Raj Enterprises, Mumbai vs Assessee
- CitationI.T.A. No.1326/Mum/2013
Ratio decidendi
The rule this decision rests on
The assessee's sundry creditors balance of Rs.1.44 crores, having been treated as income on a determination not reached on the merits, is a matter the tribunal will not decide where the assessee was denied an effective opportunity to explain it: where the assessing officer never examined the assessee's explanation and the first appellate authority refused to admit the additional evidence, the tribunal sets aside the first appellate order and restores the issue to the assessing officer for fresh examination after affording a hearing, since affording one further opportunity does not prejudice the department and promotes the proper computation of total income.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
आयकर अपील य अ धकरण, मुंबई यायपीठ "डी " मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL" D" BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) सव ी बी.आर.बा करन, लेखा सद य एवं अ मत शु ला, या यक सद य के सम
आयकर अपील सं./I.T.A. No.1326/Mum/2013 ( नधारण वष / Assessment Year :2008-09)
M/s Raj Enterprises, बनाम/ Asstt.Commissioner of Income 12th Floor, Raheja Chambers, Vs. Tax- Range 11(1), 231, Nariman Point, Aayakar Bhavan, Mumbai-400021 M K Road, Mumbai-400020 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AAAFR3674F
अपीलाथ ओर से / Assessees by Shri Nitesh Joshi and Shri Manoj Dixit यथ क ओर से/Revenue by Shri Akhilendra P Yadav
सुनवाई क तार ख / Date of Hearing : 23.3.2015 घोषणा क तार ख /Date of Pronouncement : 08.4.2015
आदे श / O R D E R
PER B.R. BASKARAN (AM)
The assessee has filed this appeal challenging the order dated 06- 12-2012 passed by Ld CIT(A)-3, Mumbai and it relates to the assessment year 2008-09. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the assessment of sundry creditors balance of Rs.1.44 crores.
2. We heard the parties and perused the record. The assessee is engaged in the business of financing and distribution of cinematographic films. It is following cash system of accounting. However, the Balance sheet of the assessee disclosed Sundry creditors balance of Rs.1.44 crores. Hence, the AO took the view that the assessee cannot have sundry 2 I . T . A . N o . 1 3 2 6 / Mu m / 2 0 1 3
creditors balance under cash system of accounting and accordingly treated the same as income of the assessee. According to Ld A.R, the assessee filed a detailed letter explaining each of the creditors, but the AO did not consider the same. According to Ld A.R, the sundry creditors balance represent advances received by it and the nature of each of the creditor was explained in the letter filed before AO. Before Ld CIT(A), the assessee filed certain documents in the form of additional evidences, but the Ld CIT(A) declined to admit the same. Accordingly, the Ld CIT(A) confirmed the assessment of Rs.1.44 crores as income of the assessee.
3. Form the rival submissions; we notice that the assessee could not explain the nature of sundry creditors before the assessing officer. According to Ld A.R, the assessing officer did not consider the letter filed by the assessee. We have also noticed that the Ld CIT(A) has refused to admit additional evidences filed before him by the assessee. Thus, we notice that there was no occasion for tax authorities to examine the explanations furnished by the assessee. Before us, the ld A.R pleaded that the assessee should be given one more opportunity to explain the sundry creditors. We find merit in the said plea. In our view, affording one more opportunity to the assessee cannot cause damage to the department, but on the contrary the same would promote cause of justice. It is a settled proposition that the assessing officer should strive to compute correct total income. Hence, we are of the view that the assessee should be given one more opportunity. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to examine the same afresh and take appropriate decision in accordance with the law, after affording necessary opportunity of being heard to the assessee.
3 I . T . A . N o . 1 3 2 6 / Mu m / 2 0 1 3
4. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
The above order was pronounced in the open court on 8th Apr, 2015.
घोषणा खल ु े यायालय म दनांकः8th Apr, 2015 को क गई ।
Sd sd (अ मत शु ला / AMIT SHUKLA) (बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मुंबई Mumbai: 8th Apr,2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई/ DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, True copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
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