CHAMPALAL S. SHAH,MUMBAI vs. ITO 16(2)(3), MUMBAI

सुनवाई की तारीख /Date of Hearing : 4.7.2017 घोषणा की तारीख /Date of Pronouncement : 3.10.2017 आदेश / O R D E R PER RAJESH KUMAR, A. M: These appeals are directed against the order of ld.CIT(A), Mumbai, passed on 5.12.2013 and 24.12.2013 for the assessment years 2007-08 and 2008-09 respectively. Since, the appeals pertain to the same assessee, for the sake of convenience, these appeals were clubbed together, heard together and are being dispose off by this common order.

2 and 115 1 / Mum /201 4 2. Grounds of appeal taken by the assessee in both the appeals are common except the figures. Therefore, for the sake of convenience we reproduce grounds of appeal taken in assessment year 2007-08 as under : “I. The learned Commissioner of Income Tax (Appeals) [hereinafter referred as the CIT (A) ] erred in confirming the addition being the difference closing stock of Rs.59,14,000/- as unexplained investment of the assess under section 69 of the Income Tax Act, 1961 [hereinafter referred to the "Act"] II. The learned CIT (A) ] erred in confirming the addition of Rs. 1,95,69,395/- unverifiable creditors as unexplained cash credits of the assessee, un section 68 of the Act. Ill. The learned CIT(A)]erred in confirming the addition of Rs.11,00,000/- treating the unsecured loans as unexplained cash credits of the assess under section 68 of the Act. “

no.1 is against the addition of Rs.59,14,000/- as unexplained investment and the issue raised in grounds of appeal no.2 is against the confirmation of Rs.1,95,69,395/- on account of unverifiable creditors and the issue raised in grounds no.3 is in respect of addition of Rs.11,00,000/- treating the same as unsecured loans as unexplained cash credit.

4. At the outset, the ld.AR draw our attention to the application dated 3.7.2017 for filing the additional grounds of appeal which reads as under : “1. Without prejudice to original grounds raised, on the facts and circumstances of the case; the learned CIT(A) ought to have estimated only reasonable percentage of commission on sales having treated the appellant as a “suspicious dealer” engaged in issuing bills without any 3 and 115 1 / Mum /201 4 delivery of goods coupled with the facts that books of accounts were not produced, instead of making separate additions on various issues.”

5. We have carefully considered the submissions of rival parties and perused the orders of lower authorities. We have also gone through the additional ground raised by the assessee. The assessee has issue raised in the additional ground of appeal that the reasonable percentages of commission on sales should be applied as the assessee is a suspicious hawala dealer engaged in issuing bills without actually delivery of goods in physical forms. To corroborate the averment the ld.AR placed before us a copy of Sales Tax Order which states that the assessee to be hawala dealer. After perusing the records and the orders of the authorities below, we find that the issue has never been taken up before the lower authorities. In the present facts and circumstances of the case and after examination of order of Sales Tax Department furnished by the assessee during the course of hearing, wherein it has been mentioned that M/s Mahima Incorporation registered under CST Act, 1956 bearing Number TIN 27970531217C has been cancelled abinitio w.e.f.8.5.2006.Under these facts denovo and circumstances, we feel that the ends of justice would be met, if the matter is restored back to the file of the AO for examination all these facts and then decide the case of the assessee denovo as per the facts and law. Accordingly, we admit the additional ground raised by the assessee and restore the matter to the file of the AO to frame the assessment after considering the facts and