Sri. Atul S Kamath, Bangalore V. ITO, Bangalore

ITA 1268/BANG/2010

• Counselvise Citation: 126821114 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-03-2012
• Assessment Year: 1996-1997
• Appeal Filed On: 19-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SARAVANAN
• Assessee Lawyers: V CHANDRASHEKAR
• Keywords: Gift
• Section: 234B; 147; 56; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NO.1268/BANG/2010 (ASSESSMENT YEAR : 1996-98) SRI ATUL S. KAMATH, NO.4/A, DEAUVILLE APARTMENTS, NO.19, CHURCH STREET, BANGALORE-560 001 . APPELLANT. PAN ACMPK 0505C VS. INCOME TAX OFFICER, WARD 1(1), HMT BHAVAM. BANGALORE. .. RE SPONDENT. APPELLANT BY : SHRI V. CHANDRASHEKAR. RESPONDENT BY : SHRI B. SARAVANAN. DATE OF HEARING : 14.03.2012. DATE OF PRONOUNCEMENT : 14.3.2012. O R D E R PER SHRI JASON P. BOAZ, A.M . : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, BANGALORE F OR THE ASSESSMENT YEAR 1996-97 DT.28.8.2010. 2. THE FACTS OF THE CASE, AS PER RECORDS, ARE AS UN DER : 2 ITA NO.1268/BANG/10 2.1 THE ASSESSEE, AN INDIVIDUAL, WAS MANAGING DIREC TOR OF A COMPANY CALLED M/S. GREEN CORP. FINANCIAL SERVICES (P)N LTD. RETURN OF INCOM E FOR ASSESSMENT YEAR 1996-97 WAS FILED ON 30.8.1996 ADMITTING INCOME OF RS.95,280 AN D WAS PROCESSED UNDER SECTION 143(1)(A) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED AS 'THE ACT') ON 27.12.1996. ASSESSMENT PROCEEDINGS WERE INITIATED UNDER SECTION 147 ON THE BASIS OF THE INFORMATION GATHERED DURING A SURVEY CONDUCTED BY THE DDIT (INV ), UNIT II(1), BANGALORE ON 23.6.1998 AT THE BUSINESS PREMISES OF ASSESSEE. IT WAS FOUN D THAT THE COMPANY WAS PROMOTING A GIFT SCHEME WHEREBY A PERSON COULD BECOME A MEMBER BY PAYING A SUM OF RS.2,000. EACH MEMBER COULD GET A GIFT OF RS.2,000 IN CASE HE ENRO LLS FOUR MEMBERS. THE ASSESSING OFFICER EXAMINED THE MECHANISM OF THE SCHEME AND FO UND THAT THE AGGREGATE RECEIPT OF RS.20,96,675 DURING THE YEAR WOULD REPRESENT INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ISSUED A DETAILED QUESTIONNAIRE ON 7.11.20 02 TO THE ASSESSEE PUTTING THIS PROPOSITION. SINCE THERE WAS NO COMPLIANCE THERETO , HE HELD THAT THE GIFTS ARE TO BE ASSESSED UNDER THE HEAD OTHER SOURCES IN THE HAND S OF THE ASSESSEE. HE ALSO MADE A DISALLOWANCE OF RS.75,000 OUT OF EXPENSES CLAIMED O N AN ESTIMATED BASIS. THE INCOME OF THE ASSESSEE WAS ASSESSED BY AN ORDER UNDER SECTION 144 OF THE ACT AT RS.22,60,960. 2.2 AGGRIEVED WITH THE ASSESSMENT ORDER DT.29.1.20 03, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER GIVING THE AS SESSEE 19 OPPORTUNITIES OF HEARING, DISMISSED THE APPEAL OF THE ASSESSEE AS NOT PURSUED , BY AN ORDER DT.31.10.2006. IN FURTHER APPEAL BEFORE THE ITAT, THE ASSESSEES COUNSEL PLEA DED THAT THEY HAVE THE ENTIRE DETAILS 3 ITA NO.1268/BANG/10 RELATING TO THE ADDITIONS MADE AND IF AN OPPORTUNIT Y IS GIVEN, THEY CAN CONVINCE THE ASSESSING OFFICER ABOUT THE CASE. THE TRIBUNAL VID E ORDER IN ITA NO.171(BANG)/2007 DT.29.11.2007 HELD THAT THE CASE NEEDS TO BE RECONS IDERED BY THE ASSESSING OFFICER AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 2.3 IN PURSUANCE OF THE TRIBUNALS ORDER DT.29.11.2 007, THE ASSESSING OFFICER AFFORDED THE ASSESSEE OPPORTUNITIES OF HEARING BEFORE HIM ON 11.3.2008, 23.4.2008 AND 18.8.2008 WHICH THE ASSESSEE DID NOT AVAIL. IN THE ABSENCE O F ANY DETAILS BEING FURNISHED BEFORE HIM, HE PROCEEDED TO ASSESS THE INCOME OF THE ASSES SEE AT RS.22,60,960 (AS ASSESSED IN THE ORIGINAL ASSESSMENT) BY AN ORDER DT.20.10.2008. THE ASSESSEE CARRIED THIS MATTER IN APPEAL BEFORE THE CIT(A) AND HE NOTED THAT THE ASSE SSEE WAS NOT ABLE TO FURNISH ANY DETAILS IN KEEPING WITH THE COMMITMENT/PROMISE MADE BEFORE THE TRIBUNAL INSPITE OF SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE. THE C IT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. 4. IN THE COURSE OF HEARING, THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT GROUNDS OF APPEAL AT SL.NOS.3,4,5,6 AND 8 MAY BE TR EATED AS WITHDRAWN. THEY ARE ACCORDINGLY DISMISSED. 5. GROUNDS OF APPEAL RAISED AT SL.NOS.1,2,11 & 12 A RE GENERAL IN NATURE AND NO ADJUDICATION IS REQUIRED THEREON. 4 ITA NO.1268/BANG/10 6. GROUNDS OF APPEAL RAISED AT SL.NO.10 IN RESPECT OF CHARGING OF INTEREST UNDER SECTION 234B & 234C OF THE ACT ARE DISMISSED AS NOT FEASIBLE SINCE THEY ARE CONSEQUENTIAL IN NATURE. 7.1 BY WRITTEN SUBMISSION DT.14.3.2012, THE ASSESSE E PUT FORTH A PRAYER FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL WHICH ARE AS UNDER : PRAYER FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEA L THE APPELLANT BEGS TO SUBMIT THE UNDER MENTIONED AD DITIONAL GROUNDS OF APPEAL WHICH WERE NOT URGED SPECIFICALLY IN THE ORIGINAL G ROUNDS OF APPEAL FILED AT THE TIME OF INSTITUTION OF APPEAL OR BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS), BANGALORE SPECIFICALLY DUE TO INADVERTEN CE. THESE GROUNDS DO NOT INVOLVE ANY INVESTIGATION OF ANY FACTS OTHERWISE ON THE RECORD OF THE DEPARTMENT, IT IS PRAYED THAT THE ADDITIONAL GROUND S MAY KINDLY BE ADMITTED AND DISPOSED OFF ON MERITS FOR THE ADVANCEMENT OF S UBSTANTIAL CAUSE OF JUSTICE RELIANCE IS PLACED ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT REPORTED IN 229 ITR 383. ADDITIONAL GROUNDS NOT SPECIFICALLY URGED 1. THE ADDITION MADE OF RS.22,60,960 BEING THE GIFTS R ECEIVED BY THE APPELLANT AS INCOME FROM OTHER SOURCES IS BAD IN LAW WHEN THE SA ID RECEIPTS DO NOT CONSTITUTE AS DEFINED IN SECTION 2(24) OF THE ACT M UCH LESS AS INCOME DEFINED BY SECTION 56 OF THE ACT UNDER THE FACTS AND CIRCUM STANCES OF THE CASE. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 3. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 7.2 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DUE TO INADVERTENCE THE ADDITIONAL GROUNDS OF APPEAL WERE NOT SPECIFICALLY URGED IN THE ORIGINAL GROUNDS OF APPEAL FILED BEFORE THE CIT(A). HE PLEADED THAT THESE GRO UNDS RAISED DO NOT INVOLVE INVESTIGATION 5 ITA NO.1268/BANG/10 OF ANY FACTS OTHERWISE ON THE RECORDS OF THE DEPART MENT. HE SUBMITTED THAT THEY WERE LEGAL GROUNDS, WHICH DEALT WITH THE QUESTION OF THE TAXABILITY OF THE INCOME BEING ASSESSED UNDER THE HEAD OTHER SOURCES AS BAD IN LAW AS TH E RECEIPTS OF GIFTS OF RS.22,60,868 DID NOT CONSTITUTE INCOME AS DEFINED IN SECTION 2(24) O F THE ACT MUCH LESS AS INCOME DEFINED UNDER SECTION 56 OF THE ACT. HE PRAYED FOR ADMISSI ON OF THE ADDITIONAL GROUNDS FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND PLA CED RELIANCE ON THE DECISION IN THE CASE OF NTPC LTD. VS. CIT (228 ITR 383). 7.3 THE LEARNED DEPARTMENTAL REPRESENTATIVE OBJECTE D TO THE ADMISSION OF THE ADDITIONAL GROUNDS RAISED ON THE GROUND THAT THE AS SESSEE WAS AFFORDED AMPLE OPPORTUNITIES TO PRESENT HIS CASE BEFORE THE LOWER AUTHORITIES. 7.4 WE HAVE HEARD BOTH THE PARTIES ON THE ADDITIONA L GROUNDS OF APPEAL. AFTER DUE CONSIDERATION OF THE ADDITIONAL GROUNDS, THE ARGUME NTS MADE AND THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE ADDITIONAL GROUNDS FILED BY THE ASSESSEE DO NOT INVOLVE INVESTIGATION OF ANY FACTS ON THE RECORD, BUT ARE PURELY LEGAL GROUNDS TO QUESTION THE TAXABILITY OF THE ASSESSED INCOME AND THEREFORE ADMIT THE SAME IN THE SUBSTANTIAL CAUSE OF JUSTICE. THE ADDITIONAL G ROUNDS NOW RAISED BEFORE THE TRIBUNAL HAVING NOT BEEN RAISED BEFORE THE LOWER AUTHORITIES BY THE ASSESSEE, WE FEEL THAT IT IS IN THE FITNESS OF THINGS THAT WE REMIT THE ISSUES RAIS ED IN ADDITIONAL GROUNDS TO THE ASSESSING OFFICER TO ADJUDICATE THEREON AND REDO TH E ASSESSMENT IN ACCORDANCE WITH LAW 6 ITA NO.1268/BANG/10 AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. KEEPING IN VIEW OF THE FACT THAT THE ASSESSEE HAD NOT COMPLIED WITH TH E HEARING NOTICES BEFORE THE LOWER AUTHORITIES ON EARLIER OCCASIONS LEADING TO EX-PART E ORDERS BEING PASSED, THE ASSESSEE IS DIRECTED TO CO-OPERATE WITH THE AUTHORITIES FOR COM PLETING THE ASSESSMENT PROCEEDINGS EXPEDITIOUSLY AND NOT TO TAKE UNDUE ADJOURNMENTS. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.3.2012. SD/- SD/- (P. MADHAVI DEVI) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 14.03.2012. *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - A BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDE R ASSTT. REGISTRAR, ITAT, BANGALORE .