DCIT CEN CIR 2(2), MUMBAI v. BRIGHT GLOBAL PAPER P.LTD, MUMBAI

ITA 7257/MUM/2014 | 2007-2008
Pronouncement Date: 29-11-2017 | Result: Allowed

Appeal Details

RSA Number 725719914 RSA 2014
Assessee PAN AAACB4358H
Bench Mumbai
Appeal Number ITA 7257/MUM/2014
Duration Of Justice 2 year(s) 11 month(s) 24 day(s)
Appellant DCIT CEN CIR 2(2), MUMBAI
Respondent BRIGHT GLOBAL PAPER P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 29-11-2017
Assessment Year 2007-2008
Appeal Filed On 05-12-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI RAVISH SOOD JUDICIAL MEMBER ITA NOS. 7255 /MUM/2014 TO 7257/MUM/2014 : A.YS : 2005 - 06 TO 2007 - 08 DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 2(2) (APPELLANT) VS. M/S. BRIGHT GLOBAL PAPER PRIVATE LIMITED KALYAN BUILDING NO. 3 ROOM NO. 34 2 ND FLOOR KHADILKAR ROAD MUMBAI 400 004 (RESPONDENT) PAN : AAACB4358H APPELLANT BY : SHRI PURUSHOTTAM TRIPURI (CIT - DR) RESPONDENT BY : NONE DATE OF HEARING : 23/11/2017 DATE OF PRONOUNCEMENT : 29 /11/2017 O R D E R PER G.S. PANNU AM : THE CAPTIONED ARE THREE APPEALS PREFERRED BY THE REVENUE IN THE CASE OF THE SAME ASSESSEE FOR ASSESSMENT YEARS 2005 - 06 2006 - 07 AND 2007 - 08 WHI CH INVOLVE A SIMILAR DISPUTE. 2. AT THE TIME OF HEARING IT WAS NOTICED THAT INSPITE OF ISSUANCE OF NOTICES ON MORE THAN ONE OCCASION THE RESPONDENT - ASSESSEE HAS NOT PUT IN APPEARANCE. THE LD. DR ALSO FILED A COMMUNICATION FROM THE ASSESSING 2 ITA NOS. 7255 TO 7257/MUM/2014 M/S. BRIGHT GLOBAL PAPER PVT. LTD. OFFICER POI NTING OUT THE SERVICE OF NOTICE OF HEARING AT THE STATED ADDRESS OF THE ASSESSEE AND YET NOBODY APPEARED ON BEHALF OF THE ASSESSEE NOR HAS ANY APPLICATION BEEN RECEIVED FOR ADJOURNMENT. UNDER THESE CIRCUMSTANCES FOLLOWING RULE 25 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES 1963 THE APPEALS OF THE REVENUE ARE BEING DISPOSED OFF EX - PARTE THE RESPONDENT - ASSESSEE AFTER HEARING THE APPELLANT - REVENUE ON MERITS. 3. APPEAL IN ITA NO. 7255/MUM/2014 FOR THE ASSESSMENT YEAR 2005 - 0 6 IS TAKEN AS THE LEAD CASE WHEREIN THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER : - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.1 14 49 265/ - ON ACCOUN T OF UNSECURED LOAN WITHOUT APPRECIATING THE FACT THAT THOUGH THE PARTIES ARE FAMILY MEMBERS NO CONFIRMATIONS ARE FILED BY THE ASSESSEE AND THE SOURCE OF THE FUNDS ARE NOT VERIFIABLE FROM THE RECORDS OF THESE PARTIES AS NO BALANCE - SHEET OR BANK STATEMENT S HAVE BEEN FILED? 2. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND AND/OR TO ALTER ANY OF THE GROUNDS OF APPEAL IF NEED BE. 3. THE APPELLANT THEREFORE PRAYS THAT ON THE GROUNDS STATED ABOVE THE ORDER OF THE CIT(A) - 37 MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. THE SAID APPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A) - 37 MUMBAI DATED 30.09.2015 PERTAINING TO THE ASSESSMENT YEAR 20 05 - 06 WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER MUMBAI DATED 2 8 .03. 201 3 U/S 14 4 R.W.S. 153A OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 3 ITA NOS. 7255 TO 7257/MUM/2014 M/S. BRIGHT GLOBAL PAPER PVT. LTD. 4. NOTABLY THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER REVEALS THAT A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT WAS CARRIED OUT IN A GROUP OF CONCERNS WHICH INCLUDED TH E ASSESSEE AND CONSEQUENTLY A NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE IN RESPONSE TO WHICH ASSESSEE FILED A RETURN OF INCOME FOR ASSESSMENT YEAR 2005 - 06 DECLARING A TOTAL INCOME OF RS.19 07 478/ - . THE DISCUSSION IN THE ASSESSMENT ORDER ALS O REVEALS THAT THERE WAS NON - COMPLIANCE BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS AND THE TOTAL INCOME HAS BEEN DETERMINED AT RS.11 37 54 360/ - . ONE OF THE ADDITIONS WHICH IS THE SUBJECT MATTER OF THE APPEALS BEFORE US WAS OF RS.1 14 49 265/ - MADE U/S 68 OF THE ACT BY TREATING THE UNSECURED LOANS TO THE EXTENT OF RS.1 14 49 265/ - AS BEING UNEXPLAINED CASH - CREDITS. THE RELEVANT DISCUSSION REVEALS THAT THE ASSESSEE WAS ASKED TO FURNISH THE CONFIRMATION OF THE LOAN TAKEN COPIES OF BANK STATEMENT OF L ENDERS IN ORDER TO PROVE THEIR LENDING CAPACITY ETC. NOTICING THE FAILURE OF THE ASSESSEE TO SUBMIT THE REQUIRED DETAILS THE UNSECURED LOANS TO THE EXTENT OF RS.1 14 49 265/ - WERE TREATED AS UNEXPLAINED CASH - CREDITS BY THE ASSESSING OFFICER AND ASSESSED U/S 68 OF THE ACT. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND IT IS NOTICED THAT EVEN BEFORE THE CIT(A) ASSESSEE DID NOT RESPOND TO THE VARIOUS NOTICES OF HEARING. HOWEVER WITH REGARD TO THE AFORESAID ADDITION THE CIT(A) NOTICED THAT THE TAX AUDIT REPORT FURNISHED BY THE ASSESSEE REVEALED THAT THE LOANS WERE OBTAINED FROM THREE CONCERNS WHOSE PAN NUMBERS WERE AVAILABLE. THE CIT(A) ALSO NOTED THAT IN THE CASE OF TWO OF THE LOAN CREDITORS ASSESSMENTS WERE COMPLETED BY THE VERY SAME ASSESSING OFFICER. IN THIS BACKGROUND THE CIT(A) NOTED THAT WHEN THE IDENTITY OF THE CREDITORS ARE DISCLOSED AND IT IS FOUND THAT THEY ARE AS SESSED TO TAX THE ONUS SHIFTS FROM THE ASSESSEE TO THE ASSESSING OFFICER TO DEMONSTRATE THE LACK OF CREDIT - WORTHINESS AND THEREFORE HE PROCEEDED TO 4 ITA NOS. 7255 TO 7257/MUM/2014 M/S. BRIGHT GLOBAL PAPER PVT. LTD. DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. AGAINST SUCH A DECISION OF THE CIT(A) REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING THE LD. CIT - DR CANVASSED THAT THE CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT IN THE ABSENCE OF CONFIRMATION OR DETAILS BEING FURNISHED BY THE ASSESSEE THE SOURCE OF FUNDS OF THE CREDITORS WERE NOT VERIFIABL E AND THEREFORE THE ADDITION HA S BEEN WRONGLY DELETED. 6. WE HAVE CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE SUBMISSION PUT FORTH BY THE LD. CIT - DR. NOTABLY THE ASSESSING OFFICER HAD MADE THE ADDITION U/S 68 OF THE ACT WHICH REQUIR ES THE ASSESSEE TO ESTABLISH THE NATURE AND SOURCE OF CREDITS APPEARING IN THE ACCOUNT BOOKS. IN THE PRESENT CASE AS THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER REVEALS ASSESSEE DID NOT FURNISH ANY DETAIL DURING THE ASSESSMENT PROCEEDINGS. THE CIT( A) HOWEVER NOTED THAT THE THREE CREDITORS WERE INCOME - TAX ASSESSEES AND TWO OF THEM WERE SUBJECT TO ASSESSMENT BY THE SAME ASSESSING OFFICER. FOR THIS REASON HE HAS PROCEEDED TO DELETE THE ADDITION CONSIDERING THAT THE ONUS SHIFTED TO THE ASSESSING OFF ICER. IN OUR CONSIDERED OPINION THE CIT(A) MISSED THE POINT THAT IN THE ABSENCE OF ANY DETAILS HAVING BEEN FURNISHED BY THE ASSESSEE TO THE ASSESSING OFFICER THE ONUS CANNOT BE SAID TO HAVE SHIFTED TO THE ASSESSING OFFICER. OSTENSIBLY IN - PRINCIPLE TH E POINT MADE OUT BY THE CIT(A) CANNOT BE DISPUTED S O HOWEVER IT HAS TO BE APPRECIATED AS TO WHETHER IN THE FACTS OF THE PRESENT CASE THE MATERIAL AND EVIDENCE AVAILABLE ON RECORD IS ENOUGH TO SATISFY THE INGREDIENTS OF SEC. 68 OF THE ACT WHICH CASTS AN ONUS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE CREDITS. IT IS JUDICIALLY WELL - SETTLED THAT IN ORDER TO DISCHARGE THE ONUS CAST ON THE ASSESSEE U/S 68 OF THE ACT ASSESSEE IS REQUIRED TO JUSTIFY THE IDENTITY 5 ITA NOS. 7255 TO 7257/MUM/2014 M/S. BRIGHT GLOBAL PAPER PVT. LTD. CR EDIT - WORTHINESS OF THE CREDITO R AS ALSO THE GENUINENESS OF THE TRANSACTION. THE MERE FACT THAT THE CREDITORS ARE INCOME - TAX ASSESSEES WOULD IPSO FACTO NOT JUSTIFY THE INGREDIENTS OF CREDIT - WORTHINESS AND GENUINENESS OF THE TRANSACTION WHICH CAN BE EXAMINED BY THE INCOME - TAX AUTHORITI ES ONLY WHEN THE RELEVANT MATERIAL IS AVAILABLE FOR APPROPRIATE VERIFICATION. QUITE CLEARLY THE ORDER OF THE CIT(A) IS CONSPICUOUS BY THE ABSENCE OF FINDINGS ON ALL THE AFORESAID THREE INGREDIENTS OF SEC. 68 OF THE ACT AND THEREFORE WE ARE UNABLE TO SU STAIN HIS CONCLUSION OF DELETING THE ADDITION. ACCORDINGLY WE HEREBY SET - ASIDE THE ORDER OF THE CIT(A) ; BUT IN THE INTEREST OF JUSTICE AND FAIR PLAY RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL CARRY OUT APPROPRIATE VERIFICATI ON ON THE BASIS OF THE MATERIAL AND EVIDENCE THAT MAY BE SUBMITTED BY THE ASSESSEE BEFORE HIM. WE MAY MAKE IT CLEAR THAT IF THE ASSESSEE DOES NOT ASSIST THE ASSESSING OFFICER PROPERLY THE ASSESSING OFFICER SHALL BE FREE TO EXAMINE THE MATERIAL AVAILABLE WITH HIM WHICH HAS BEEN POINTED OUT BY THE CIT(A) NAMELY THE ASSESSMENT RECORDS OF TWO OF THE CREDITORS AVAILABLE WITH HIM IN ORDER TO ARRIVE AT THE APPROPRIATE CONCLUSION. BE THAT AS IT MAY WE DIRECT THE ASSESSING OFFICER TO ALLOW THE ASSESSEE A REAS ONABLE OPPORTUNITY OF BEING HEARD AND ONLY THEREAFTER PROCEED TO EVALUATE THE EFFICACY OF THE IMPUGNED UNSECURED LOAN IN TERMS OF SEC. 68 OF THE ACT AS PER LAW. THUS THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2005 - 06 IS ALLOWED AS ABOVE. 7. AT THE TIME OF HEARING THE LD. CIT - DR CONTENDED THAT THE FACTS AND DISPUTE IN ITA NOS. 7256/MUM/2014 & 7257/MUM/2014 FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 RESPECTIVELY ARE PARI MATERIA TO THOSE CONSIDERED IN ITA NO. 7255 /MUM/201 4 PERTAINING TO ASSESSME NT YEAR 200 5 - 6 ITA NOS. 7255 TO 7257/MUM/2014 M/S. BRIGHT GLOBAL PAPER PVT. LTD. 0 6 THEREFORE OUR DECISION THEREIN SHALL APPLY MUTATIS MUTANDIS IN THE SAID APPEAL S ALSO. 8. RESULTANTLY THE CAPTIONED APPEALS OF THE REVENUE ARE ALLOWED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 9 T H NOVEMBER 2017 SD/ - SD/ - ( RAVISH SOOD ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI DATE : 2 9 T H NOVEMBER 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R B BENCH MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T MUMBAI