BRIJWASI FASHION P. LTD, MUMBAI v. DCIT CEN CIR-31, MUMBAI

ITSSA 34/MUM/2009 | misc
Pronouncement Date: 30-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 3419916 RSA 2009
Assessee PAN AAACB4698J
Bench Mumbai
Appeal Number ITSSA 34/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 10 day(s)
Appellant BRIJWASI FASHION P. LTD, MUMBAI
Respondent DCIT CEN CIR-31, MUMBAI
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-04-2010
Assessment Year misc
Appeal Filed On 20-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI. BEFORE S/SHRI S.V.MEHROTRA AM & VIJAY PAL RAO JM I.T.(SS)A. NO. 34/MUM/2009 BLOCK PERIOD: 1.4.1988 TO 25.11.1997 BRIJWASI FASHION P. LTD. V. THE DCIT CENT. CIRC LE-31 PLOT NO.4 226 SONAWALA BLDG. MUMBAI. GOREGAON (E) MUMBAI-63. PA NO.AAACB 4698 J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PARAS S.SAVLA RESPONDENT BY : SHRI S.S.RANA O R D E R PER S.V.MEHROTRA AM THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.1.2009 OF LD CIT (A)-IV MUMBAI FOR THE BLOCK PERIOD 1.4.198 8 TO 25.11.1997. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. LD CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.2 77 634/- ON ACCOUNT OF REPAIRS AND RENOVATION OF FACTORY PREMIS ES WHICH WAS INCURRED BY THE OWNER OF THE PREMISES FROM WHOM THE ASSESSEE HAD TAKEN THE FACTORY PREMISES ON RENT THEREFORE THE ADDITION B E DELETED. 2. THE LD CIT (A) ERRED IN HOLDING THE SUM RECEIVED FROM MR HARIOM RAJORIA OF RS.1 55 000/- BY ACCOUNT PAYEE CHEQUE AS UNEXPLAINED CASH CREDIT MERELY BECAUSE CASH WAS DEPOSITED IN THE BAN K ACCOUNT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD PROVED THE IDENTITY OF THE PARTIES GENUINENESS AND CREDITWORTHINESS OF THE PA RTY HENCE THE ADDITION MAY BE DELETED. 3. LD CIT (A) ERRED IN TREATING RS.30 000/- AS UNEX PLAINED CASH CREDIT RECEIVED FROM 3 PARTIES AS TEMPORARY CASH LOAN WHIC H WERE ALSO REPAID DURING THE YEAR. IT(SS) NO.34/M/2009 M/S. BRIJWASI FASHION P. LTD. 2 2. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IN THE RELEVANT BLOCK PERIOD ENDING 25.11.1997 CARRIED ON THE BUSINESS OF DRESS MAKIN G. A SEARCH AND SEIZURE ACTION U/S.132 WAS CARRIED OUT AT THE FACTORY PREMISES OF THE ASSE SSEE ON 25.11.1997. THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR THE BLOCK PERIOD DEC LARING TOTAL UNDISCLOSED INCOME AT NIL WHICH WAS COMPLETED ON 31.1.2000 DETERMINING THE UN DISCLOSED INCOME AT RS.14 81 757/- INTER ALIA MAKING FOLLOWING TWO AD DITIONS:- 1) RS.10 61 867/- ON ACCOUNT OF UNEXPLAINED EXPEND ITURE ON RENOVATION OF FACTORY. 2) RS.1 85 000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT S. 3. THE ASSESSEE PREFERRED APPEAL BEFORE LD CIT (A) WHO DELETED THE ENTIRE ADDITION. THEREAFTER THE REVENUE PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 17.3.2005 SET ASIDE THE ISSUE AND RESTO RED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO PASS THE ORDER AFRESH AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY THE AO PASSED THE IMPUGNED ASSESSMENT ORDER DETERMINING THE UNDISCLOSED INCOME AT RS.4 62 634/-. AS REGARDS TH E ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE ON RENOVATION OF FACTORY THE AO OBSERV ED THAT DURING THE COURSE OF SEARCH VARIOUS FACTORY REPAIR BILLS WERE FOUND AND SEIZED AS PER ANNEXURE A-6 TO PANCHANAMA DATED 25.11.1997 THE DETAILS HAVE BEEN GIVEN AT PA GES 2 & 3 OF THE ASSESSMENT ORDER WHICH AGGREGATED TO RS.18 71 719/-. HE POINTED OUT THAT AFTER CONSIDERING THE ASSESSEES SUBMISSIONS ADDITION OF RS.10 61 867/- WAS MADE IN THE FIRST ROUND OF PROCEEDINGS AND THEREFORE HE PROCEEDED TO EXAMINE THE DETAILS OF P AYMENT OF RS.10 61 867/- IN PURSUANCE TO THE TRIBUNALS ORDER. HE NOTICED THAT THERE WAS DUPLICATION OF BILLS INASMUCH AS THE ADDITION HAD BEEN MADE TAKING INTO ACCOUNT THE RUNN ING BILLS AS WELL AS FINAL BILLS SUBMITTED BY VARIOUS PARTIES. AFTER EXAMINATION OF THE BILLS HE OBSERVED THAT THE ASSESSEE EXPLAINED PAYMENT OF RS.8 09 852/- AND THEREFORE HE MADE ADDITION OF THE BALANCE AMOUNT OF RS.2 77 634/- AS UNEXPLAINED EXPENDITURE. 4. LD CIT (A) CONFIRMED THE AOS ACTION. IT(SS) NO.34/M/2009 M/S. BRIJWASI FASHION P. LTD. 3 5. LD COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 4 O F THE ASSESSMENT ORDER AND SPECIFICALLY MENTIONED THE FOLLOWING PAGE NOS. OF T HE SEIZED DOCUMENTS REPRODUCED IN THE ASSESSMENT ORDER: PAGE NO. AMOUNT 109 RS.95 000/- 117 RS 20 000/- 123 RS.1 15 000/- LD COUNSEL FOR THE ASSESSEE REFERRED TO PAGES 3 &4 OF BILL NO.26.12.1995 OF PB WHEREIN DETAILS OF RS.95 000/- ARE CONTAINED. HE FURTHER REFERRED TO PAGE 5 OF PB WHICH IS THE BILL DATED 20.12.1995 FOR RS.20 000/-. HE T HEREAFTER REFERRED TO PAGES 6 & 7 OF PB TO SUBMIT THAT THE SAME IS THE FINAL BILL IN RESPEC T OF ABOVE TWO RUNNING BILLS AND CONTAINED THE SAME BILLS. THUS HE SUBMITTED THAT I T IS A CASE OF DUPLICATION OF THE EXPENDITURE. HE THEREFORE SUBMITTED THAT THE MAT TER MAY BE RESTORED BACK TO THE FILE OF THE AO TO EXAMINE THESE BILLS. 6. LD D.R. SUBMITTED THAT ALL THE BILLS WERE EXTENS IVELY VERIFIED BY THE AO AND THEREFORE THERE IS NO NECESSITY TO RESTORE THE MAT TER BACK TO THE FILE OF THE AO. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE RECORD OF THE CASE. WE FIND THAT THE AO HAD SUBSTANTIALLY REDUCED THE ADDI TION MAINLY BECAUSE THERE WAS DUPLICATION OF BILLS ON ACCOUNT OF RUNNING BILLS AS WELL AS FINAL BILLS. THE CONTENTION OF THE LD COUNSEL FOR THE ASSESSEE IS THAT STILL THESE THREE ENTRIES ARE RESULTING INTO DOUBLE ADDITION ON ACCOUNT OF DUPLICATION OF BILLS. WE FI ND THAT THE AO AT PAGE 4 OF HIS ORDER HAS INTER ALIA OBSERVED AS UNDER: FURTHER THE ENTRY OF RS.2 06 601/- AT PAGE NO.125 INCLUDES RS.1 15 000/- OF PAGE 123 AND RS.91 623/- OF PAGE 127 HOWEVER HE HAS NOT MENTIONED ABOUT THE ENTRY AT PA GE 125 OF RS.2 06 601/-. THE AO WILL VERIFY THE CONTENTS OF THESE FINDINGS AND IF T HERE IS ONLY AN OMISSION OF NOT MENTIONING OF THE SUM OF RS.2 06 601/- THEN NO VAR IATION IS CALLED FOR IN THE ADDITION. FURTHER IF THE ENTRY AT PAGE 123 OF RS.1 15 000/- IS NOT SO INCLUDED IN RS.2 06 601/- THEN IT(SS) NO.34/M/2009 M/S. BRIJWASI FASHION P. LTD. 4 ASSESSEES SUBMISSION IS TO BE EXAMINED. WE ACCOR DINGLY CONSIDER IT IN THE INTEREST OF JUSTICE THAT THE MATTER BE RESTORED BACK TO THE FI LE OF THE AO TO EXAMINE THE FACTUAL ASPECT IN THIS REGARD AND TO DECIDE THE ISSUE ACCORDINGLY. GROUND NO.1 IS ALLOWED FOR STATISTICAL PURPOSES. 8. APROPOS GROUND NO.2 THE AO EXAMINED THE CASH CR EDIT OF RS.1 85 000/ WHICH WAS AS UNDER: I) SHRI HARIOM RAJORIA RS.1 55 000/- II) SHRI HARI MOHAN RS. 10 000/- III) SHRI ANIL KUMAR RS. 10 000/- IV) SHRI ASHOK KUMAR RS. 10 000/- RS.1 85 000/- AS REGARDS LOAN OF RS.1 55 000/- TAKEN FROM SHRI HA RIOM RAJORIA THE ASSESSEE RELIED ON THE BANK STATEMENT. THE AO OBSERVED THAT THE CAPAC ITY OF HARIOM RAJORIA TO MAKE THE HUGE DEPOSIT OF CASH IN HIS PASS BOOK OF RS.4 70 00 0/- APPROXIMATELY DURING THE PERIOD 2.4.97 TO 23.7.97 HAD NOT BEEN ESTABLISHED. NO EVID ENCE HAD BEEN FILED TO ESTABLISH THE CREDITWORTHINESS OF HARIOM RAJAROA WHO IS NO MORE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD ALSO NOT PRODUCED ANY EVIDENCE TO SHOW THAT ONE OF ITS SISTER CONCERN M/S. BRIJWASI FOOD PRODUCTS P LTD. HAD ADVANCED CASH LO AN OF RS.4 00 000/- APPROXIMATELY TO THESE EMPLOYEES IN 1992 WHICH WAS CLAIMED TO HAVE BEEN RECEIVED IN 1997. HE THEREFORE MADE AN ADDITION OF RS.1 55 000/-. 9. APROPOS GROUND NO.3 I.E.AS REGARDS LOAN OF RS.1 0 000/- EACH TAKEN FROM HARI MOHAN ANIL KUMAR AND ASHOK KUMAR IN CASH THE AO OBSERVED THAT THE ASSESSEE HAD NOT FILE23ANY EVIDENCE TO SUPPORT ITS CREDITORS. H E ACCORDINGLY TREATED THE AMOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE AND MADE THE ADD ITION. 10. LD CIT (A) CONFIRMED THE AOS FINDINGS RELYING ON THE DECISION IN THE CASE OF CIT V. MOHANKALA 291 ITR 278(SC). 11. LD COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE LOWER REVENUE AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAD RECEIVED BACK LOAN ADVANCED IN IT(SS) NO.34/M/2009 M/S. BRIJWASI FASHION P. LTD. 5 EARLIER YEARS TO THE EMPLOYEES. HE FURTHER SUBMITT ED THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THEREFORE NO ADDITION CO ULD BE MADE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE RECORD OF THE CASE. ADMITTEDLY IT IS THE SECOND ROUND OF PROCEEDINGS A S PER THE TRIBUNALS DIRECTIVES AND THEREFORE AT THIS STAGE OF PROCEEDINGS THE PLEA O F LD A.R. REGARDING FINDING OF NO MATERIAL DURING THE COURSE OF SEARCH CANNOT BE ACCEPTED BECA USE NOW THE ISSUE IS TO BE DECIDED IN THE LIGHT OF FINDINGS OF TRIBUNAL IN FIRST ROUND OF PROCEEDINGS. THE ASSESSEE HAD NOT FILED ANY CONFIRMATION LETTER NOR ANY EVIDENCE IN SUPPORT OF THE CREDITORS CAPACITY TO PAY THE CASH LOANS. THEREFORE THE ADDITION OF RS.30 000/- IS SUSTAINED. AS FAR AS ADDITION OF RS.1 55 000/- IS CONCERNED THE ONUS IS ON THE ASSE SSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTION INCLUDING THE CREDITWORTHINESS OF THE L ENDER. IT IS WELL SETTLED LAW THAT MERE RECEIPT OF LOAN THROUGH BANK IS NOT SUFFICIENT TO E STABLISH THE CREDITWORTHINESS OF LENDER AND GENUINENESS OF TRANSACTION. WE FIND THAT INSPI TE OF REPEATED OPPORTUNITIES THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH ITS CLAIM O F GIVING LOAN IN 1992 WHICH WAS CLAIMED TO HAVE BEEN RECEIVED BACK IN 1997. IN THE ABSENCE OF ANY EVIDENCE TO SUBSTANTIATE THE CLAIM ASSESSEES PLEA IS REJECTED. IN VIEW OF ABO VE DISCUSSION GROUND NO.2 & 3 IS REJECTED. 13. IN THE RESULT APPEAL IS PARTLY ALLOWED. PRONOUNCED ON 30 TH APRIL 2010 SD/- (VIJAY PAL RAO) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANT MEMBER) MUMBAI DATED 30 TH APRIL 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-IV MUMBAI 4. COMMISSIONER OF INCOME TAX II MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH-B. //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI IT(SS) NO.34/M/2009 M/S. BRIJWASI FASHION P. LTD. 6 DATE INITIALS 1. DRAFT DICTATED ON 26.4.10 PS 2. DRAFT PLACED BEFORE AUTHOR 26.4.10 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER IT(SS) NO.34/M/2009 M/S. BRIJWASI FASHION P. LTD. 7