ITO 22(3)(2), NAVI MUMBAI vs. MAHESH M MANANI, NAVI MUMBAI

(Assessment Year:2010-11) ITO-22(3)-2, Mumbai Appellant Vs. Mahesh N. Manani Plot No.181, Flat No.201, Matru Ashish Building, Sector- 28, Vashi, Navi Mumbai-400705 Respondent PAN: AALPM5754G अपीलाथ� की ओर से /By Appellant : Shri Shivaji B. Ghode, D.R. ��यथ� क� ओर से/By Respondent : None सुनवाई क� तारीख/Date of Hearing : 01.08.2016 घोषणा क� तारीख/Date of Pronouncement : 04.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-33, Mumbai, dated 31.10.2013 for A.Y. 2010-11 on following ground:

“1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.90,00,563/- on account of sundry liabilities.”

A.Y. 10-11 [ITO vs. Mahesh N. Manani] Page 2

2.1 Same has been opposed before us on behalf of Revenue inter alia submitting that CIT(A) erred in deleting the addition of Rs.90,00,563/- on account of sundry liabilities. Accordingly, order of CIT(A) be set aside and that of Assessing Officer be restored.

2.2 On the other hand, none appeared on behalf of assessee. Therefore, we proceed to decide the case ex parte on the basis of submission of ld. Departmental Representative and material available on record.

2.3 After going through the submission of ld. Departmental Representative and perused the material on record, we find that as stated above Assessing Officer in course of assessment proceedings noticed sundry liabilities at Rs.90,00,563/-. He issued notice u/s.133(6) of the Act, which were not returned back, but there was no response received. Therefore, assessee was asked to produce the creditors with their relevant income tax records for verification. However, neither the creditor came before him nor assessee could do so, for which, ld. Authorized Representative has given elaborate reasoning in the appeal A.Y. 10-11 [ITO vs. Mahesh N. Manani] Page 3 proceedings. Thereafter, before CIT(A) in course of hearing of appeal, assessee filed confirmatory letters from all the 8 creditors which contained complete names, addresses and even income tax particulars (PAN) of the creditors. Thus, the matter regarding verification of sundry creditors along with copies of confirmations from sundry creditors was sent to Assessing Officer u/s.250(4) of the Act for examination with a direction to make enquiries/investigation as he thinks fit to ascertain the facts of the matter. However, in these proceedings Assessing Officer instead of making any enquiries independently once again asked ld. Authorized Representative to produce the creditors which admittedly he could not do for the very reasons as mentioned in the submissions filed. From the records, it was observed by CIT(A) that though in the letter calling for the remand report CIT(A) specifically directed the Assessing Officer to make an enquiry, investigation as was necessary and thereafter, submit a factual report. Assessing Officer did not do any enquiries at his end. On the other hand by filing confirmation letters from the creditors who were in the records of Income Tax Department has established from PANs mentioned on confirmation letters which have not been found incorrect. In case of two creditors, namely, Priya Construction and Hirji N Manani, return of income was also filed inter alia included income received from assessee. Considering the facts and circumstances, CIT(A) observed that assessee on his part has primarily discharged his onus cast upon him to establish the credits in his books whereas Assessing Officer except harping on the point that assessee has failed to produce them ITA No.389/Mum/14 A.Y. 10-11 [ITO vs. Mahesh N. Manani] Page 4 along with records has not brought any material to establish that the liabilities reflected were fictious. So, Assessing Officer was not justified in rejecting the claim of assessee mainly on the ground that assessee could not produce creditors. It is not in dispute that assessee has filed confirmation from creditors along with PAN number. This view is fortified by the decision of Hon’ble Apex Court in case of CIT vs. Orissa Corporation (P) Ltd. [159 ITR 78 (SC)]. In view of this, CIT(A) was justified in deleting the addition. Same needs no interference from our side. We uphold the same.

Pronounced in the open Court on this the 4th day of August, 2016.