The ITO, Ward-1, GANDHIDHAM V. Shri Anilkumar Bindlish, Anjar

ITA 1051/RJT/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7332 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CJ MANIAR
• Assessee Lawyers: SANJAY SHAH
• Keywords: Salary income; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA (JM) AND SHRI A. L. GEHL OT AM). ITA NO. 1051/RJT/2010. (ASSESSMENT YEAR 2006-07) THE I.T.O., WD.-1, VS. SHRI BINDLISH ANILKUM AR, GANDHIDHAM. PLOT -2 & 13,SURVEY 27/28/30, MEGHPER BORICHI,.ANJAR-KUTCH. PAN:AHDPB6087A. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI C. J. MANIAR, D. R. ASSESSEE BY : SHRI SANJAY SHAH. DATE OF HEARING : 23-11-2011. DATE OF PRONOUNCEMENT : 15-12-2011. O R D E R. PER A. L. GEHLOT (A.M.) : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE APPELLATE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS)-II, RAJKOT DATED 20-04- 2010 FOR ASSESSMENT YEAR 2006-07. 2. THE EFFECTIVE GROUND RAISED IN THIS APPEAL IS RE PRODUCED AS BELOW:- (1) THE LD. CIT(A)-II, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS..10,00,000/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOAN PROVED NON GEN UINE. 3. THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESS EE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY FROM KONARK TIMBERS AND ALSO HE IS A DIRECTOR IN KONARK OVERSEAS PVT. LTD. DURING THE ASSESSMENT PROCEEDIN GS, THE AO NOTICED THAT THE ASSESSEE HAS ACCEPTED UNSECURED LOAN FROM SIX PARTI ES INCLUDING LOAN OF RS.10,00,000/- FROM NIKHIL JAIN. THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS IN RESPECT OF NIKHIL JAIN BUT THE ASSESSEE FAILED TO PRODUCE THE DETAILS. THE AO NOTICED THAT THE ASSESSEE HAS FAILED TO ESTA BLISH THE IDENTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTIONS AND CRED IT WORTHINESS OF THE ITA 1051-RJT-2010 A.Y. 2006-07. 2 DEPOSITORS. EVEN THE ASSESSEE COULD NOT FURNISH TH E CONFIRMATION FROM MR. JAIN. THE AO MADE THE ADDITION OF RS.10,00,000/- U/S.68 O F THE ACT. TH CIT(A) DELETED THE SAID ADDITION A UNDER:-. (C) I AM AT LOSS TO UNDERSTAND WHY THE AO GAVE A REMARK IN HIS ORDER THAT NO REPLY CAME FROM THE APPELLANT TILL T HE DATE OF LAST HEARING 17/10/2008. IN THE ORDER, AO SAID CATEGORICALLY TH AT NO SUBMISSION WAS MADE IN THIS REGARD AND CONCLUDED THAT THE APPELLAN T HAD NOTHING TO STATE IN THE MATTER. BUT, BEFORE ME, THE APPELLANT FILED COPIES OF THESE TWO LETTERS DATED 20/5/2008 AND 13/10/2008 SUBMITTED FOR AOS P ERUSAL WITH CONFIRMATIONS OF THE LOAN CREDITORS. IN FACT, THE LETTER DTD.13/10/2008 BORE THE SIGNATURE OF THE STAFF ALONG WITH RUBBER STAMP TO INDICATE THAT THE SAID LETTER REACHED THE AO WELL AHEAD OF 17/10/2008. TH US, THE SAID LETTER ALONG WITH ENCLOSURES COULD NOT BE TAKEN AS NEW EVI DENCES BEFORE ME. THUS, THERE IS NO QUESTION OF ACCEPTANCE OR REJECTI ON, BUT I HAVE TO SEE WHETHER THESE ARGUMENTS AND EVIDENCES ARE ENOUGH TO DECIDE THE ISSUE. (CA) I VIEW THAT THE APPELLANT MET THE FOLLOWING BA SIC CRITERIA TO PROVE THE CASH CREDIT AS GENUINE - *IDENTITY OF THE PERSON: SHRI NIKHIL JAIN FURNISHED THE ADDRESS WHERE HE WA S RESIDING WHEN HE FURNISHED THE CONFIRMATION LETTER DTD.4/9/2008. HE WAS AT THAT TIME BASED AT DEBAI. THE CONFIRMATION LETTER ALSO CARRI ED TELEPHONE/FAX/POST BPX NUMBERS. THIS INFORMATION GAVE AN IDEA ABOUT TH E PERSONS IDENTIFICATION. * CREDITWORTHINESS OF THE PERSON: THE SAID CREDITOR WAS RUNNING A BUSINESS CONCERN BY NAME KUMAR TRADING CO. IN DUBAI. HIS ACTIVITY WAS IN IMPORT A ND EXPORT OF GARMENTS, UTENSILS, SCRAPS, ELECTRIC GOODS, WOOD ETC. THIS W ILL PROVE THAT THE PERSON HAS GOT SOME CREDITWORTHINESS. * GENUINENESS OF THE TRANSACTION : THE SAID PERSON GAVE LOAN OF RS.10 LAKH IN THE FOR M OF FIVE DEMAND DRAFTS OF RS.2 LAKH EACH. THE DD NOS. ARE 4356023, 024, 025, 026 & 027. THIS WILL GO TO PROVE THAT THE TRANSACTION WAS GENU INE. ALL THE ABOVE INDICATE THAT THE APPELLANT MET BEYON D DOUBT ALL THE ABOVE THREE PARAMETERS EFFECTIVELY. THUS, THE CREDIT COU LD NOT BE TAKEN AS BOGUS. THE IS NO STRONG GROUND ON THE PART OF THE A.O. TO ASSESS THE SAID LOAN AS BOGUS U/S.68. ITA 1051-RJT-2010 A.Y. 2006-07. 3 4. WE HAVE HEAD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED. THE ADMITTED FACT OF THE CASE IS THAT THE ASSESSEE DID NOT FURNISH DETAILS BEFORE THE AO. HOWEVER, THE DETAILS FILED BY THE ASSESSEE VIDE TWO LETTERS DATED 20-05- 2008 AND 13-10-2008 APPARENTLY WERE NOT BEFORE THE AO WHILE MAKING THE ASSESSMENT AS THOSE LETTERS BORE THE SIGNATURE OF T HE STAFF OF AO. THE CIT(A) IN RESPECT OF THOSE LETTERS STATED THAT THOSE LETTERS AND ENCLOSURES COULD NOT BE TAKEN AS NEW EVIDENCES BEFORE HIM. IT IS ALSO STAT ED BY THE CIT(A) THAT THE EVIDENCE FURNISHED IS SUFFICIENT TO DECIDE THE ISSU E. WE FIND THAT THE CIT(A) MAY BE CORRECT THAT THOSE EVIDENCES WERE SUFFICIENT FOR DECIDING THE ISSUE BUT SIMULTANEOUSLY, THIS IS ALSO FACT THAT THE DETAILS CLAIMED TO BE FILED BEFORE THE AO WERE NOT AVAILABLE TO THE AO WHILE MAKING THE ASSES SMENT, UNDER THIS CIRCUMSTANCES AND KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE, THE CIT(A) OUGHT TO HAVE GIVE OPPORTUNITY OF HEARING TO THE AO . WE FIND THAT THE CIT(A) DID NOT PROVIDE ANY OPPORTUNITY OF HARING TO THE AO WHI CH IS CLEAR CUT VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. KEEPING IN VIEW THE SAID PRINCIPLES OF NATURAL JUSTICE AND FACTS OF THE CASE UNDER CONSIDERATION, WE THINK PROPER TO SEND BACK THIS ISSUE TO THE FILE OF THE CIT(A) TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING T O BOTH SIDES. 5. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 -12-201 1. SD/- SD/- ( T. K. SHARMA ), ( A. L. GEHLOT ), JUDICIAL MEMBER. ACCOUNTANT MEMBER. RAJKOT. DATED: 15 -12-2011. NVA/ ITA 1051-RJT-2010 A.Y. 2006-07. 4 COPY TO:- 1.THE I.T.O, WARD-1, GANDHIDHAM.. 2.SHRI BINDLISH ANILKUMAR,MEGHPER BORICHI-ANJAR-KUT CH.. 3.THE C.I.T.(A)-II, RAJKOT. 4.THE C.I.T., RAJKOT. 5.THE D.R., ITAT, RAJKOT. TRUE COPY. BY ORDER, ASSTT. REGISTRAR, ITAT,RAJKOT.