Income Tax Appellate Tribunal - Mumbai
Silver Oak Infrastructure & ... vs Asst Cit 20(3), Mumbai on 13 December, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL " E" BENCH, MUMBAI
BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM
ITA No. 5345/Mum/2014
(A.Y. 2009-10)
The Asst. Commissioner of Silver Oak Infrastructure &
Income Tax- Circle 20(3), Developers
Mumbai, 506, Piramal Vs. 1004, Gods Gift Tower, Yari
Chambers, Lalbaug, Road, Andheri(W ),
Mumbai-400 012 Mumbai-400 061
Appellant .. Respondent
CO No. 263/Mum/2017
(Arising in ITA No. 5345/Mum/2014 for A.Y. 2009 -10)
ITA No. 5488/Mum/2014
(A.Y. 2009 -10)
Silver Oak Infrastructure & The Asst. Commissioner of
Developers Income Tax- Circle 20(3),
1004, Gods Gift Tower, Yari Vs. Mumbai, 506, Piramal
Road, Andheri(W ), Chambers, Lalbaug,
Mumbai-400 061 Mumbai-400 012
Appellant .. Respondent
PAN No. ABHFS5271R
Revenue by : V Justin , DR
Assessee by : Sudhakar Kation
Date of hearing: 13-12-2017 Date of pronouncement : 13-12-2017
2
ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4,
CO No. 26 3 / Mu m/ 2 01 7
ORDER
PER MAHAVIR SINGH, JM:
These cross appeals and Cross Objection of the assessee are arising out of the common order of Commissioner of Income Tax (Appeals)-31, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-31/IT- 390/ACIT-20(3)/11-12 dated 30-06-2014. The Assessment was framed by the Asst. Commissioner of Income Tax, Circle 20(3), Mumbai (in short ACIT) for the assessment year 2009-10 vide order dated 28-12-2011 under section 143(3) of the Income Tax Act, 1961(hereinafter 'the Act').
2. The only issue in this appeal of Revenue in ITA No. 5343/Mum/2014 is as regards to the order of CIT(A) deleing the addition made by AO of expenditure on earth filling. For this Revenue has raised following ground No. 1: -
"1. The Ld. CIT (A) has erred on the facts and circumstances of the case and in law in deleting the addition of Rs 3875908/- in respect of Earth Filling Expenditure(ad-hoc) by not appreciating the facts pointed out by the AO"
3. Brief facts are that the AO while going through the vouchers produce by assessee for the expenses of earth filling disallowed 20% of expenses on adhoc basis by observing in Para 5.3.7 as under: -
"9. Apart from this on the basis of vouchers produced for Earth filing expenditure. the quality of those documents are up to the mark. Considering the income earned in this activity, the 20'% of Rs.1,93,79,540 is hereby disallowed and added back the same to the total income of the assessee.3
ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4, CO No. 26 3 / Mu m/ 2 01 7 Therefore, the disallowance comes to Rs.38,75908/- (i.e. 20 of Rs. 1,93,79,540/-."
Aggrieved, Assessee preferred the appeal before CIT(A), who deleted the addition by observing in Para 5.3.7 as under:-
"5.3.7 In this regard I find that there is no dispute that the closing balance s on 31/03/2009 in the books of both parties tallies at Rs. 2,36,74,8921/-. It is only in the case of opening balance as on 01/04/2008 that the figures vary, with the appellant's books showing opening balance of Rs.
2,19,83,194/- and the opening balance as per books of M/s NDR Warehousing at Rs. 5,62,97,140/-. The AO has not pointed out any discrepancies in other entries in the ledger accounts maintained by the two parties. With regard to the difference in opening balance, the same has its roots in the transactions between the two parties in earlier years and accordingly the discrepancy cannot be added back in the assessment year under consideration. As regards the observation of the A.O. that M/s NDR Warehousing Pvt. Ltd. has not shown income under the head 'earth-filling expenses,' it has been submitted that the said company adjusts for the material supplied in the amount credited to the appellant with reference to the running bill raised. From the accounts furnished, it is seen that the appellant has raised running hills totaling Rs. 1,81,60,354/- in the name of M/s NDR Warehousing Pvt. Ltd. and debited earth filing expenses of Rs.1,85,86,685/-. Payments the ledger accounts filed by the said company in response to the enquiry made by the A.O. during remand proceedings have 4 ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4, CO No. 26 3 / Mu m/ 2 01 7 been test-checked w.r.t. the entries in the bank statement and are found reflected therein. Thus, when the party in question has not denied transactions with the appellant, the entries of the accounts in book boths (save for the figure of opening 'balance) match and the payments 35 per the copy of accounts furnished by the appellant and the pay are found reflected in the bank statement, the expenses claimed cannot be held as bogus. Thus in view of these facts, the ad-hoc disallowance of Rs. 38,75,908/- cannot be sustained and is deleted. Accodir.gy, the ground raised by the appellant is allowed."
Aggrieved, now Revenue is in appeal before us.
4. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that the AO during the remand proceedings have test check the entries in the bank statement and found reflected therein. Hence, there is no question of adhoc disallowance. We find no infirmity in the order of CIT(A) deleing the adhoc disallowance of earth filling expenses made by AO of Rs. 38,75,908/-. We confirm the order of CIT(A) and this issue of Revenue's appeal is dismissed.
5. Coming to cross objection of the assessee in CO No. 263/Mum/2017, it is noticed that the assessee in this CO has raised following ground: -
"On the facts and in the circumstances of the case and in the law, and with our cross objection, the Ld.AO erred and not justified in his appeal before the honorable Tribunal, in rejecting the deletion made-'and allowing by the First Appellate in favour 5 ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4, CO No. 26 3 / Mu m/ 2 01 7 of cross-objector in respect of EARTH-FILLING expenses of Rs.38,75,908- (ad-hoc 20 % of Rs. 193,79,540/-) without properly pursuing and observing the appellate order wherein the first Appellate has completely cross verified with the documentary evidences availed from and with Ld.AO u/s 133(6) which the Ld. AO failed to understand the transactions effected therein during the Remand proceeding."
6. It seems that the co is supportive and for this the learned Counsel for the assessee also agreed. Since, the CO of the assessee is supportive of the order of CIT(A) deleing the addition of Earth Filling of expenses of Rs. 38,75,908/- and hence, the same is held to be infructuous and dismissed.
7. Coming to assessee' appeal in ITA No. 5488/Mum/2014, the first issue in this of assessee is as regards to the order of CIT(A) confirming the action of the AO in sustaining the addition of 2 Sundry Creditors of Rs. 3,11,412/-. For this assessee has raised following ground: -
"On the facts and in the circumstances of the case and in the law, the Id. CIT (A)-XXXI erred and not justified in dismissing the Ground of contention of the Appellant Firm that the Appellant has neither complied the SUSTANCE nor FORM w.r.t Section 133(6) of Income Tax Act. 1951. Although the Appellant has already discharged the ONUS to prove the geriuinity of the transaction on its part during the REMAND proceeding. (This is with reference to Two Sundry Creditors (others) Rs. 311412/-)."6
ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4, CO No. 26 3 / Mu m/ 2 01 7
8. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the assessment order that assessee has disclosed Sundry Creditors in the name of M/s Jugial Cement of Rs. 1,43,780/- and M/s KB Timber Supply company of Rs. 1,67,632/- totaling of Rs. 3,11,412/-. As the assessee failed to file confirmation before the AO, he added back the same to the returned income of the assessee. Aggrieved, assessee preferred the appeal before CIT(A). Before CIT(A) assessee filed additional evidences and CIT(A) asked for remand report from the AO, who vide the remand report dated 07-03-2014 has not considered the additional evidences. The assessee before CIT(A) filed confirmation from these parties, but none of the authorities below have considered the same. In view of these facts, we restore this issue back to the file of the AO, who will consider these trade creditors qua the additional evidences and will decide accordingly after allowing reasonable opportunity of being heard to the assessee. This issue of assessee's appeal is allowed for statistical purposes.
9. The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition of Sundry Creditors for earth Filling expenses of Rs. 19,99,816/-. For this assessee has raised following ground No.2: -
"2. On the facts and in the circumstances of the case and in the law, the Ld. CIT (A)-XXXI erred and not justified in dismissing the Ground of contention of the Appellant Firm that the Appellant has neither complied the SUSTANCE nor FORM w.r.t Section 133(6) of Income Tax Act. 1961. Although the Appellant has already discharged the ONUS to prove the genuinity of the transaction during the REMAND proceeding. (This is with reference to Sundry Creditors for Earth-Filling Expenses Rs.19,99,816/-,claimed in P&L A/c.)"7
ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4, CO No. 26 3 / Mu m/ 2 01 7
10. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the assessment order that there was difference in the bills raised on NDR and bills for Earth Filling by the assessee. The bill raised for earth filling was amounting to Rs. 1,93,99,540/-, whereas, assessee has debited expenses of Rs. 2,13,99,356/-. Thereby, there arose a difference of Rs. 19,94,816/-. The assessee could not co-relate this difference before AO or even before CIT(A). Before CIT(A) assessee filed an additional evidences in the shape of confirmation from the parties and bills and vouchers. As the assessee could not produce these parties, the AO in his remand report dated 07-03-2014 has not considered the evidences. The CIT(A) confirmed the addition.
11. We after going through the case records are of the view that these evidences should have considered by the AO and accordingly, decision should have been taken. In the entire facts and circumstances of the case and in the interest of natural justice, we set aside the orders of lower authorities on this issue and remand the matter back to the file of the AO for fresh adjudication after allowing reasonable opportunity of being heard to the assessee. This issue of Revenue's appeal is allowed for statistical purposes.
12. In the result, the appeal of Revenue and CO, both are dismissed and the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 13-12-2017.
Sd/- Sd/-
(RAJESH KUMAR) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 13-12-2017
Sudip Sarkar /Sr.PS
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ITA No . 5 3 45 & 5 4 88 / Mu m / 20 1 4,
CO No. 26 3 / Mu m/ 2 01 7
Copy of the Order forwarded to:
1. The Appellant
2. The Respondent.
3. The CIT (A), Mumbai.
4. CIT
5. DR, ITAT, Mumbai BY ORDER,
6. Guard file.
//True Copy//
Assistant Registrar
ITAT, MUMBAI