Income Tax Appellate Tribunal - Mumbai
Acit Cen Cir 2, Thane vs A.C. Chenna Reddy, Panvel on 15 March, 2018
आयकर अपीऱीय अधिकरण, मुंबई न्यायपीठ, जे, मुंबई ।
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES "J", MUMBAI श्री जोगगन्दय स हिं , न्मायमक दस्म एवुं श्री एन. के. प्रधान, रेखा दस्म, के भक्ष Before Shri Joginder Singh, Judicial Member, and Shri N.K. Pradhan, Accountant Member ITA NO. 1850/Mum/2011 Assessment Year: 2006-07 ACIT, Central Circle-2 Shri A.C. Chenna Reddy Thane Pawar Industrial बनाम/ Shivaji Nagar, Village Estate, Edulji Road Gavhan, Panvel 410 206 Vs. Charai, Mumbai 400 601 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. ACDPA3902G ITA NO. 1937/Mum/2011 Assessment Year: 2006-07 Shri A.C. Chenna Reddy ACIT, Central Circle-2 Flat no.103, Manisha Tower बनाम/ Thane Pawar Industrial Tata Colony, Mulund (E) Estate, Edulji Road Vs. Mumbai 400 081 Charai, Mumbai 400 601 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. ACDPA3902G 2 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions IT(SS)A NO. 29/Mum/2012 Block Period: 01.04.1996 - 26.03.2003 Shri A.C. Chenna Reddy ACIT, Central Circle-2 Flat no.103, Manisha Tower बनाम/ Thane Pawar Industrial Tata Colony, Mulund (E) Estate, Edulji Road Vs. Mumbai 400 081 Charai, Mumbai 400 601 C/o Shri Rajkumar Jaju 179, L.T. Road, E-302, Ashok Nagar Old, Vazira Naka, Borivali (West) Mumbai 400 091 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. ACDPA3902G IT(SS)A NO. 54/Mum/2010 Block Period: 01.04.1996 - 26.03.2003 Shri A.C. Chenna Reddy ACIT, Central Circle-2 Flat no.103, Manisha Tower बनाम/ Thane Pawar Industrial Tata Colony, Mulund (E) Estate, Edulji Road Vs. Mumbai 400 081 Charai, Mumbai 400 601 C/o Shri Prakash Jhunjhunwala, C.A. 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. ACDPA3902G 3 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions ITA NO. 4630/Mum/2012 Assessment Year: 2006-07 M/s. A.C. Chenna Reddy & ACIT, Central Circle-2 Akshar Filter Combine बनाम/ Thane Pawar Industrial Flat no.103, Manisha Tower Estate, Edulji Road Vs. Tata Colony, Mulund (E) Charai, Mumbai 400 601 Mumbai 400 081 C/o Shri Prakash Jhunjhunwala, C.A. 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAFFA9186J ITA NO. 4631/Mum/2012 Assessment Year: 2006-07 M/s. A.C. Chenna Reddy ACIT, Central Circle-2 Flat no.103, Manisha Tower बनाम/ Thane Pawar Industrial Tata Colony, Mulund (E) Estate, Edulji Road Vs. Mumbai 400 081 Charai, Mumbai 400 601 C/o Shri Prakash Jhunjhunwala, C.A. 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAFFA9186J 4 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions ITA NO. 4632/Mum/2012 Assessment Year: 2006-07 M/s. A.C. Chenna Reddy ACIT, Central Circle-2 (Firm), Flat no.103, बनाम/ Thane Pawar Industrial Manisha Tower Estate, Edulji Road Vs. Tata Colony, Mulund (E) Charai, Mumbai 400 601 Mumbai 400 081 C/o Shri Prakash Jhunjhunwala, C.A. 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAIFA5938P ITA NO. 4678/Mum/2011 Assessment Year: 2007-08 ACIT, Central Circle-2 Shri A.C. Chenna Reddy Thane Pawar Industrial बनाम/ Flat no.103, Manisha Estate, Edulji Road Tower, Tata Colony Vs. Charai, Mumbai 400 601 Mulund (Esdy) Mumbai 400 081 (याजस्व /Revenue) (यनधाारयती /Assessee) P.A. No. AAIFA5938P 5 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions ITA NO. 4698/Mum/2011 Assessment Year: 2007-08 Shri A.C. Chenna Reddy ACIT, Central Circle-2 Flat no.103, Manisha Tower बनाम/ Thane Pawar Industrial Tata Colony, Mulund (E) Estate, Edulji Road Vs. Mumbai 400 081 Charai, Mumbai 400 601 C/o Shri Prakash Jhunjhunwala, C.A. 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. ACDPA3902G ITA NO. 4697/Mum/2011 Assessment Year: 2007-08 M/s. A.C. Chenna Reddy & ACIT, Central Circle-2 Akshar Filter Combine बनाम/ Thane Pawar Industrial Flat no.103, Manisha Tower Estate, Edulji Road Vs. Tata Colony, Mulund (E) Charai, Mumbai 400 601 Mumbai 400 081 C/o Shri Prakash Jhunjhunwala, C.A. 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAFFA9186J 6 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions C.O. NO.51/Mum./2012 Arising out of ITA NO. 4677/Mum/2011 Assessment Year: 2007-08 M/s. A.C. Chenna Reddy ACIT, Central Circle-2 (Firm), C/o Shri Prakash बनाम/ Thane Pawar Industrial Jhunjhunwala, C.A. Estate, Edulji Road Vs. 5, Jolly Bhawan no.2, Charai, Mumbai 400 601 Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAIFA5938P ITA NO. 4679/Mum/2011 Assessment Year: 2007-08 ACIT, Central Circle-2 M/s. A.C. Chenna Reddy Thane Pawar Industrial बनाम/ & Akshar Filter Combine Estate, Edulji Road Flat no.103, Manisha Vs. Charai, Mumbai 400 601 Tower, Tata Colony Mulund (East) Mumbai 400 081 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAFFA9186J 7 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions C.O. NO.52/Mum./2012 Arising out of ITA NO. 4679/Mum/2011 Assessment Year: 2007-08 M/s. A.C. Chenna Reddy & ACIT, Central Circle-2 Akshar Filter Combine बनाम/ Thane Pawar Industrial C/o Shri Prakash Estate, Edulji Road Vs. Jhunjhunwala, C.A. Charai, Mumbai 400 601 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. AAFFA9186J C.O. NO.49/Mum./2012 Arising out of ITA NO. 4680/Mum/2011 Assessment Year: 2007-08 M/s. Sri Ganapati Swamiji ACIT, Central Circle-2 Constructions बनाम/ Thane Pawar Industrial C/o Shri Prakash Estate, Edulji Road Vs. Jhunjhunwala, C.A. Charai, Mumbai 400 601 5, Jolly Bhawan no.2, Ground Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020 (यनधाारयती /Assessee) (याजस्व /Revenue) P.A. No. यनधाारयती की ओर से / Assessee by Shri Prakash G. Jhunjhunwala याजस्व की ओर से / Revenue by Shri B. Srinivas a/w Ms. Aarju Garodia ुनवाई की तायीख / Date of Hearing : 14/03/2018 आदे श की तायीख /Date of Order: /03/2018 8 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions आदे श / O R D E R Per Bench These appeals are by different assessees, challenging the impugned orders of the ld. first appellate authority. The assessees have also filed cross objections for assessment year 2007-08.
2. During the hearing, the ld. Counsel for the assessee, Shri Prakash G. Jhunjhunwala, contended that the main appeal is for the assessment year 2006-07 (ITA no.1850/Mum./2011) which goes to the root of the matter. It was contended that during the assessment proceedings, the cases of the present assessee could not be adjudicated by the ld. Assessing Officer as the books of accounts had already been lost and, thus, could not be produced before the ld. Assessing Officer. It was also pleaded that the Ld. Commissioner of Income Tax (Appeal) as well as the Tribunal has already granted part relief to the assessees. At this stage, the ld. CIT-
D.R., Shri D. Srinivasa, along with Ms. Aarju Garodia, strongly disputed the contention of the ld. Counsel for 9 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions the assessee by inviting our attention to the assessment order by explaining that a search and seizure action u/s 132 of the Act was carried out on 26.03.2003. A strong plea was raised that various notices including u/s 148, 143(2), 142(1) of the Act and show cause notice were duly issued / served upon the assessee. The assessee neither attended the proceedings nor furnished the required details, therefore, the ld. Assessing Officer was forced to frame assessment u/s 144 r/w section 147 of the Act. The crux of the argument is that the ld.
Assessing Officer was precluded from examining the factual matrix. It was also pleaded that the necessary details / books of account were never produced by the assessee before the ld. Assessing Officer. It was also explained that the Ld. Commissioner of Income Tax (Appeal) admitted additional evidence and granted part relief to the assessee which is in violation of rule 46A of the I.T. Rules, 1962. It was asserted that before the Ld. Commissioner of Income Tax (Appeal), the assessee did not produce any evidence explaining that the income of the individual actual pertains to the firm, which 10 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions requires re-appraisal of facts. At this stage, the ld.
Counsel for the assessee explained that the books of accounts were lost, therefore, could not be produced before the ld. Assessing Officer. It was also pleaded that if the Bench so desires, the cross objections of the assessee may also be sent to the file of the Assessing Officer.
2. We have considered the rival submissions and perused the material available on record. The facts in brief are that, a search and seizure action u/s 132 of the Act was carried out at the premises of the assessee on 26.03.2003. It was noticed that the assessee has not filed the return of income for the year under consideration within the specified limit provided u/s 139 of the Act. A notice u/s 148 of the Act dated 30.01.2009 was served upon the assessee on 02.02.2009. The assessee, vide letter dated 10.02.2009, sought time for filing the return of income. As per the Revenue, various notices were issued to the assessee but there was no compliance. Vide office letter dated 11 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions 05.11.2009, the assessee was asked that since there was no compliance to various notices, why the income should not be assessed as under:-
(1) Notice u/s 142(1) dated 08.10.2007 issued and served on the assessee to prepare a true and correct return of income for the relevant assessment year and to deliver the same within 15 days from receipt of the notice. However, there was no compliance.
(2) Notice u/s 148 of the I.T. Act, 1961 dated 30/01/09 was issued and duly served on the assessee on 02/02/09 asking the assessee to produce books of account, bank pass book, contracts and also to produce the books of accounts of following concerns:-
(a) Shri A.C. Chenna Reddy
(b) M/s. A.C. Chenna Reddy
(c) M/s. Shri Ganapati Swamiji Construction
(d) A.C. Chenna Reddy & Akshar Filter Combine;
(e) M/s. Seven Hill Construction; and
(f) M/s. Sri Srinivasa Construction.
There was no compliance to this letter.
12 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions Summon was issued to the assessee on 30/01/09, calling the attendance with books of account with bank pass book, contracts entered into by the assessee with respect to aforementioned concerns. Another opportunity was provided to the assessee along with production of details for 9.02.2009 to which also there was no compliance. Statement on oath of Shri A.C. Chenna Reddy was recorded on 06.02.2009 wherein he made submissions that the necessary details will be furnished on 09.02.2009. However, the representative of the assessee vide letter dated 09.02.2009, filed on 10.01.2009, stated that the legality of the income declared is being verified and after ascertaining the details the necessary return of income will be revised and this process will require 15 to 20 days. Considering the non co-operation of the assessee penal proceedings u/s 271F were initiated with the issuance of notice on 24.03.2009, which was served upon the assessee. One more opportunity was provided to the assessee vide notice u/s 142(1), issued on 24.03.2009 and served upon the assessee on 25.03.2009, calling for the details 13 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions on 09.04.2009. Again there was non-compliance. The assessee vide letter dated 30.03.2009, against sought for adjournment. However, there was no compliance on the said date. The assessee vide letter dated 14.04.2009 filed on 15.04.2009, against sought adjournment which was granted for 12.05.2009. Again there was no compliance and no details were filed. Further opportunity was given vide notice u/s 142(1) dated 18.09.2009, for compliance on 06.10.2009. Again neither there was any compliance nor any details were furnished. Show cause notice was issued as to why penalty u/s 271(1)(b) of the Act should not be initiated for each non-compliance. The assessee then contended that the return of income filed vide Sr. No.0051 on 07.08.2008, be treated as filed in response to notice u/s 148 of the Act. The Assessing Officer found that in spite of repeated and sufficient opportunity the assessee neither filed the revised return of income nor furnished the required details. Thus, summon u/s 131 of the Act was issued to the assessee which was also not complied with. Since the assessment was getting time barred on 14 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions 31.12.2009, and in view of the non-compliance by the assessee show cause notice was again issued as to why the assessment may not be completed on the basis mentioned in the assessment order. The assessee was also appraised as to why the income of the concerns of the assessee also may not be computed as income of the assessee. Notice u/s 143(2) dated 05.11.2009, for 16.11.2009 was served upon the assessee. On that date also the assessee neither attended nor furnished the details. One more opportunity was provided to the assessee vide notice u/s 142(1), served upon the assessee on 18.11.2009, for compliance on 27.11.2009.
On that date also, there was no compliance. In view of this factual matrix, the Assessing Officer placed reliance upon various judicial pronouncements, mentioned in the assessment orders and framed the assessment u/s 144 r/w section 147 determining the total income at Rs.4,68,17,363.
3. On appeal before the ld CIT(A), the assessee appeared, furnished details / written submissions. It is 15 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions noted that before the Ld. Commissioner of Income Tax (Appeal) neither the Assessing Officer was present nor any remand report was sought. It is noted that the assessee objected to the disallowance of expenses of Rs.
38,74,302, disallowance of machinery heir charges of Rs. 1,07,66,796, labour charges of Rs. 1,11,22,865, and granted part relief to the assessee. Considering the totality of facts we find that there is a violation of rule 46A of the Rules. As mentioned earlier, there is a complete non-cooperation and non-compliance by the assessee during the assessment proceedings. Such a non-cooperative attitude cannot be appreciated. It is further noted from IT(SS)A no.29/Mum./2012 (Para-3.1 at Page-19) the ld.CIT(A) has observed as under:-
"3.1 Vide Grounds of appeal no.1 to 7, the appellant has raise various objections in respect of procedural aspect of the assessment. The first object is that the A.O. had issued notice u/s 158BC(a)(i) instead of notice u/s 158BC(a)(ii) as the search was conducted after 01.04.1997. This contention of appellant has no bearing on the assessment because the notice issued was in substance and effect in conformity with the according to the intent and purpose of calling for the return of income u/s 158BC(a) of the Act. Therefore, in view of provisions of section 292B, the contention of appellant is rejected. As regards
16 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions the assessment order having been passed hastily, I find that the A.O. had given as many as 10 opportunities of being heard duly recorded by the A.O. in Para-5 of the assessment order. Further, the notice /s 143(2) along with notice under section 142(1) was issued on 26/09/2011 well before the limitation date for the completion of assessment. Therefore, I am of the considered view that sufficient opportunities of being heard have been provided by the A.O. The appellant has raised objections that the income belonging to the partnership firm cannot be taxed in the hands of the appellant in view of the provisions of sections 184 & 185. However, the appellant has not pointed out any specific instances of income of firm having been added in the hands of appellant. On perusal of assessment order, it is noticed that the investment, expenditure and receipts pertaining to assessee have only been considered and added in the total income of the assessee. Thus, the contentions of the appellant in this regard are baseless and hence deserved to be rejected. Accordingly, Ground nos.1 to 7 are dismissed." [Emphasis supplied] Fro the above, it is abundantly clear that even the ld.CIT(A) was very much satisfied that more than 10 opportunities of being heard were provided to the assessee and various notices were issued and ultimately due to limitation, the Assessing Officer had to frame assessment u/s 144 r/w section 147 of the Act. It is further noted that before the Ld. Commissioner of Income Tax (Appeal) assessee raised objections that the income belonging to the partnership firm cannot be 17 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions taxed in the hands of the appellant. No specific instances of income of firm having been added in the hands of the assessee was pointed out. There is a further observations that investment, expenditure and receipts pertaining to the assessee have only been considered and added to the total income of the assessee. In Para-3.2 (Page-20) it has been observed that the assessee made payment to the extent of Rs.
61,92,000 including payment by cheque at Rs. 3,00,000 The payment of cheque of Rs. 3,00,000 was claimed to be recorded in the books of account and the remaining payment towards duplex flat at Rs. 59,92,000 was not recorded in the books of account. The Ld. Commissioner of Income Tax (Appeal) has duly mentioned various pages. However, it is noteworthy that the assessee did not produce books of accounts before the Assessing Officer for examination / verification. Before us, the assessee has filed paper book running into Pages-1 to 281 and 73 to 108 by claiming that the above documents were duly filed before the Assessing Officer as well as before the Ld. Commissioner of Income Tax 18 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions (Appeal). Therefore, considering the totality of facts mentioned in the respective appeals and the arguments advanced from both the sides, we deem it appropriate to remand all these files (the assessee as well as of the Revenue) including cross objections filed by the assessee, to the file of the Assessing Officer to examine the genuineness of the contract receipts, genuineness of partnership deed, claim of the assessee as to why the income belonging to the partnership firm cannot be taxed in the hands of the individual assessee in the light of sections 184 and 185 of the Act. It is also noted that even the Ld. Commissioner of Income Tax (Appeal) was never convinced about the genuineness of the firm and the assessee did not produce the necessary details. The Assessing Officer is further directed to frame the assessment afresh un-influenced by any observation made in the orders of the appellate authorities. The assessee is directed to produce the necessary evidence, if any, to substantiate their claims and be given opportunity of being heard. The assessees are also directed to co-operate in early disposal of the appeal.
19 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions Thus, all the appeals along with cross objections are remanded back to the file of the Assessing Officer for fresh adjudication in accordance with law.
Finally, the appeals of the assessees as well as of the Revenue along with cross objections are allowed for statistical purposes only.
This Order was pronounced in the open court in the presence of learned representatives from both sides at the conclusion of the hearing on 13th March, 2018.
Sd/- Sd/-
(N.K. Pradhan) (Joginder Singh)
ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER
भफ
ुिं ई Mumbai; ददनािंक Dated : 13/03/2018 Pradeep J. Chowdhury, Sr. PS 20 Shri A.C. Chenna Reddy, M/s. A.C. Chenna Reddy & Akshar Filter Combine, M/s. A.C. Chenna Reddy (Firm) & M/s. Sri Ganapati Swamiji Constructions आदे श की प्रयिलऱपप अग्रेपषि/Copy of the Order forwarded to :
1. अऩीराथी / The Assessee
2. प्रत्मथी / The Revenue
3. आमकय आमक् ु त,(अऩीर) / The CIT, Mumbai.
4. आमकय आमक् ु त / CIT(A)- , Mumbai
5. ववबागीम प्रयतयनगध, आमकय अऩीरीम अगधकयण, भफ ुिं ई / DR, ITAT, Mumbai
6. गार्ा पाईर / Guard file.
आदे शानसार/ BY ORDER, उप/सहायक पुंजीकार (Dy./Asstt. Registrar) आयकर अपीऱीय अधिकरण, भफ ुिं ई / ITAT, Mumbai