ITO 17(2)(3), MUMBAI vs. MORPARIA & RANKA CONSTRUCTION CO, MUMBAI

assessee respectively against the order of the Learned Commissioner of Income Tax (Appeals)-51, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 19.01.2017 for the A.Y. 2006-07.

“1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in directing to delete the addition of Rs. 1,38,42,000/- on account of payment to the partners of the firm for repurchase of tenancy rights without appreciating the facts that- (i) During the course of assessment proceedings, the assessee could not submit any details in support of its claim, i.e., how the tenancy rights were acquired, any proof of payment of electricity/Municipal Taxes/Telephone bills/rent receipt/bill or any correspondence received on the tenanted address, proof of possession of the flats. The assessee failed to provide any documentary evidences, which could prove the ownership of the flats repurchased. (ii) The agreements entered into with the partner tenants were not registered with the Stamp Duty Authority, whereby the authenticity of the documents remained unproved. (iii) In the absence of pertinent documentary evidences, the genuineness and business expediency of the expenditure has not been established as mandated by the Hon'ble Apex Court in the decisions of CIT vs. Indian Molasses Co. (P.) Ltd., 78 ITR 474 and J.K.Cotton Mfrs. Ltd., 101 ITR 227." 2. "The appellant prays that the order of the A.O. should be restored and order of the Ld. CIT(A) should be set aside." 3. "The appellant craves leave to amend or alter any ground or add a new ground which may be necessary."

3 ITA.NO.2623/MUM/2017 (A.Y: 2006-07) C.O. NO. 3/MUM/2019 M/s Morparia & Ranka Construction Co. ground raised by the assessee before the Ld.CIT(A) in respect of reopening of assessment.

7. We observe that the Tribunal in the case of ITO v. M/s. Mohanraj Trading & Exchange Pvt. Ltd., (supra) on identical situation restored the matter to the file of the Ld.CIT(A) for adjudicating the ground which were challenged where the reopening of assessment itself challenged. In view of the above, we restore the cross objection of the assessee to the file of the Ld.CIT(A) for adjudication on ground raised on reopening of assessment. Since the outcome of the ground raised by the assessee challenging the reopening has bearing on the other grounds, the appeal of the Revenue is also restored to the file of the Ld.CIT(A) who shall decide in accordance with law after providing adequate opportunity of being heard to the assessee.