TING THE CONFIRMATION OF THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF THE CONFIRMATION OF THE ABOVE STATED IMPUGNED ADDITIONS . SINCE WE HAVE RESTORED THE MATTER IN RELATION TO QUANTUM ADDITIONS TO THE FILE OF THE AO THEREFORE AT THIS STAGE THE VERY BASIS FOR THE LEVY OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT HAS CEASED TO EXIST. THE PENALTY LEVIED IN THI S CASE IN RELATION TO THE IMPUGNED ADDITIONS THEREFORE AT THIS STAGE IS ORD ERED TO BE DELETED. HOWEVER IT IS MADE CLEAR THAT THE AO WILL BE AT LIBERTY TO INITIATE FRESH PENALTY PROCEEDINGS IF HE DEEMS IT SO FIT WHILE MAKING THE FRESH ASSESSMENT PROCEEDINGS AS ORDERED ABOVE. THIS APPEAL OF THE A SSESSEE THEREFORE IS ALSO TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE HEREBY TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.10.2016. SD/- SD/- (ASHWANI TANEJA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 24.10.2016. * KISHORE SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH ITA NO.1576/M/2011 & 4181/M/2013 MR. DWARKANATH KRISHNAN NAIR 5 //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR ITAT MUMBAI.