IRISHMAN STEELS P. LTD, MUMBAI v. ITO 8(2)4, MUMBAI

ITA 906/MUM/2009 | 2005-2006
Pronouncement Date: 14-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 90619914 RSA 2009
Bench Mumbai
Appeal Number ITA 906/MUM/2009
Duration Of Justice 1 year(s) 11 month(s) 3 day(s)
Appellant IRISHMAN STEELS P. LTD, MUMBAI
Respondent ITO 8(2)4, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted I
Tribunal Order Date 14-01-2011
Date Of Final Hearing 10-08-2010
Next Hearing Date 10-08-2010
Assessment Year 2005-2006
Appeal Filed On 11-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I : MUMBAI BEFORE SHRI S.V. MEHROTRA (AM) AND SHRI D.K. AGAR WAL (JM) ITA NO.906/MUM/2009 ASSESSMENT YEAR : 2005-06 IRISHMAN STEELS PVT. LTD. N-15 JALVAYU VIHAR HIRANANDANI GARDENS POWAI MUMBAI-400 072. ..( APPELLANT ) P.A. NO. (AABCI 2110 D) VS. INCOME TAX OFFICER-8(2)(4) AAYAKAR BHAVAN 2 ND FLOOR M.K. ROAD MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHR I B.M. AGARWAL RESPONDENT BY : SHRI S.K. SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 22.12.2008 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE BUSINESS OF TRADING IN IRON & STEEL. DU RING THE COURSE OF ASSESSMENT IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS SHOWN INCREASE OF RS.24.00 LACS IN SHARE CAPITA L DURING THE YEAR. ACCORDINGLY A SHOW CAUSE NOTICE WAS ISSUE D TO THE ASSESSEE COMPANY TO EXPLAIN THE SOURCES OF INCREASE IN SHARE CA PITAL OF RS.24.00 LACS. IN ANOTHER LETTER ISSUED TO THE ASSESSEE CO MPANY THE ASSESSING OFFICER HAS REQUESTED TO FURNISH COPY OF SHARE APPL ICATION ITA NO.906/MUM/2009 A.Y:2005-06 2 FORM AND TO ESTABLISH THE IDENTITY OF THE PERSONS GENU INENESS OF TRANSACTIONS AND THE CREDITWORTHINESS OF THE PERSONS FROM W HOM THE SHARE CAPITAL AMOUNT WAS RECEIVED. THE ASSESSING OFFICER HA S FURTHER ASKED THE ASSESSEE COMPANY TO SUBMIT COPY OF THE BANK ACCOUNT FOR THE COMPANY COPY OF BANK STATEMENT OF THE PERSON WHO H AS MADE THE INVESTMENTS SOURCES OF SUCH INVESTMENT PAN NUMBER OF PER SONS COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED AND CONFIRMATION OF THE PARTIES. AGAIN THE ASSESSING OFFICER HAS WRITTEN A LE TTER ASKING FOR SPECIFIC DETAILS IN THIS REGARD AS GIVEN ON PAGE-2 OF THE ASSESSMENT ORDER. IN RESPONSE TO THE SHOW CAUSE NOTICE THE ASSESSEE COM PANY HAS SUBMITTED THE REPLY STATING THAT SHARES ALLOTTED RS.2 4.00 LACS DIVIDED INTO 2400 EQUITY SHARES OF RS.10/- EACH AT A PR EMIUM OF RS.90/- PER SHARE. BUT NO SPECIFIC DETAILS HAVE BEEN S UBMITTED AS CALLED FOR BY THE ASSESSING OFFICER. AGAIN THE ASSESSING OF FICER HAS GIVEN SHOW CAUSE NOTICE TO SUBMIT THE SPECIFIC DETAILS AS CALL ED FOR. BUT NO DETAIL WAS SUBMITTED. THEN THE ASSESSING OFFICER H AS ISSUED NOTICE U/S.133(6) OF THE INCOME TAX ACT 1961 (THE ACT) TO THE FOLLOWING PARTIES: UJWAL ENTERPRISES-NALASOPARA RS.16 50 000/- OMKAR COMPUTERS-THANE RS. 3 50 000/- PRIYA CORPORATION-MIRA ROAD RS. 4 00 000/- BUT NEITHER THE ASSESSEE NOR THE PARTIES HAVE SUBMITTED A NY REPLY TO THE ASSESSING OFFICER. KEEPING IN VIEW THESE FACTS THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE HAS FAILED TO ESTABLISH T HE IDENTITY CAPACITY AND GENUINENESS OF TRANSACTIONS AND HENCE HE MADE AN ADDITION OF RS.24.00 LACS UNDER SECTION 68 OF THE ACT. AP ART FROM THIS THE ASSESSING OFFICER IN THE ABSENCE OF ANY MATERIAL HAS ALSO MADE THE DISALLOWANCE OF EXPENSES RS.3 75 234/- AND DEPRECIATI ON ITA NO.906/MUM/2009 A.Y:2005-06 3 RS.2 36 104/- AND ACCORDINGLY COMPLETED THE ASSESSMENT AT A N INCOME OF RS.28 67 510/- VIDE ORDER DATED 31.12.2007 PASSED U /S.143(3) OF THE ACT. ON APPEAL THE LD. CIT(A) WHILE RELYING ON CE RTAIN DECISIONS APPEARING AT PAGE-4-5 OF THE ORDER HELD THAT THE AP PELLANT HAD FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE ITS CL AIM BEFORE THE ASSESSING OFFICER AND BEFORE HIM CONFIRMED ALL THE A DDITIONS MADE BY THE ASSESSING OFFICER. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US. 4. GROUND NO.1 AND 2 ARE AGAINST SUSTENANCE OF ADDITI ON OF RS.24.00 LACS MADE BY THE ASSESSING OFFICER U/S.68 OF THE ACT . 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE AT THE OUTSET SUBMITS THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS STATED THAT NO REPLY/DETAILS HAVE BEEN RECEIVED FROM T HE PARTIES TO WHOM NOTICE U/S.133(6) WAS ISSUED. HOWEVER ON ENQUIRY T HE ASSESSEE WAS INFORMED THAT THE PARTIES HAVE NOT RECEIVED A NY NOTICE U/S.133(6) AND IN SUPPORT HE ALSO PLACED ON RECORD THEIR LETTERS CONFIRMING THAT THEY HAVE NOT RECEIVED ANY NOTICE U/S.1 33(6) OF THE ACT. IN THE LIGHT OF THE ABOVE HE SUBMITS THAT IN TH E INTEREST OF JUSTICE THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFF ICER. 6. ON THE OTHER HAND THE LD.DR WHILE RELYING ON THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF THE ISSUE IS SET ASIDE TO THE FILE OF THE ASSESSING OFF ICER. 7. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD INCLUDING LE TTERS FILED BY THE ASSESSEE OF THREE PARTIES NAMELY UJWAL ENTERPRISES OMKAR COMPTERS ITA NO.906/MUM/2009 A.Y:2005-06 4 AND PRIYA CORPORATION TO SHOW/CONFIRM THAT THEY HAVE NOT RECEIVED ANY NOTICE U/S.133(6) OF THE ACT AND IN THE ABSENCE IF AN Y CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE TO SHOW OTHER WISE WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER SHO ULD GO BACK TO THE FILE OF THE ASSESSING OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEN D BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECI DE THE SAME AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREIN ABOVE A ND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO.3 IS AGAINST SUSTENANCE OF DISALLOWANCE OF ADMINISTRATIVE EXPENSES RS.3 75 234/-. 9. IT WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUN D THAT THE ASSESSEE FAILED TO GIVE DETAILS AND BILLS OF EXPENSES AND T HE LD. CIT(A) FOR THE SAME REASONS UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 10. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT THE ASSESSING OFFICER HAS IGNORED THE DETAILS FILED B Y THE ASSESSEE SUCH AS PARTY-WISE AND MONTH-WISE DETAILS OF EXPENSES VOUCH ERS AND MONTHLY SUMMARY OF EXPENSES ALONGWITH EXPLANATION DATE D 23.11.2007 THEREFORE THE ISSUE MAY BE SET ASIDE TO TH E FILE OF THE ASSESSING OFFICER. 11. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER O F THE ASSESSING OFFICER AND THE LD. CIT(A) . ITA NO.906/MUM/2009 A.Y:2005-06 5 12. AFTER CAREFULLY HEARING THE RIVAL PARTIES AND PER USING THE MATERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE AGAINST THE SUBMISSION OF THE ASSESSEE WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINAT ION IN THE LIGHT OF ASSESSEE'S LETTER DATED 23.11.2007 AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT A ND SEND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WH O SHALL DECIDE THE SAME AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREI N ABOVE AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THER EFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 13. GROUND NO.4 IS AGAINST THE SUSTENANCE OF DISALLOWANCE OF DEPRECIATION RS.2 36 104/-. 14. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIM ED DEPRECIATION OF RS.2 36 104/- BUT HAS NOT PRODUCED ANY BILLS OF PURCHASE OF FIXED ASSETS ON WHICH DEPRECIATION HAS BEEN CLAI MED AND ALSO FAILED TO ESTABLISH THE LOCATION AND USE OF THOSE ASSE TS HENCE HE DISALLOWED THE CLAIM OF DEDUCTION OF RS.2 36 104/-. ON APPEAL THE LD. CIT(A) WHILE AGREEING WITH THE VIEW OF THE ASSESSING OF FICER UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 15. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT THE ASSESSEE VIDE HIS LETTER DATED 23.11.2007 HAS FI LED THE DETAILS WHEREIN NAMES ADDRESSES OF THE PARTIES FROM WHOM THE F IXED ASSETS WERE PURCHASED ETC. WAS SUBMITTED. HOWEVER THE ASSESSING OF FICER WHILE DISALLOWING THE SAME HAS NOT CONSIDERED THE ABOVE DETAILS ITA NO.906/MUM/2009 A.Y:2005-06 6 THEREFORE THE ORDERS PASSED BY THE REVENUE AUTHORITIE S ON THIS ACCOUNT MAY ALSO BE SET ASIDE TO THE FILE OF THE ASSESSING O FFICER. 16. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER O F THE ASSESSING OFFICER AND THE LD. CIT(A). 17. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE RIVA L PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE ABSE NCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE AGAI NST THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE WE ARE OF T HE VIEW THAT THIS ISSUE ALSO REQUIRES FURTHER EXAMINATION AT T HE END OF THE ASSESSING OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDER PASSE D BY THE REVENUE AUTHORITIES ON THIS ACCOUNT ALSO AND SEND BACK TH E MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE SA ME AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREIN ABOVE AND ACCORDI NG TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE . THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE PARTLY ALLOW ED FOR STATISTICAL PURPOSES. 18. IN THE RESULT ASSESSEE'S APPEAL IS PARTLY ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.1.2011. SD/- SD/- (S.V. MEHROTRA) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 14.1.2011. JV. ITA NO.906/MUM/2009 A.Y:2005-06 7 COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.