ITO 22(2)-3, NAVI MUMBAI v. SANDHYA NILESH KOTAK, MUMBAI

ITA 4445/MUM/2009 | 2006-2007
Pronouncement Date: 14-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 444519914 RSA 2009
Assessee PAN AAKPK4344F
Bench Mumbai
Appeal Number ITA 4445/MUM/2009
Duration Of Justice 9 month(s) 21 day(s)
Appellant ITO 22(2)-3, NAVI MUMBAI
Respondent SANDHYA NILESH KOTAK, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 14-05-2010
Assessment Year 2006-2007
Appeal Filed On 24-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI VIJAY PAL RAO JM ITA NO.4445/MUM/2009 : ASST.YEAR 2006-2007 THE INCOME TAX OFFICER WARD 22(2)-3 MUMBAI. VS. MRS.SANDHYA NILESH KOTAK 409 PARIMAL R.B.MEHTA MARG GHATKOPAR (EAST) MUMBAI 400 077. PA NO.AAKPK4344F. (APPELLANT) (RESPONDENT) APPELLANT BY : DR.ANIL KUMAR SINGH RESPONDENT BY : MS.VASANTI PATEL O R D E R PER R.S.SYAL AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 06.05.2009 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. FIRST GROUND IS AGAINST RESTRICTING THE ADDITION OF RS. 41 000 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRAVELLING EXPENDIT URE TO RS.20 000 BY THE LD. CIT(A) THEREBY ALLOWING RELIEF OR RS.21 000. THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.41 000 IN RESPECT OF TRAVELLING EXPENSES PAID TO M/S.VINAYAK FOREX SERVICES PRIVATE LIMITED. THE A.O . MADE DISALLOWANCE FOR THE ENTIRE AMOUNT ON THE GROUND THAT THE ASSESSEE HAD N OT PROVED THE NATURE OF TRANSACTION AND PURPOSE OF TRAVELLING ETC. IN THE F IRST APPEAL THE LEARNED CIT(A) RESTRICTED THE ADDITION TO RS.20 000 THEREBY GIVING RELIEF OF RS.21 000 AGAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEFORE US. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS FOUND THAT THE ASSESSEE PAID A SUM OF RS.41 000 TO M/S.VINAYAK FOREX SERVICES PRIVATE LIMITED IN CONNECTION WITH TRAVELL ING. EVEN THOUGH THE DETAILS WERE NOT FILED BEFORE THE ASSESSING OFFICER IN ENTI RETY BUT THAT WOULD NOT CALL FOR ITA NO.4445/MUM/2009 MRS.SANDHYA NILESH KOTAK. 2 THE DISALLOWANCE OF THE ENTIRE AMOUNT CONSIDERING THE FACT THAT IT WAS GENUINELY PAID TO SOME OUTSIDE PARTIES FOR THE RELEVANT PURPO SE. THE LEARNED A.R. ADMITTED THAT THERE IS NO CROSS APPEAL FILED ON BEHALF OF TH E ASSESSEE. UNDER THE PRESENT CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED CIT(A) HAS RIGHTLY REDUCED THE DISALLOWANCE TO RS.20 000. THIS GROUND IS NOT ALLOWED. 4. SECOND ISSUE RAISED IN THIS APPEAL IS AGAINST TH E DELETION OF ADDITION OF RS.29 66 081. THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE HAD SHOWN SUNDRY CREDITORS AMOUNTING TO RS.1 00 88 561. THE ASSESSEE WAS REQUESTED TO SHOW THE DETAILS OF PAYMENT MADE TO SUNDRY CREDITORS AND ALS O FILE CONFIRMATION FROM THE SAID CREDITORS. NO CONFIRMATION WAS FILED. OUT OF T HE TOTAL AMOUNT OUTSTANDING AT RS.1.00 CRORE AND ODD THE ASSESSEE COULD PRODUCE THE DETAILS OF PAYMENT MADE IN THE SUBSEQUENT YEAR IN RESPECT OF SOME OF THE CREDI TORS. AS REGARDS THE REMAINING CREDITORS TOTALING TO RS.29 66 081 AS TABULATED AT PAGES 2 AND 3 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER MADE ADDITION BY TREAT ING IT AS A CASE OF LIABILITY CEASING TO EXIST. THE LEARNED CIT(A) DELETED THE AD DITION ON THE GROUND THAT NO SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO PRO VE AND ESTABLISH THE GENUINENESS OF THE CREDITORS AND FURTHER THE A.O. HAD NOT MADE ANY EFFORT TO VERITY THE CREDITORS. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS FOUND THAT THE ASSESSING OFFICER REQUE STED THE ASSESSEE TO PRODUCE DETAILS OF PAYMENT MADE IN THE SUBSEQUENT YEARS IN RESPECT OF THE TOTAL CREDITORS. IT IS ONLY IN RESPECT OF THE CREDITORS FOR WHICH NO CO NFIRMATION COULD BE FILED TOTALING RS.29.66 LAKHS THAT THE ASSESSING OFFICER MADE ADD ITION AFTER EXHAUSTING THE ACTION OF ISSUING NOTICE U/S.133(6) TO SOME OF THE PARTIES WHICH REMAINED UNSERVED. ON A SPECIFIC QUERY FROM THE BENCH THE LEARNED A.R . STATED THAT THE ASSESSEE HAS MADE PAYMENT TO ALL THE CREDITORS IN A SUBSEQUENT Y EAR. HOWEVER SUCH DETAILS OF PAYMENT HAVE NOT BEEN PLACED ON RECORD. IN OUR CON SIDERED OPINION THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION O N FLIMSY GROUND OF THE ASSESSING OFFICER NOT HAVING ISSUED NOTICE TO THE ASSESSEE WHEREAS IT WAS ACTUALLY ISSUED. IN ITA NO.4445/MUM/2009 MRS.SANDHYA NILESH KOTAK. 3 OUR CONSIDERED OPINION THE ENDS OF JUSTICE WILL MEE T ADEQUATELY IF THE IMPUGNED ORDER ON THIS ISSUE IS SET ASIDE THE MATTER IS REST ORED TO THE FILE OF A.O. WE ORDER ACCORDINGLY AND DIRECT HIM TO DECIDE THIS ISSUE AFR ESH AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. NEEDLESS TO SAY THE ASSESSEE WILL ADDUCE EVIDENCE IN RESPECT OF THE PAYMENTS MAD E FOR THE SAID SUM OF RS.29.66 LAKHS IN THE SUBSEQUENT YEARS. 6. IN THE RESULT THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THIS 14 TH DAY OF MAY 2010. SD/- SD/- ( VIJAY PAL RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 14 TH MAY 2010 . DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-XXII MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.