Vinay Kumar Kedia., Kolkata V. A.C.I.T. CC-XX, Kolkata, Kolkata

ITA 1032/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92005 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 1997-1998
• Appeal Filed On: 02-05-2013
• Court: TRIBUNAL
• Department Lawyers: SANJAY SR DR
• Assessee Lawyers: S JHAJHARIA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA [BEFORE HON BLE SHRI B.P.JAIN, AM] I.T.A NO.1032 /KOL/2013 ASSESSMENT YEAR: 1997 - 1998 VINAY KUMAR KEDIA V S A.C.I.T., CENTRAL CIRCLE - XX , KOLKATA . KOLKATA (APPELLANT) ( RESPONDENT) (PAN: AFLPK 4137 J) FOR THE APPELLANT : SHRI S.JHAJHARIA FOR THE RESPONDENT : SHRI SANJAY, SR.DR, ADDL. C.I.T. DATE OF HEARING : 03 .06 .2015. DATE OF PRONOUNCEMENT: 03 .06 .2015. ORDER PER SHRI B.P.JAIN, AM : THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD.CIT(A) - CENTRAL - III , KOLKATA DATED 16.01.2013 FOR ASSESSMENT YEAR 1997 - 98. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAD GROSSLY ERRED IN DECIDING THE APPEAL, EX - PARTE, WITHOUT PROVIDING THE APPELLANT PROPER AND ADEQUATE OPPORTUNITY TO REPRESENT THE CASE AND THUS HAD ACTED AGAINST THE PRINCIPLES OF NATURAL JUSTICE; 2. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAD GROSSLY ERRED IN CONFIRMING THE ACTION OF THE AO IN TREATING THE INTEREST INCOME ON LOAN INVESTMENT UNDER THE HEAD OTHER SOURCE INSTEAD THAT OF BUSINESS AS CLAIMED BY THE APPELLANT; 3. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAD GROSSLY ERRED IN CONFIRMING THE ACTION OF THE AO IN ADDING A SUM OF RS. 7 LAKHS TO THE INCOME OF THE APPELLANT, BEING LOAN TAKEN BY THE APPELLANT FROM A PARTY, BY WRONGLY AND ILLEGALLY, TREAT ING THE SAME AS UNEXPLAINED CASH CREDI T; 4. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAD GROSSLY ERRED IN DISMISSING THE GROUND OF THE APPELLANT, IN RESPECT OF WRONG AND ILLEGAL LEVY OF INTERESTS UNDER SECTIONS 234A AND 234B; 5. FOR THAT YOUR PETITIONER CRAVES THE RIGH T TO PUT ADDITIONAL GROUNDS AND/OR TO ALTER/AMEND/MODIFY THE PRESENT GROUNDS BEFORE OR AT THE TIME OF HEARING . 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM AO S ORDER AT PAGES 1 AND 2 ARE REPRODUCED HEREIN BELOW FOR THE SAKE OF CONVENIENCE : ITA NO. 1032/KOL/2013 VINAY KUMAR KEDIA A.YR. 199 7 - 1998 2 THE A. R AND ACCOUNTED OF THE ASSESSEE SRI H.K.SING APPEARED AND SUBMITTED THE REQUIRED DETAILS. THE CASE WAS DULY HEARD. IN RESPECT OF LOAN CREDITOR, A COPY OF LOAN CONFIRMATION HAS BEEN SUBMITTED AND ALSO STATED THAT ITS NAME HAS BEEN CHANGED AND GIVEN A NEW NA ME AND ADDRESS OF THE LOAN CREDITOR AS INSPIRATION TVC COMPOUND P.LTD, G - 82, KIRTI NAGAR, NEW DELHI. A COMMISSION HAS BEEN ISSUED TO THE ADIT, UNIT - 2(2), NEW DELHI, TO CERTIFY THE CLAIM OF THE ASSESSEE. AS PER THE REPORT OF THE ADIT, IT WAS FOUND THAT NO S UCH COMPANY EXISTS. A COMPANY NAMED INSPIRATION PVC COMPOUNDS (PVT. ) LTD WAS FOUND ON A DIFFERENT ADDRESS, BUT IT DENIED HAVING ANY SUCH TRANSACTIONS WITH THE ASSESSEE. THIS COMPANY ALSO PROVIDED A COPY OF AUDITED P&L A/C & BALANCE SHEET FOR THE F.Y 1998 - 99 IN WHICH NO SUCH LOAN IS APPEARING. FURTHER VERIFICATION THROUGH INSPECTOR WAS CONDUCTED BY THE ADIT, UNIT - 2(2), NEW DELHI, ON THE ADDRESSES GIVEN BY THE AR OF THE ASSESSEE. THE FINDINGS OF THE ADIT HAS BEEN REPRODUCED BELOW: 1. T HE PREMISES NO.G - 82, KIRTI NAGAR, NEW DELHI IS A SHOPPING COMPLEX AND THERE WERE SOME SHOPS IN THE NAME OF M/S.PARVEEN POLYMERS, M/S RAJAN ASSOCIATES, M/S SHIVAM TRADERS AND A NOKIA SHOWROOM. FROM LOCAL ENQUIRY, NO COMPANY IN THE NAME OF INSPIRATI ON TVC CO MPOUND PVT. LTD. OR M/S. HARMILAPI CHEMICALS PVT. LTD. COULD BE TRACED AT THE GIVEN ADDRESS. WHEN ASKED FROM THE OLD SHOPKEEPERS, THEY SAID THAT NO SUCH COMPANIES EXISTED AT THE GIVEN ADDRESS FOR THE LAST 25 YEARS AND THEY NEVER HEARD ABOUT THESE COMPANIES . 2. THE INSPECTOR VISITED THE PREMISES BEARING NO.S - 278, GREATER KAILASH, PART - I, NEW DELHI, WHERE SRI BACHAN SINGH AGED 78 YEARS WAS PRESENT, WHO SAID THAT HE IS THE OWNER OF THIS PROPERTY AND RESIDING THERE SINCE 1969 - 70. HE TOLD THAT THIS WAS HIS R ESIDENCE AND NO SUCH COMPANY NAMELY HARMILAPI CHEMICALS PVT. LTD. HAS EVER OPERATED FROM THIS ADDRESS SINCE 1969 - 70. FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE HAS JUST INVENTED A NEW METHOD OF INTRODUCING THE UNDISCLOSED CASH IN THE FORM OF INT EREST FREE LOAN, BY OPENING A NEW COMPANY, PASSING ENTRY IN THE FORM OF INTEREST FREE LOAN, FORGET EVERYTHING. THE ASSESSEE HAS ALSO BEEN ASKED TO PRODUCE THE DIRECTOR OF THE COMPANY ALONG WITH THE COPY OF CURRENT RETURN AND RETURN OF INCOME FOR THE F.Y. 1 996 - 97, BUT NOT COMPLIED. THEREFORE, CONSIDERING THE ABOVE FACTS, THE ONLY VIEW CAN BE TAKEN AS TO TREAT THE LOAN AS UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSE E . THE LD. CIT(A) CONFIRMED THE ACTION OF AO. 4. THE LD. COUNSEL FOR THE ASSESSEE MR.S .JHAJHARIA ARGUED THAT THE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD AND THEREFORE THE LD. CIT(A) UPHELD THE ORDER OF THE AO ALLEGING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL. ACCORDINGLY THE ASSESSEE MAY BE GIVEN AN OPPORTUN ITY TO PRESENT THE CASE BEFORE LD. CIT(A) IN THE INTEREST OF JUSTICE. 5. THE LD. DR, ON THE OTHER HAND, ARGUED THAT THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD AND THE LD. CIT(A) HAS DECIDED THE APPEAL ON MERITS AND THEREFORE P RAYED TO CONFIRM THE ACTION OF THE AO. ITA NO. 1032/KOL/2013 VINAY KUMAR KEDIA A.YR. 199 7 - 1998 3 6. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE FACTS OF THE CASE. I FIND THAT ASSESSEE HAS NOT BEEN GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD AND THEREFORE IN THE INTEREST OF JUSTICE I SET ASIDE THE MATTER TO TH E FILE OF LD. CIT(A), WHO WILL DECIDE THE ISSUE DENOVO BUT BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS GROUNDS OF APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDE R PRONOUNCED IN THE OPEN COURT ON 0 3 .06 .2015. SD/ - [ B.P.JAIN ] ACCOUNTANT MEMBER DATE: 03 .06 .2015. R.G.(.P.S.) C OPY OF THE ORDER FORWARDED TO: 1 . VINAY KUMAR KEDIA, C/O SALARPURIA JAJODIA & CO., 7, CR AVENUE, KOLKATA - 700072. 2 A.C. I.T., CENTRAL CIRCLE - XX , KOLKATA. 3 . CIT(A) - CENTRAL - III , KOLKATA 4. CIT - KOLKATA. 5. CIT - DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES