M/s Gunjeet Singh & Sons, Ludhiana V. ITO-Ward-VI(1), Ludhiana

ITA 112/CHANDI/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2151 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1999-2000
• Appeal Filed On: 30-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI VOHRA CIT
• Keywords: Opportunity of being heard; Set aside; Capital Gains

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH , BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER ./ ITA NO.112/CHD/2020 / ASSESSMENT YEAR : 1999-2000 M/S GUNJEET SINGH & SONS, 550-L, MODEL TOWN, LUDHIANA. THE ITO, WARD-VI(1), AAYAKAR BHAWAN, RISHI NAGAR, LUDHIANA. ./ PAN NO: AAAHG3291D / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE # ! ' / REVENUE BY : SMT.MEENAKSHI VOHRA, ADDL. CIT $ % ! &/ DATE OF HEARING : 26.11.2020 '()* ! &/ DATE OF PRONOUNCEMENT : 26.11.2020 HEARING THROUGH VIDEO CONFERENCING !/ ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 15.11.2019 OF THE COMMISSIO NER OF INCOME TAX (APPEALS)-4, LUDHIANA PERTAINING TO 1999-2000 A SSESSMENT YEAR. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS : 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED BOTH IN LAW A ND FACTS IN SUSTAINING ADDITION OF RS. 4,99,295/- ON ACCOUNT OF CREDIT IN BANK ACCOUNT OF THE APPELLANT WITH PUNJAB NATIONAL BANK; 2. THAT WHILE SUSTAINING ADDITION OF RS. 4,99,295/- TH E LD. CIT(A) ERRONEOUSLY HELD THAT THAT THE LD. ASSESSING OFFICER COMPLIED WITH THE DI RECTIONS OF HON'BLE IT AT AFTER RESTORATION THE CASE BACK TO HIS FILE . 3. THAT WHILE SUSTAINING THE ADDITION OF RS. 4,99,295/ - THE LD. CIT(A) DID NOT APPRECIATE THAT CREDIT OF RS. 4,99,295/- AS HAD HAD EMANATED F ROM CAPITAL GAINS ( LONG TERM) ON ITA-112/CHD/2020 A.Y. 1999-2000 PAGE 2 OF 5 ACCOUNT OF SALE OF DIAMOND JEWELLERY STOOD ACCEPTED IN THE HANDS OF THE BUYER /THE APPELLANT FINALLY FOR THE ASSESSMENT YEAR 1998-99. 4. THAT THE APPELLANT RESERVES THE RIGHT TO ALTER OR T AKE NEW GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING. 3. THE BRIEF FACTS RELATING TO THE ISSUES UNDER CON SIDERATION ARE THAT EARLIER THE ASSESSMENT IN THIS CASE WAS COMPLE TED ON 29.09.2003 BY THE AO MAKING AN ADDITION OF RS. 4,99 ,295/- INTO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINE D CREDITS IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE PRE FERRED APPEAL AGAINST THE SAID ORDER AND THE MATTER TRAVELLED UPT O THE LEVEL OF THE TRIBUNAL. THE ITAT VIDE ORDER DATED 29.09.2008 PASSED IN ITA 348/CHD/2005 SET ASIDE THE ISSUE TO THE FILE OF THE AO. THE TRIBUNAL OBSERVED THAT THE EXPLANATION PUT FORTH BY THE ASSESSEE THAT THE CREDIT IN THE BANK ACCOUNT ON ACCOUNT OF A MOUNT RECEIVED FROM SALE OF DIAMOND JEWELLERY WAS REJECTED BY THE AO ON THE BASIS OF THE REPORT OF THE INVESTIGATION WING IN THE CASE OF M/S TAMBI EXPORTS, JAIPUR, THE ALLEGED PURCHASER OF THE JEWEL LERY, WHEREIN, IT HAS BEEN REPORTED THAT M/S TAMBI EXPORTS HAD MERELY PROVIDED AN ENTRY BY WAY OF PAYMENT OF BANK DRAFT OF THE AMOUNT IN QUESTION TO THE ASSESSEE AND THAT M/S TAMBI EXPORTS WAS NOT INTO THE ACTUAL BUSINESS BUT WAS AN ENTRY PROVIDER. THE TRI BUNAL, FURTHER CONSIDERING THE SUBMISSIONS/EVIDENCES FURNISHED BY THE ASSESSEE AND OBSERVATIONS OF THE AO BASED ON THE INVESTIGATI ON REPORT HELD THAT THE REPORT OF THE INVESTIGATION WING ON THE BA SIS OF WHICH THE IMPUGNED ADDITIONS WERE MADE INTO THE INCOME OF THE ASSESSEE BY ITA-112/CHD/2020 A.Y. 1999-2000 PAGE 3 OF 5 THE AO WAS NOT CONCLUSIVE TO DEDUCE THAT THE IMPUGN ED TRANSACTION WAS NOT GENUINE. THE TRIBUNAL FURTHER OBSERVED THAT THERE WAS NO INDICATION AS TO THE MANNER IN WHICH S UCH INVESTIGATIONS HAVE BEEN CONSIDERED IN THE ASSESSME NT OF M/S TAMBI EXPORTS BY THE CONCERNED AO. THE TRIBUNAL FU RTHER OBSERVED THAT IT WOULD BE IN THE FITNESS OF THINGS THAT SUCH EVIDENCE BE BROUGHT ON RECORD BY THE REVENUE AND TH E ASSESSEE BE CONFRONTED ON THE SAME. THE TRIBUNAL, ACCORDINGLY, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE ISSUE TO THE F ILE OF THE AO FOR DECISION AFRESH ON THE ISSUE AFTER GIVING THE ASSES SEE A REASONABLE OPPORTUNITY OF BEING HEARD. IN VIEW OF THE ABOVE D IRECTIONS OF THE TRIBUNAL, THE FRESH ASSESSMENT WAS MADE BY THE AO V IDE ORDER DATED 31.12.2009 REITERATING THE EARLIER ASSESSMENT ORDER AND REAFFIRMING THE ADDITIONS. 4. IN THE APPEAL BEFORE THE CIT(A), THE ASSESSEE BR OUGHT TO NOTICE OF THE CIT(A) THAT THE DIRECTIONS GIVEN BY T HE TRIBUNAL HAVE NOT BEEN FOLLOWED BY THE AO WHILE REAFFIRMING THE A DDITIONS. THE LD. CIT(A) DULY NOTICED THE ABOVE FACT AND WROTE LE TTER TO THE JOINT DIRECTOR OF INCOME TAX (INVESTIGATION) HEADQUARTERS , JAIPUR VIDE LETTER NO. 1855 DATED 19.03.2018 FOR NECESSARY ENQU IRY IN THE CASE OF M/S TAMBI EXPORTS WHICH HAD DIRECT CONNECTE D WITH THE CASE OF THE ASSESSEE. SUBSEQUENTLY REMINDER BEARING NO. 32 DATED 12.04.2018, NO. 2161 DATED 14.12.2018 FOR NECESSARY ACTION IN THIS RESPECT WAS ALSO SENT. LETTER WAS ALSO WRITTE N TO THE ADDL. ITA-112/CHD/2020 A.Y. 1999-2000 PAGE 4 OF 5 CIT, RANGE-3 JAIPUR TO SEND THE NECESSARY RECORDS R ELATING TO THE ASSESSMENT IN THE CASE OF M/S TAMBI EXPORTS. HOWEV ER, NO REPLY RECEIVED FROM THE CONCERNED OFFICERS OF THE INCOME TAX DEPARTMENT AT JAIPUR. THE RECORD WAS ALSO SOUGHT F ROM THE AO IN THIS CASE RELATING TO THE INVESTIGATION WING REPORT , HOWEVER, THE AO EXPRESSED HIS INABILITY TO SUBMIT HIS COMMENTS O N THE GROUND THAT THE RECORD BEING VERY OLD WAS NOT TRACEABLE. THE LD. CIT(A) THEREAFTER PROCEEDED TO DECIDE THE APPEAL ON MERITS , HOWEVER UPHELD THE ORDER OF THE AO ONLY ON THE GROUND THAT THE EARLIER ORDER FRAMED BY THE AO WAS BASED ON THE REPORT OF T HE INVESTIGATION WING. WHILE DOING SO, THE LD. CIT(A) HAS MADE OBSERVATION THAT THE DIRECTIONS OF THE ITAT WITH RE GARD TO THE ASSESSMENT IN THE CASE OF M/S TAMBI EXPORTS COULD N OT BE COMPLIED WITH DESPITE BEST EFFORTS. 5. I HAVE HEARD THE RIVAL CONTENTIONS. ADMITTEDLY THE DIRECTIONS GIVEN BY THE TRIBUNAL HAVE NOT BEEN COMPLIED WITH B Y THE AO WHILE FRAMING THE IMPUGNED ASSESSMENT IN THIS CASE. THOUGH THE LD. CIT(A) TRIED TO COMPLY WITH THE DIRECTIONS BY W RITING LETTERS TO THE CONCERNED OFFICERS RELATED TO THE INVESTIGATION AND ASSESSMENT FRAMED IN THE CASE OF M/S TAMBI EXPORTS, HOWEVER, N O RECORD WAS FURNISHED BY THEM IN THIS RESPECT TO THE LD. CIT(A) . EVEN THE ASSESSING OFFICER ALSO FAILED TO GIVE HIS COMMENTS ON THE SUBMISSIONS/OBJECTIONS SUBMITTED BY THE ASSESSEE BE FORE THE CIT(A) STATING THAT THE RECORD WAS VERY OLD AND WAS NOT TRACEABLE. ITA-112/CHD/2020 A.Y. 1999-2000 PAGE 5 OF 5 THE TRIBUNAL WHILE SETTING ASIDE THE MATTER TO THE AO HAS GIVEN A CATEGORICAL OBSERVATION THAT THE REPORT OF THE INVE STIGATION WING IN THE CASE OF M/S TAMBI EXPORTS WAS NOT CONCLUSIVE TO UPHOLD THE ADDITIONS MADE BY THE AO, RATHER THE FACTUM OF ASSE SSMENT IN THE CASE OF M/S TAMBI EXPORTS ON THE BASIS OF THE SAID INVESTIGATION REPORT WAS REQUIRED TO BE CONSIDERED/ASCERTAINED AN D FURTHER THE EVIDENCE BROUGHT ON RECORD BY THE REVENUE IS REQUIR ED TO BE CONFRONTED TO THE ASSESSEE AND THE ASSESSEE IS REQU IRED TO BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD ON THE SAME. ADMITTEDLY NEITHER THE RECORD/EVIDENCES AS DIRECTED BY THE TRIBUNAL, HAVE BEEN BROUGHT ON RECORD NOR THE ASSES SEE COULD GET THE OPPORTUNITY TO CONFRONT THE SAME. IN VIEW OF T HIS, THE ADDITIONS MADE BY THE LOWER AUTHORITIES ARE NOT SUS TAINABLE IN THE EYES OF LAW AND THE SAME ARE ORDERED TO BE DELETED. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 26.11.2020. SD/- ( ) (SANJAY GARG ) / JUDICIAL MEMBER POONAM (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE