SOLVAY PHARMA INDIA LTD,MUMBAI vs. ADDL CIT RG 7(2), MUMBAI

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ITA 270/MUM/2011Status: DisposedITAT Mumbai14 October 2015AY 2006-074 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the books of accounts were not properly examined by the revenue authorities. Therefore, the matter was restored to the Assessing Officer for fresh verification of the books and documentary evidence.

What were the facts?

The assessee, an advocate, deposited Rs. 10,00,000/- in cash and received Rs. 5.63 lakhs as an advance for which no confirmation or foreign remittance certificate was provided. The Assessing Officer treated these amounts as unexplained income.

What were the issues?

Whether the cash deposits and advance received by the assessee were adequately explained and properly assessed under the relevant sections of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI N.K. BILLAIYA & SHRI SANJAY GARG

For Respondent: Shri K.L. Kanak
Hearing: 29.09.2015Pronounced: 07.10.2015

आदेश / O R D E R

PER N.K. BILLAIYA, AM:

1.

This appeal by the assessee is preferred against the order of the Ld. CIT(A)-2, Mumbai dated 4.12.2013 pertaining to Assessment year 2009-10.

2.

The grievance of the assessee is two-fold. The first grievance relates to the addition of Rs. 10,00,000/- u/s. 68 of the Act and the second grievance of the assessee relates to the addition of Rs. 5.63 lakhs u/s. 68 of the Act.

3.

The assessee is an advocate by profession. Return for the year was filed on 31.7.2009 declaring total income at Rs. 1,09,320/-. The return was selected for scrutiny assessment as per CASS details.

3.1. During the course of the scrutiny assessment proceedings, the assessee was asked to explain the source of total cash deposited amounting to Rs. 13.80 lakhs in ABN AMRO Bank, Mumbai. The assessee vide his letter dated 14.11.2011 submitted the list of persons from whom cash is received. The assessee was asked to give information for cash deposits with address of persons and supporting evidence and credit worthiness. On receiving no plausible reply, the Assessing Officer treated the cash deposit at Rs. 10,00,000/- as unexplained.

3.2. On further scrutiny, the AO noticed that the assessee has received Rs. 32,83,481/- as reimbursement of expenses from G.M.S. USA. The assessee furnished the relevant details from which the AO noticed that advance of Rs. 5.63 lakhs have been shown for which the assessee has neither filed any confirmation letter nor filed foreign inward remittance certificate indicating this amount as advance. The same was treated as undisclosed income u/s. 69C of the Act.

4.

Aggrieved by this, the assessee carried the matter before the Ld. CIT(A) biut without any success. However, in so far as the addition of Rs. 5.63 lakhs is concerned, the Ld. CIT(A) was of the opinion that the AO has wrongly invoked Sec. 69C and accordingly directed the AO to make this addition u/s. 68 of the Act.

5.

Aggrieved by this, the assessee is before us.

6.

The Ld. Counsel for the assessee vehemently submitted that the case of the assessee could not be defended properly during the course of the assessment proceedings. The Ld. Counsel further stated that the assessee has got every detail. In support of its claim, the Ld. Counsel drew our attention to the various documentary evidences furnished in the form of a paper book. It is the say of the Ld. Counsel that each and every deposit is explained in the books of account meticulously and regularly maintained by the assessee. The Ld. Counsel pleaded that the issue may be restored to the file of the AO for the verification of the documentary evidences and the books of account.

7.

The Ld. Departmental Representative strongly objected to this claim of the Counsel. It is the say of the Ld. DR that the documents were transmitted to the AO by the Ld. CIT(A) calling for remand report and after receiving the remand report, the Ld. CIT(A) himself has verified the details and confirmed the addition. Therefore, there is no reason for giving another opportunity to the assessee.

8.

We have given a thoughtful consideration to the rival submissions. We have also gone through carefully to the orders of the authorities below. In our considered opinion, prima facie it appears that the books of accounts have not been properly examined by the Revenue authorities. Therefore, in the interest of justice and fair play, we restore the entire issue to the file of the AO. The assessee is directed to produce without fail the books of accounts with all the relevant documentary evidences in support of his claim. The AO is directed to verify the same and decide the issue afresh as per the provisions of the law.

9.

In the result, the appeal filed by the assessee is treated as allowed for statistical purpose.

Order pronounced in the open court on 7th October, 2015

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