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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Income Tax Officer Payal Gold P. Ltd Ward 4(3)(1) 201 Madhavram Bldg, 195/197, R. No. 648, 6th Floor, Aayakar Vs. Kalbadevi Rd Bhavan, M.K. Road Mumbai-400002 Mumbai-400020 PAN No.AAGCP0873M Appellant .. Respondent .. Shri Purushottam Kumar, DR Assessee by Revenue by .. Shri Vimal Punniya, AR .. Date of hearing 24-05-2017 Date of pronouncement .. 07-06-2017 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the Revenue is arising out of the order of CIT(A)-9, Mumbai, in appeal No. CIT(A)-9/Cir.4/151/2015-16 dated 23.12.2016. The Assessment was framed by ITO Ward 4(3)(1), Mumbai for the A.Y. 2012-13 vide order dated 23-03-2015 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The only issue in this appeal of Revenue is against the order of CIT(A) in deleting the un-explained cash credit of Rs. 34.02 lakhs as advances shown by the assessee by admitting additional evidences in contravention of rule 46A of the IT Rules, 1962 (hereinafter the ‘Rules’). For this Revenue has raised following two grounds: -
“1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in directing to AO to delete the addition under section 68 of the I.T. Act on account of unexplained cash credit amounting to Rs. 34,02,000/- as advances shown.
Payal Gold P. Ltd (A.Y:2012-13) 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in admitting the additional evidences in contravention of Rule 46A of the Act.”
At the outset, the learned Sr. DR stated the brief facts that the assessee has received a sum of Rs. 28.40 lakh on 27-01-2012 from one Shri sahabrao Deshmukh and another sum of Rs. 5.62 lakhs from Charak Society and the same was shown in the balance sheet as advances as on 31-03-2012. Before the AO, the assessee could not produce anything and even notice issued by the AO under section 133(6) of the Act returned un-served with the postal authority notes “non-known”. Accordingly, the addition of un-explained credit of Rs. 34.02 lakh was made. Aggrieved, assessee preferred the appeal before CIT(A), who after admitting the additional evidences in the shape of VAT returns, sales invoices, sale register, ledger account of parties and bank statements for the year ending march 2013 deleted the addition by observing in Para 5.3.1: -
“I have considered the facts of the case as well as stand of the AO and submission of the appellant. ON perusal of details I found that appellant had received Rs. 28,40,000/- on 27-01-2012 from Mr. Sahabrao Deshmukh & Rs. 5,62,000/- from Charak Society the above balance was shown in the advances as on 31- 03-2012. Appellant stated that the goods were actually sold to the customer and offered for tax in AY 2013-14 and VAT were also collected and deposited on the above sales. In support of the contention appellant submitted Sales Invoice, Sales Register for March 2013, Ledger Account of Parties, and Bank Statement. It is found that the above sum of Rs.34,02,000/- (Rs.28,40,000 + Rs.5,62,000) was already taken into sales for A.Y.2013-14. Proceeding for Assessment Year 2013-14 was also completed u/s Payal Gold P. Ltd (A.Y:2012-13) 143(3) (Assessment order kept on record) where the above sales were not reduced from the sales. When one receipt was already suffered tax, then same cannot be taxed twice. But, in present case the receipts were suffered for tax in A.Y. 2013-14 as sales consideration and taxing the same in A.Y.2012- 13 as unexplained cash credit u/s 68 will lead to taxing one receipts in two difference assessment year which is against the law of taxation.”
The learned Sr. DR stated that the CIT(A), further observed in Para 5.3.3 as under: -
“5.3.3 Thus, the same income cannot be taxed twice. But, in present case the receipts of Rs.34,02,000/- suffered tax twice i.e. In A.Y.2012-13 as unexplained cash credit & in A.Y. 2013-14 as sales consideration. Action of AO of taxing same receipts twice has ultra- virus. Further, it is not the case where the appellant received loans and advances for which appellant require proving the identity, genuineness and creditworthiness, it is an business transaction where appellant received money against jewellery, appellant sold the jewellery and offered the receipt as sales. After completion of transaction there is no condition that the appellant maintained relationship with the sellers. Addition cannot be made just because the parties were not appeared before him or notice was not served once the sales were accepted. Hence, the case of assessee is squarely covered by the above mention judicial decision. Respectfully following the above decision the AO is directed to delete the addition made u/s 68 on account of Payal Gold P. Ltd (A.Y:2012-13) "unexplained cash credit" amount Rs.34,02,000/-. Hence the Ground No. 1 is allowed.”
The learned CIT Dr argued that let this evidences be explained to the AO and in case these facts are examined and factually, the same is the position, the AO will allow the relief to the assessee on this proposition. The learned Counsel for the assessee fairly agreed.
After hearing both the sides and going through the facts of the case, I am of the view that let, the evidences produced before CIT(A), be produced before the AO and accordingly, he can decide on the issue. On principal, if these are advances and subsequent sale is proved, the addition need not be made but for the purpose of verification the matter is remanded back to the file of the AO. The appeal of Revenue is partly allowed for statistical purposes.
In the result, the appeal of Revenue is partly allowed for statistical purposes. Order pronounced in the open court on 07-06-2017.