Income Tax Appellate Tribunal - Mumbai
Nehal Brothers,Mumbai vs Income Tax Officer 23(2)(1), Mumbai on 25 November, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "B", MUMBAI
BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
AND SHRI RAHUL CHAUDHARY, JUDUCIAL MEMBER
MA No. 106/Mum/2024
(Arising out of ITA No. 2541/Mum/2023)
Assessment Year: 2016-17
Nehal Brothers Income Tax Officer
23(2)(1), Mumbai.
EW 4030, 4th Floor, Tower E,
Bharat Diamond Bourse, Vs.
Bandra Kurla Complex,
Bandra East, Mumbai-400051.
PAN: AAJFM 6428 R
(Appellant) (Respondent)
Present for:
Assessee by : Shri Rajiv Khandelwal
Revenue by : Shri R.R. Makwana, Sr. DR
Date of Hearing : 06.09.2024
Date of Pronouncement : 25.11.2024
ORDER
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
The miscellaneous application filed by the assessee is directed against the order of ITAT vide ITA No. 2541/M/2023 dated 21.01.2024.
2. The content of the miscellaneous application is re-produced as under:
"2. The applicants submit that following apparent mistakes have crept in the impugned order of the Hon'ble Tribunal.
2.1 Re Ground of Appeal No. 1(a)-
(a) The Honourable Tribunal in para 6 of the impugned order, in respect of the following five lenders, after observing that 'we find merit in the submissions of the assessee' deemed it appropriate to restore the issue to 2 MA No. 106/Mum/2024 Nehal Brothers the files of the assessing officer 'To examine the financial position and capital account status of the aforesaid five parties."
(i) Amish C. Shah (HUF)
(ii) Anish G. Pethani (HUF)
(iii) Rupa Jignesh Jhaveri
(iv) Shailesh Sevantilal Shah
(v) Sharmistha U. Pethani
(b) The Honourable Tribunal in para 7 of the impugned order has restored the matter to the assessing officer in respect of the following two lenders for the reason that 'to show as to how he is related to aforesaid parties. The Assessing Officer after determining assessee's degree of relation shall consider assessee's plea accordingly.
(i) Niraj Shailesh Mehta (HUF)
(ii) Nehal Shailesh Mehta (HUF)
(c) The Honourable Tribunal, in para 8 of the impugned order has dismissed the balance addition of ground of appeal no. 1(a) in respect of following lenders on the ground that the 'counsel for the assessee has not been able to make out a case either for deleting the addition or for re- verification'-
(i) ABC Corporation
(ii) Mita Hitendra Shah
(iii) Ravin M. Kothari
(iv) Sajil Rajesh Mehta
(v) Swati Gems 2.1.1 The applicants contend that during the course of hearing, the following facts have been brought to the notice of the Honourable Tribunal by the authorized representative of the applicants in respect of the aforesaid lenders:
(a) Refer the chart on page nos 19 and 20 of the paper book which gives the necessary details of loans obtained by the appellants, repayment of loan. wherever applicable, reference of page no of the paper book in respect of confirmation filed, bank statement of the Applicants, interest details, tax deducted at source (TDS) thereon, TDS certificate, lenders details ITR and/ or computation of total income, bank statement and 3 MA No. 106/Mum/2024 Nehal Brothers balance sheet/ ledger. It was specifically brought to the notice of the Honourable Tribunal that the Applicants have made repayment of the loans obtained from Rupa Jignesh Jhaveri (point no 2.1(a) above), ABC Corporation and Swati Gems (both in point no 2.1(c) above)
(b) The Authorised Representative brought to the notice of the Honourable Bench the fact of remand report of the Assessing Officer in respect of the additional evidences filed in respect of each of the 12 lenders (out of 16 lenders) which were for consideration before the Honourable Tribunal refer page nos. 199 to 203 of the paper book and response of the Applicants to the CIT(A) in respect of the said remand report refer page nos. 204 to 216 and 217 to 238 of the paper book. The following were specifically highlighted -
(i) That notice under section 133(6) has been issued by the Assessing Officer to all the lenders and that all the lenders have responded to such notice-refer page no. 202, point no 8
(ii) The Authorised Representative also referred to the letter dated November 18, 2019 of Sampat & Mehta, CAs addressed to the CIT(A) on behalf of the Applicants, in specific the table on page nos. 213 to 215 responding to the observations of the Assessing Officer in the remand report in respect of the creditworthiness of the lenders and genuineness of the transactions of loan, and also the amount of capital of the lenders, wherever the Applicants had the details. The Authorised Representative referred to the table on page no. 214 with specific reference to the amount of capital mentioned against each lender and stated that in respect of some lenders (given in point no 2.1(c)) above, the Applicants did not have the details of capital though the Assessing Officer had the same as the lenders had responded to the notice of the Assessing Officer under section 133(6) of the Act.
(c) In the case of Niraj Shailesh Mehta (HUF) (point no 2.1(b)(i), the Authorised Representative specifically mentioned that this is not a case of loan obtained, but is repayment of loan given to him earlier by the Applicants. Refer page no.136 for the confirmation furnished by the Applicants wherefrom it is evident that the opening balance is Rs 25,00,000 receivable by the Applicants and a further debit for Rs 1,28,855 thus, aggregating Rs 26,28,855 and against the said balance, the Applicants received Rs 27,00,000; and the addition made is also Rs 27,00,000. which is incorrect.4 MA No. 106/Mum/2024
Nehal Brothers
(d) In the case of Sajil Rajesh Mehta, the Authorised Representative referred to page no 215. and stated that the source of source has also been mentioned.
(e) The Authorised Representative thus, submitted that
(i) All the primary documents have been furnished by the Applicants
(ii) The lenders, without any exception, have responded to the notice of the Assessing Officer under section 133(6) of the Act
(iii) The primary onus having been discharged by the Applicants, the onus shifted to the Assessing Officer and
(iv) He has not brought any evidence on record to discredit the voluminous details furnished by the Applicants
(v) And in the passing, at the end, the Authorised Representative stated referring to page no 15 that the CIT(A) himself has applied the criteria of capital being more than the loan amount in respect of the four lenders, and deleted the addition, hence, the same criteria if applied to the aforesaid five lenders (point no 2(a)), the addition would be deleted 2.1.2 However, the Honourable Tribunal in deciding the issue in respect of the aforesaid five lenders (point no 2.1(a)), in para 6 of their order, without taking cognizance of the voluminous details furnished, recorded only the last argument/ passing reference as stated above in point no 2.1.1(e)(v), and restored the matter to the Assessing Officer.
2.1.3 The Applicants submit that in respect of the lenders mentioned in point no 2.1(a) and 2.1(b) above, the Honourable Tribunal ought to have decided the issue of section 68 inasmuch as all the information is available before the Honourable Tribunal to decide the identity and creditworthiness of the lenders and genuineness of the transactions of loan, rather than restoring the matter to the Assessing Officer. It would not be out of place to mention that all the information that was available before the Honourable Tribunal, was also available with the Assessing Officer and the CIT(A), and that no new material would be furnished/ presented before the Assessing Officer, if remanded, and hence, it would not serve any purpose to restore the matter to the Assessing Officer.
In view of the above, the Honourable Tribunal having not referred to any material/ evidence filed in the paper book that was referred during the course of hearing, goes to the root of the matter, and is a mistake apparent from record which needs to be rectified.
5 MA No. 106/Mum/2024Nehal Brothers 2.1.4 The Applicants further, submit that in respect of the lenders mentioned in point no 2.1(c) above, the decision of the Honourable Tribunal is perverse, de hors the materials on record, and without even referring to the said voluminous details and evidences, and hence, a mistake apparent on record that needs to be rectified.
2.1.5(α) Further, the Authorised Representative had also contended relying on the decision of Gujarat High Court in the case of Rohini Builders (256 ITR 360) that the Assessing Officer has allowed interest paid to the lenders and hence, the impugned addition under section 68 could not have been made. This fact is recorded by the Honourable (Tribunal in para 3.1 on page 3 of its order, but the same has not been adjudicated. It is trite that a Tribunal order suffers from an apparent mistake if the same does not adjudicate on a particular issue raised before it during the course of hearing and renders itself for rectification under section 254(2) of the Act.
b) The Applicants further. refer to the decision of jurisdictional High Court in the case of Skylark Build (ITXA No 616 of 2016 on the same issue. It is trite that a Tribunal order suffers from an apparent mistake if the same is not in conformity with a decision of the jurisdictional High Court and renders itself for rectification under section 254(2) of the Act.
In view of the above, the Applicants submit that the decision of the Honourable Tribunal requires to be rectified under section 254(2) of the Act.
3. In view of the above, the Applicants pray that -
(a) the Order of the Tribunal dated 25.01.2024 be suitably amended, or
(b) the Order of the Tribunal dated 25.01.2024 be recalled, or
(c) the Tribunal may grant such further and / or other reliefs as it deems fit."
3. The ld. Counsel submitted that assessee has filed all the supporting documents and details as evidences of genuineness of loan obtained before the authority. However, without disproving the same the loan amounts were treated as non-genuine. The ld. Counsel further submitted that assessee has also filed paper book before the ITAT comprising copies of bank statements, return of income loan confirmation letter etc. in support of its claim of 6 MA No. 106/Mum/2024 Nehal Brothers genuineness of the loan, however without considering the same, the ITAT has committed error in holding that assessee has not able to make out case for deleting the addition made by the lower authorities. The ld. Counsel has also referred the order of ITAT, Mumbai in the case of Genita Technologies & Services Pvt. Ltd. vs DCIT vide M.A. No. 439/M/2022.
4. On the other hand, ld. DR supported the order of lower authorities.
5. Heard both the sides and perused the material on record.
6. Regarding ground of appeal no. 1(a) of the miscellaneous application relating to para 6 of the ITAT order, the ld. CIT(A) has deleted the addition in respect of four parties on the reasoning that there was sufficient balance in the capital account of the four parties. On similar reason, the assessee stated that there was also sufficient capital balance in the case of five parties as mentioned at para 6 of the order of ITAT.
7. After considering the submission of the assessee, the ITAT has restored the issue to the assessing officer to grant relief to the assessee on the similar basis as the relief granted by the CIT(A) in respect of four parties after verification of the financial position of the five parties. After considering these facts, we do not find any merit on this issue as referred at para 2.1.3 in the miscellaneous application filed by the assessee since the ITAT has clearly analyzed the fact and issue and directed the assessing officer to allow the claim of the assessee after required verification. Therefore, we do not find any mistake apparent from record on this 7 MA No. 106/Mum/2024 Nehal Brothers issue, therefore, this part of the miscellaneous application filed by the assessee is dismissed.
8. Similarly, in respect of two parties as mentioned at para 7 of the order of ITAT that these were the related parties and having sufficient balance therefore after considering the submission of the assessee, the ITAT has rightly restored this issue in the case of two parties to the file of assessing officer for verification of the fact that how these two were the related parties of the assessee therefore, we do not find any mistake apparent from record as there is clear cut finding as referred above. Therefore, this part of the miscellaneous application is dismissed.
9. In respect of para 2.1(c) of the miscellaneous application the assessee submitted that the ITAT has not considered the voluminous details evidences and material on record in respect of five lenders mentioned at para 8 of the ITAT orders stating that the counsel for the assessee has not been able to make out a case either for deleting the addition or for re-verification. The last part of the miscellaneous application pertaining to the decision of ITAT reported at para 8 of the ITAT order which is reproduced as under:
"In so far as the remaining five lenders (i.e. other than the one mentioned in paras 6 & 7 above), the ld. Counsel for the assessee has not been able to make out a case either for deleting the addition or for re-verification. Hence, addition in respect of said lenders is confirmed."
10. We find that the assessee has filed paper book comprising 1 to 344 before the lower authority and before the ITAT comprising confirmation of lenders financial position of lenders copies of bank statement etc. However, such detail has not been referred 8 MA No. 106/Mum/2024 Nehal Brothers anywhere at para 8 of the ITAT order wherein it is held that assessee has not been able to make out a case either for deleting the addition or for re-verification. Before us, the ld. Counsel referred the decision of the ITAT in the case of Ganita Technologies & Services Pvt. Ltd. vs DCIT 3(1)(1), Mumbai vide M.A. No. 439/Mum/2022 dated 09.11.2023 wherein miscellaneous application filed was allowed after following the decision of Hon'ble Madras High Court in the case of CIT vs Shree Ganesh Ventures (124 taxmann.com 99 (2021) on the issue of material on record which was lost sight of the Tribunal. Accordingly, we recall the order of the ITAT vide ITA No. 2541/M/2023 dated 25.01.2024 to the limited extent of deciding the issue in case of the five lenders as mentioned in para 8 of the order after considering the detail filed by the assessee in the paper book placed before the ITAT as discussed. Accordingly, the miscellaneous application filed by the assessee is partly allowed for statistical purpose in respect of para 2.1(c) of the miscellaneous application pertaining to para 8 of the ITAT order subject to the terms as discussed above.
11. In the result, miscellaneous application filed by the assessee is partly allowed for statistical purpose.
Order pronounced in the open court on 25.11.2024.
Sd/- Sd/-
(RAHUL CHADHARY) (AMARJIT SINGH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Dated: 25.11.2024
Biswajit, Sr. P.S.
9
MA No. 106/Mum/2024
Nehal Brothers
Copy to:
1. The Appellant:
2. The Respondent:
3. The CIT,
4. The DR
//True Copy// [
By Order
Assistant Registrar
ITAT, Mumbai Benches, Mumbai