Anand Pankaj Kapadia , Secunderabad V. Asst. Commissioner of Income Tax, Circle-10(1), Hyderabad

ITA 1010/Hyd/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7548 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-08-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 17-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.S. ARVINDAKSHAN
• Keywords: Principle of natural justice; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 1010/HYD/2019 ASSESSMENT YEAR: 2015 - 16 SRI ANAND PANKAJ KAPADIA, SECUNDERABAD. PAN: ABZPK 0017 D VS. ACIT, CIRCLE - 10(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SRI R.S. ARVINDAKSHAN, DR DATE OF HEARING: 17/10/2019 DATE OF PRONOUNCEMENT: 17 /01/2020 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 6, HYDERABAD IN APPEAL NO. 10300/2017 - 18/A3/CIT(A) - 6, DATED 08/03/2019 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY 2015 - 16. 2. ASSESSEE HAS RAISED TWO GROUNDS IN ITS APPEAL AND THE CRUX OF THE ISSUE S ARE AS FOLLOWS: 2 (I) TH E LD. CIT (A) HAS ERRED IN REJECTING THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE UNDER SUB - RULE (1) OF RULE 46A OF THE IT RULES, 1962 . (II) THE LD. CIT (A) HAS ERRED IN SUO MOTTO CONCLUDING THAT THE INVESTMENT MADE IN ICICI PRUDENTIAL MUTUAL FUND IS NEITHER ROUTED THROUGH BOOKS OF ACCOUNTS NOR REFLECTED IN THE BALANCE SHEET AS ON 31/3/2015 WITHOUT PROVIDING AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SAME WHICH IS AGAINST PRINCI PLES OF NATURAL JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABRICATION OF ALUMINIUM AND TRADING IN ALUMINIUM PRODUCTS UNDER THE NAME AND STYLE OF M/S. ARCHITECTURAL ALUMINIUM SYSTEMS FILED ITS RETURN OF INC OME FOR THE AY 2015 - 16 ON 26/09/2015 ADMITTING TOTAL INCOME OF RS. 79,35,970/ - . THEREAFTER, THE CASE WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS AND ASSESSMENT WAS COMPLETED ON 29/12/2017 WHEREIN THE LD. AO MADE ADDITION OF RS. 50 LAKHS BECAUSE THERE WAS A DIFFERENCE IN THE UNSECURED LOAN STANDING IN THE NAME OF SRI D. RAJESH REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE AND THE CONFIRMATION STATEMENT SUBMITTED BY THE UNSECURED LOAN CREDITOR SRI D . RAJESH (LOAN REFLECTED IN THE NAME OF D. RAJESH RS. 3 81,50 ,000/ - AND THE CONFIRMATION STATEMENT RECEIVED FROM SRI D. RAJESH WAS RS. 31,50,000/ - ). 4. ON APPEAL, THE ASSESSEE HAD EXPLAINED BEFORE THE LD CIT (A) THAT THE LOAN AMOUNT OF RS. 81,50,000 WAS RECEIVED FROM M/S. 14 REELS ENTERTAINMENT AND SRI DANDU RAJESH. IT WAS FURTHER EXPLAINED THAT SEPARATE CONFIRMATION OF THE OUTSTANDING LOAN AMOUNT WAS OBTAINED FROM M/S. 14 REELS ENTERTAINMENT FOR RS. 50 LAKHS AND FROM D. RAJESH FOR RS. 31,50,000/ - . IT WAS FURTHER SUBMITTED THAT THE LD. AO HAD VERIFI ED ONLY THE CONFIRMATION LETTER RECEIVED FROM D. RAJESH FOR RS. 31,50,000/ - AND WITHOUT VERIFYING THE CONFIRMATION STATEMENT RECEIVED FROM M/S. 14 REELS ENTERTAINMENT THE LD. AO HAD ARRIVED AT AN ERRONEOUS CONCLUSION. IT WAS ALSO SUBMITTED THAT T HE ASSESS EE HAD ALSO FURNISHED DETAILS OF THE LOAN AMOUNT OF RS. 50 LAKHS RECEIVED FROM M/S. 14 REELS ENTERTAINMENT BY WAY OF RTGS FROM AXIS BANK ON 11/9/2014. HOWEVER, THE LD. CIT (A) REJECTED THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE AND BY SUO MOTTO VER IFYING THE DETAILS OF THE PAYMENT RECEIVED FROM AXIS BANK UPHELD THE ORDER OF THE LD. AO. 5. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT THE ASSESSEE HAD PRODUCED THE REQUIRED EVIDENCE TO ESTABLISH THE GENUINENESS OF THE LOAN RECEIVED FOR RS. 81,5 0,000/ - BEFORE THE LD. CIT (A) BUT THE LD. CIT 4 (A) REJECTED TO ADMIT THE SAME AND BY MAKING SUO MOTTO ENQUIRY UPHELD THE ORDER OF LD. AO WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO T HE FILE OF THE LD. AO FOR FRESH CONSIDERATION SO THAT THE ASSESSEE WILL BE PROVIDED WITH ONE MORE OPPORTUNITY TO ESTABLISH THE GENUINENESS OF HIS CLAIM BY PRODUCING COGENT EVIDENCE. THE LD. DR ON THE OTHER HAND VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS O F THE LD. REVENUE AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT APPEARS THAT THE LD. CIT (A) HAS FAILED TO ADHERE TO THE PRINCIPLES OF NATURAL JUSTICE. WHEN THE ASSESSEE H AS PRODUCED CERTAIN EVIDENCE TO ESTABLISH THE GENUINENESS OF HIS CLAIM FOR HAVING RECEIVED LOAN FROM CERTAIN ENTITIES FOR THE FIRST TIME, IT WOULD HAVE BEEN APPROPRIATE ON THE PART OF THE LD. CIT (A) TO OBTAIN A REMAND REPORT FROM THE LD. AO AND THEREAFTER PROCEED TO ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW AND MERIT. HOWEVER, IT APPEARS THAT THE LD. CIT (A) HAS NOT ONLY REJECTED THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE BUT ALSO MADE SUO MOTTO ENQUIRIES WITHOUT PROVIDING AN OPPORTUNITY TO THE AS SESSEE TO REBUT HIS FINDINGS WHICH IS GROSSLY IN VIOLATION TO THE PRINCIPLES OF NATURAL JUSTICE. THEREFORE, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO FOR DE - NOVO CONSIDERATION WITH LIBERTY TO THE ASSESSEE TO PRODUCE ANY 5 EVIDENCE BEFORE THE REVENUE WHICH HE DEEMS APPROPRIATE TO ESTABLISH THE GENUINENESS OF HIS CLAIM. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2020. SD/ - SD/ - ( V. DURGA RAO ) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 17 TH JANUARY, 2020. OKK COPY TO: - 1) SRI ANAND PANKAJ KAPADIA, PROPRIETOR, ARCHITECTURAL ALUMINIUM SYSTEMS, 18 - 31 TO 42, 5 TH FLOOR, BAPUBAGH COLONY, PG ROAD, SECUNDERABAD. 2) ACIT, CIRCLE - 10(1), HYDERABAD. 3) CIT (A), 6 TH FLOOR, INCOME TAX TOWERS, AC GUARDS, HYDERABAD. 4) PR. CIT - 6, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE