Smt. Kokilaben R.Ramani, Ahmedabad V. The Income tax Officer,Ward-11(3), Ahmedabad

ITA 1033/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1389 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: P B SHAH
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ././ ./ ITA NO. 1033/AHD/2013 & CO NO.152/AHD/2013 / // / ASSESSMENT YEAR : 2009-10 SMT. KOKILABEN R. RAMANI, 35-36, NIRANJAN SOCIETY, OPP. CHIRAG DIAMOND ESTATE, BAPUNAGAR, AHMEDABAD-380024 PAN : ABMPR 1338 M VS INCOME TAX OFFICER, WARD 11(3), AHMEDABAD / // / (APPELLANT) / // / (RESPONDENT) & CROSS-OBJECTOR ASSESSEE BY : SHRI P.B. SHAH, AR REVENUE BY : SHRI VILAS V. SHINDE, SR DR. / // / DATE OF HEARING : 03/06/2016 / // / DATE OF PRONOUNCEMENT: 06/06/2016 / // / O R D E R THIS APPEAL BY THE ASSESSEE AND THE CROSS-OBJECTION THEREOF FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME- TAX (APPEALS)-XVI, AHMEDABAD DATED 15.03.2013 FOR A SSESSMENT YEAR 2009- 10. 2. AFTER FILING ORIGINAL GROUNDS, THE ASSESSEE HAS FILED REVISED GROUNDS OF APPEAL. THE MAIN GROUNDS EMERGING THERE FROM ARE A S UNDER:- 3.1 THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FA CTS IN MAKING ADDITION OF RS.33,28,500/- TO THE RETURNED INCOME AS ALLEGED UNEXPLAINED CASH CREDITS EVEN THOUGH THE CREDITS IN THE BANK ACCOUNTS WERE C LEARLY EXPLAINED. THE ADDITION IS THEREFORE, BAD IN LAW LIABLE TO BE DELE TED; 3.2 THE ASSESSING OFFICER HAS ERRED IN LAW AND ON F ACTS IN MAKING ADDITION OF RS.32,769/- TO THE RETURNED INCOME AS ALLEGED IN TEREST INCOME FROM BANK EVEN THOUGH THE SAME IS NOT ACTUALLY EARNED BY THE APPELLANT. THE ADDITION IS THEREFORE, LIABLE TO BE DELETED. 2.1 OTHER GROUNDS ARE ARGUMENTATIVE IN NATURE. SMC-ITA NO. 1033/AHD/2013 & CO NO.152/AHD/2013 SMT KOKILABEN R. RAMANI VS.ITO AY : 2009-10 2 3. BY APPLICATION DATED 30.05.2016, THE ASSESSEE HA S FILED APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS AS UNDER:- 1. THAT THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN NOT ALLOWING CROSS EXAMINATION OF THE DEPOSITORS WHO DEPOSED BEF ORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSING PROCEEDINGS AND THEIR STATEMENTS AND OTHER DOCUMENTS ARE USED AGAINST THE APPELLANT. THE ASSESSING ORDER IS THEREFORE, BAD IN LAW, LIABLE TO BE SET AS IDE; 2. THAT THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN NOT ACCEPTING THE REQUEST OF THE APPELLANT FOR SUMMONIN G THE DEPOSITORS AND THE AGENT AS WELL FOR VERIFICATION OF THE TRANSACTI ONS. THE ORDER IS THEREFORE, BAD IN LAW LIABLE TO SET ASIDE. 3. THAT THE ASSESSING OFFICER HAS ERRED IN LAW AND ON F ACTS IN BRINING ON RECORD ONLY THOSE STATEMENTS AND EVIDENCES WHICH AR E FAVOURABLE FOR MAKING ADDITIONS AND REMAINING SILENT ON THOSE WHIC H ARE IN FAVOUR OF THE APPELLANT. THE ORDER IS THEREFORE, PREJUDICIAL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE SAME IS THUS, LI ABLE TO BE QUASHED. 3.1 APROPOS ADMISSION OF ADDITIONAL GROUNDS, THE LD . COUNSEL FOR THE ASSESSEE CONTENDS THAT THEY ARE PURELY LEGAL IN NAT URE, NO VERIFICATION OF FACTS IS REQUIRED; BESIDES, THEY GO TO THE ROOT OF THE ISSUE AND ARE NECESSARY FOR PROPER DISPOSAL OF THIS APPEAL. RELIANCE IS PL ACED ON HONBLE SUPREME COURT JUDGMENT IN THE CASE OF NATIONAL THERMAL POWE R CO. LTD VS. CIT, REPORTED IN (1998) 229 ITR 383 (SC). 3.2 THE LD. DEPARTMENTAL REPRESENTATIVE IS HEARD, W HO OPPOSED THE ADMISSION OF ADDITIONAL GROUNDS. 3.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS THE FACTS EMERGE, THE ASSESSEE BEFORE THE LD. CIT(A) MADE A PLEA TO THE EFFECT THAT OPPORTUNITY OF CROSS-EXAMIN ING THE WITNESS WAS NOT GIVEN AND NO EFFORTS WERE MADE TO TRACE OUT THE REA L CULPRIT SHRI HARDIK RAO. SINCE THE GROUNDS IN QUESTION ARE LEGAL IN NATURE A ND ARE NECESSARY FOR DISPOSAL OF THIS APPEAL; THEREFORE, THEY ARE ADMITT ED. SMC-ITA NO. 1033/AHD/2013 & CO NO.152/AHD/2013 SMT KOKILABEN R. RAMANI VS.ITO AY : 2009-10 3 4. THE BRIEF FACTS OF THE CASE, AS CONTENDED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, ARE TO THE EFFECT THAT THE ASSES SEE IS A LADY DERIVING INCOME FROM THE PARTNERSHIP FIRM AND WAS REGULARLY ASSESSE D TO TAX. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE W AS FOUND TO HAVE DEPOSITED VARIOUS AMOUNTS BY CHEQUE AND CASH IN UCO BANK HAVING ACCOUNT NOS.1035 AND 3585. EXPLANATION WAS ASKED I N THIS BEHALF. IN REPLY, THE ASSESSEE CONTENDED THAT THE TRANSACTIONS IN THE SAID BANK ACCOUNTS ARE NOT CARRIED OUT BY THE ASSESSEE AND THE DEPOSITS HA VE NOT BEEN MADE BY THE ASSESSEE. IN THIS REGARD, THE ASSESSEE SUBMITTED T HAT HER DAUGHTER MS. RINA DESIRED TO PURSUE HIGHER STUDIES IN AUSTRALIA AND I N THIS CONNECTION SHE CAME IN CONTACT WITH SHRI HARDIK RAO, DIRECTOR, STU DY OVERSEAS INDIA. HE ADVISED THAT FOR IMMIGRATION PURPOSE THE ASSESSEE N EED TO OPEN A BANK ACCOUNT AND CARRY OUT SOME TRANSACTIONS FOR THE VIS A PURPOSE. IN PURSUANCE THEREOF, BANK ACCOUNT WAS OPENED ON 08.01.2009 WITH UCO BANK WHICH WAS CLOSED ON 15.09.2009. SHRI HARDIK RAO OBTAINED SIG NATURES OF THE ASSESSEE ON BLANK CHEQUES ON THE ASSURANCE THAT HE WILL MANA GE THE SAID BANK ACCOUNT/TRANSACTIONS IN SUCH A MANNER THAT WILL HEL P THE ASSESSEE IN GETTING THE VISA FOR HER DAUGHTER. TO COMPLY WITH THE ASSU RANCE AND ADVICE GIVEN BY SHRI HARDIK RAO, SHE ACTED WHATEVER HE SAID. TH EREAFTER, SHRI HARDIK RAO STARTED SHOWING ATTITUDE OF NON-COOPERATION AND AVOIDED MEETING WITH THE ASSESSEE. ON COMING TO KNOW ALL THESE FACTS, T HE SAID BANK ACCOUNT WAS CLOSED DOWN BY THE ASSESSEE ON 15.09.2009. BETWEEN PERIOD OF THESE EIGHT MONTHS, SHRI HARDIK RAO OPERATED THE SAID BANK ACCO UNT TO HIS SWEET-WILL AND FOR THE PURPOSES BEST KNOWN TO HIM. SINCE THE ASSESSEE HAD NO CONNECTION WITH THE DEPOSITS, SHE WAS UNABLE TO GIV E ANY EXPLANATION. SHE NEITHER HAS THE CHEQUE BOOK NOR THE PAY-IN-SLIP BOO K; THEY ARE RETAINED BY THE SAID SHRI HARDIK RAO. THE ASSESSEE PROVIDED T HE ADDRESS OF SHRI HARDIK RAO TO THE ASSESSING OFFICER AND ACCORDING TO ASSES SING OFFICER SHRI HARDIK RAO WAS NOT TRACEABLE ON THE GIVEN ADDRESS. THE AS SESSING OFFICER ISSUED SUMMONS U/S 133(6) ON THE DEPOSITORS WHOSE NAME AND ADDRESS ARE GIVEN SMC-ITA NO. 1033/AHD/2013 & CO NO.152/AHD/2013 SMT KOKILABEN R. RAMANI VS.ITO AY : 2009-10 4 BY THE BANK; HOWEVER, NONE APPEARED, EXCEPT ONE SMT . NIRMALA VASANT GHADGKE, ALONGWITH HER HUSBAND, WHO DENIED HAVING D EPOSITED THE SAID MONEY. THE LD. ASSESSING OFFICER MADE THE IMPUGNED ADDITION U/S 68 OF THE ACT, WHICH WAS CONFIRMED IN APPEAL BY THE LD. C IT(A). 4.1 THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO VA RIOUS LETTERS FILED BEFORE THE LD. CIT(A) THAT THE ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER BEHIND THE BACK OF THE ASSESSEE WERE NOT PROPERLY DISCLOSE D TO HER, NO SERIOUS EFFORTS WERE MADE TO TRACE-OUT SHRI HARDIK RAO WHO WAS ENGAGED IN OPERATING AN IMMIGRATION RACKET BY MISUSING THE TRU ST OF GULLIBLE PARENTS WHO WANTED TO SEND THEIR WARDS FOR FOREIGN EDUCATIO N. NO OPPORTUNITY OF CROSS-EXAMINATION OF THE WITNESSES RELIED ON BY THE ASSESSING OFFICER WAS OFFERED. SIMILARLY, THE STATEMENTS OF THE PERSONS WHO GAVE STATEMENTS IN FAVOUR OF THE ASSESSEE WERE NOT CONSIDERED. THE LD . CIT(A), HOWEVER, CONFIRMED THE ADDITION. 4.2 THE SECOND GROUND REGARDING INTEREST IS CONSEQU ENTIAL IN NATURE AS THE INTEREST HAS NEVER BEEN EARNED FROM UCO BANK BY THE ASSESSEE. 4.3 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE PRINCIPLES OF NATURAL JUSTICE AS ELUCIDATED BY MAXIM AUDI ALTERAM PARTEM HAVE NOT BEEN FOLLOWED. THE ASSESSEE HAS NOT BEEN GIVEN A FAIR OP PORTUNITY OF BEING HEARD AND BY NOT CONSIDERING THE EVIDENCE ON RECORD IN SU PPORT OF THE ASSESSEE, BOTH THE AUTHORITIES BELOW HAVE MISCARRIED THEMSELV ES IN UPHOLDING THE ADDITIONS. SHRI HARDIK RAO IS A NOTORIOUS PERSON W HO HABITUALLY INDULGED IN SUCH TYPE OF ACTIVITIES AND THE ASSESSING OFFICE R HAS FAILED TO TRACE HIM OUT. THE ASSESSEE HAD DEPOSED ALL THESE FACTS ON A FFIDAVIT WHICH HAS NOT BEEN EFFECTIVELY CONFRONTED, IT IS NO WHERE MENTION ED AS TO WHAT STEPS WERE TAKEN TO FIND OUT SHRI HARDIK RAO. SMC-ITA NO. 1033/AHD/2013 & CO NO.152/AHD/2013 SMT KOKILABEN R. RAMANI VS.ITO AY : 2009-10 5 4.4 IT IS CONTENDED THAT COMPELLED BY ALL THESE CIR CUMSTANCES, THE ASSESSEE APPROACHED POLICE AND FILED FIR ON 20.03.2012 FOR T HE CRIMES COMMITTED BY SHRI HARDIK RAO UNDER SECTIONS 406, 420, 465, 467, 468, 471 & 120 (B) OF THE INDIAN PENAL CODE. BESIDES, ALL THESE FACTS HAVE B EEN COMMUNICATED TO DIRECTOR GENERAL OF INCOME-TAX (INV.). IT IS ALSO CONTENDED THAT THE ASSESSEES CONTENTIONS ARE DULY CORROBORATED BY AFF IDAVIT, POLICE COMPLAINT AND THE LETTER WRITTEN TO DIRECTOR GENERAL OF INCOM E-TAX (INV.). IT IS ARBITRARY AND UNJUSTIFIED THAT FOR THE WRONG COMMITTED BY SHR I HARDIK RAO, THE ASSESSEE-LADY IS BEING SADDLED WITH HUGE TAX LIABIL ITY AND INTEREST THEREON FOR NO FAULT OF HER. THEREFORE, EITHER THE ADDITIO N MAY BE DELETED OR ALTERNATIVELY, THE ISSUE MAY BE SET ASIDE BACK TO T HE FILE OF THE ASSESSING OFFICER TO MAKE A THOROUGH ENQUIRY, TRACE-OUT SHRI HARDIK RAO AGAINST WHOM VARIOUS SUCH COMPLAINTS ARE IN PUBLIC DOMAIN A ND PROVIDE THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND RI GHT OF CROSS- EXAMINATION OF THE PERSONS DEPOSING AGAINST HER. 5. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN SHORT, HAVE BEEN NARRATED ABOVE AND ARE ELABORATELY DISCUSSED IN THE ORDERS OF THE ASSESSING OFFICER AN D LD. CIT(A). FROM THE RECORD, IT IS FOUND THAT THE ASSESSEES PLEA TO PRO VIDE CROSS-EXAMINATION HAS NOT BEEN ACCEDED TO. THE ASSESSEE BY WAY OF ADDITI ONAL GROUNDS HAS CHALLENGED THE ACTION ON THE GROUND OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND NOT PROVIDING ADEQUATE OPPORTUNITY OF H EARING. IN MY CONSIDERED VIEW, ASSESSEES DEPOSITIONS HAVE NOT BE EN CONSIDERED PROPERLY; THEREFORE, IT WILL BE DESIRABLE TO MAKE SINCERE EFF ORTS TO VERIFY THE FACTS AND TRACE OUT THE SAID SHRI HARDIK RAO WHOSE ADDRESS IS GIVEN IN THE FIR. IF NECESSARY, INFORMATION FROM THE POLICE AUTHORITIES MAY ALSO BE OBTAINED IN THIS MATTER. THE HONBLE SUPREME COURT IN THE CASE OF M/S. ANDAMAN SMC-ITA NO. 1033/AHD/2013 & CO NO.152/AHD/2013 SMT KOKILABEN R. RAMANI VS.ITO AY : 2009-10 6 TIMBER INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCIS E, IN CIVIL APPEAL NO. 4228 OF 2006, DATED 02.09.2015, HAS HELD THAT VIOLA TION OF PRINCIPLES OF NATURAL JUSTICE IS A SERIOUS FLAW WHICH MAKES THE O RDER NULLITY AS THE CROSS- EXAMINATION ESTABLISHES THE CREDENTIALS OF THE WITN ESSES AND THE FAIR OPPORTUNITY OF HEARING HELPS IN ASCERTAINING THE CO RRECT FACTS. RESPECTFULLY FOLLOWING THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES (SUPRA), I AM INCLINED TO SET ASIDE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING, CROSS-EX AMINATION AND MAKING PROPER INQUIRY & INVESTIGATION, INCLUDING ON THE LI NES OF OBSERVATIONS GIVEN ABOVE. 7. THE DEPARTMENTS CROSS-OBJECTION, BEING ONLY IN SUPPORT OF THE ORDER OF THE LD. CIT(A), IS NOT MAINTAINABLE AND THEREFOR E, DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES AND THE DEPARTMENTS CROSS-OBJECTION IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 6 TH JUNE, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 06/06/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD