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2017 (3) TMI 435 - ITAT MUMBAI

2017 (3) TMI 435 - ITAT MUMBAI - TMI - Determination of total income - addition to ncome in hands of assessee - Held that:- As assessee was real owner of the business carried on in the name of M/s Industrial Agencies, Nagpur and Shri S.J. Baid was only nominal owner of the business. It was held that actual business was controlled by the assessee and Shri S.J. Baid was only signing the papers as per directions of the assessee. Under these circumstances the substantive addition has been rightly ma .....

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have been filed by the Assessee against order of Commissioner of Income Tax (Appeals), Mumbai-21 [in short CIT(A)], involving common issues, therefore, these appeals are being disposed of by this common order. 2. First, we shall take up appeal for A.Y. 1977-78, in I.T.A. No 4244/M/12 filed on the following grounds:- The Ld. Commissioner of Income Tax (Appeals)-23 (herein referred to as CIT(A) has erred in law, facts and evidence brought on record and in not accepting the explanation of the appel .....

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CIT(A) has erred in not considering the Dossier Report of the Department wherein the remarks prove that Tribunal order arose out of protective assessment of Mr. S.J.Baid was passed, however recovery could not be made. The CIT(A) has erred in passing the order with the assumption that there would not be a possibility of confirming the substantive addition in the case of Shri S.J. Baid unless further investigation would have been carried out on the appellant on whom the substantive addition has b .....

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tries that hearing was adjourned at the request of the counsel of the assessee but there has been no appearance on behalf of the assessee at more than four occasions. Under these circumstances, we have no option but to decide this appeal exparte qua the assessee. 4. During the course of hearing, it was submitted by the Ld.DR on behalf of the revenue that this is second round of proceedings. In the first round, this matter was remitted back by the ITAT to the Assessing Officer vide order dated 5. .....

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following observations:- We have heard the Ld. D.R. and have considered the facts. The Ld. D.R. and also the Ld. Counsel for the assessee have expressed their inability to produce before us a copy of the Tribunal order in the case of Shri S.J. Baid on the plea that the matter being very old, it is difficult to trace the record. We feel that there is no point in keepings these old appeals pending any more. In our view, the order of the Tribunal in the case of Shri S.J. Baid who is shown to be the .....

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assessing officer. The assessing officer is directed to bring on record the ITAT s order in the case of Shri S.J. Baid. If the additions made in the case of the assessee have been confirmed and finally brought to charge to tax in the case of Shri S.J. Baid by virtue of the ITAT order, there would be no justification whatsoever for making any addition of the same income in the case of assessee which would amount to a double addition and therefore, the additions made in the present case shall stan .....

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be reconsidered in the light of the observations made by us as above . 6. In the second round proceedings, the AO gave adequate opportunity of hearing to the assessee to provide all the documents and after considering the same,the A.O. confirmed the addition by making detailed discussion in the assessment order. The submissions of the assessee were not found acceptable by the A.O. since the assessee did not submit copy of ITAT order in the case of Shri S.J. Baid. The reasoning given by the A.O. .....

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ement of Shri S.J. Baid the assessee has merely stated that it should not be relied upon. The assessee has not given any cogent reason for rejecting the statement of Shri S.J. Baid. In view of the above stated facts, total income of the assessee is total income as per order . u/s 143(3) r.w.s 148 dated 24-3-1986. Rs.72,79,480 Total Income Rs.72,79,480 7. In appeal before Ld. CIT(A), all the submissions made by the assessee were considered, but these were not found acceptable. Thus, addition made .....

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that the order has been passed by the Tribunal in the case of Shri S.J. Baid. Also, it is evidently clear in the order passed u/s 143(3) r.w.s. 148 in the case of assessee dated 24/03/1986 wherein in para 5 of the order it is clear that protective assessment proceeding was initiated against Shri S.J. Baid. The finality of which has been achieved as per the Dossier Report. As stated by A.O. in his order that assessee has not submitted copy of the ITAT order is totally incorrect since assessee co .....

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The addition made by the A.O. is incorrect since the assessee was not a proprietor of M/s Industrial agency (1975), Nagpur. Also the order u/s 143(3) r.w.s 254 was passed by the A.O based on the recorded statement of Shri S.J. Baid without bringing any evidence to prove that no order of the Tribunal in the case of S.J. Baid was passed. Assessing Officer had also asked for the order of S.J. Baid from the assessee for which the assessee has clearly stated that he was not in a possession of the sam .....

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ced, and that the comments recorded by the then A.O. were vague and meaningless. Thereupon letters were issued by this office to the Registrar of ITAT at Mumbai as also at Nagpur, with a copy to the appellant, stating that: In appeal filed against the said assessment order (which is pending before the undersigned) the appellant submitted, inter alia, that the assessment order has been passed without bringing any evidence to prove that no order of the Tribunal in the case of Shri S.J. Baid was pa .....

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30 years old, in all likelihood, the records of the department would have been weeded out in accordance with the extant instructions on weeding out of old records. The ITAT was therefore requested that the records/archives of the ITAT may kindly be searched to confirm whether or not order in the case of Shri S.J. Baid, proprietor of M/s Industrial Agencies, Nagpur, has been passed by the ITAT, Mumbai in respect of A.Y.s 1975-76 ,76-77 & 77-78. A copy of the ITAT order if passed in such case .....

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able and the appeal shall be decided on the basis of materials available on record. No reply was received either form ITAT Mumbai or ITAT Nagpur till 09/03/2012 (or in fact even till date of this order). Accordingly, letter dated 09/03/2012 was issued to the appellant enclosing copies of the A.O. interim and final reports and letter of Addl. CIT Range 12(2), Mumbai. The appellant was also informed about the correspondence to ITAT Mumbai and ITAT Nagpur enclosing copies of the correspondence and .....

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earlier date and materials on record. The A.O. order, submissions made for the appellant and materials on record have been considered. The basis of the additions is on account of income from business carried on in the name of M/s Industrial Agencies, Nagpur. Shri S.J. Baid was considered as the nominal owner of the business and the A.O. held that the actual business was controlled by Shri N.M.R Tara, the appellant Shri S.J. Baid was only signing the papers as directed by the appellant. Even the .....

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by virtue of the Tribunal s order. Accordingly, the ITAT has directed the A.O. to bring on record the ITAT s order in the case of Shri S.J. Baid. Neither the A.O. nor the appellant have been able to furnish copy of the Tribunal s Officer (if passed at all) in the case of Shri S.J. Baid. On approaching the ITAT Mumbai and ITAT Nagpur, no copy of the Tribunal s order was furnished. Thus such order, if passed at ala, has not been located. The ITAT has itself stated in its order that there is no poi .....

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J. Baid been taken up and been decided by the ITAT, the said addition would have(a) either been confirmed in the hands of Shri S.J. Baid or (b) the addition would have been deleted. Since the department had made addition in the hands of Shri Baid on protective basis, the confirmation by ITAT would be to hold the income in the name of Shri S.J. Baid on protective basis. In either of the two alternative outcomes, there would not be a possibility of confirming the substantive addition in the case o .....

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in the case of Shri S.J. Baid have achieved finality, this would in fact strengthen the A.O. case that the substantive addition has correctly been made in the case of Shri N.M.R. Tara. Thus, unless the ITAT order specifically held the addition in the hands of Shri S.J. Baid as a substantive addition, the decision of ITAT would have no material effect in the present appellant s case (in who s hands substantive addition has been made). In these circumstances, in view of the detailed discussions i .....

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