LATE SHRI PRAVIN V. KACHARIA THROUGH LEGAL HEIR HIREN P. KACHARIA, MUMBAI V. ITO 25(3)(3), MUMBAI

ITA 1343/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2155 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Assessee Lawyers: B N RAO
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI PAWAN SINGH (JM) I.T.A. NO. 1343/MUM/2013 (ASSESSMENT YEAR 2008 - 2009) LATE SHRI PRAVIN V. KACHARIA THROUGH HIS L/R HIREN P. KACHARIA NO.305, 3 RD FLOOR, ARCADE, BHOOM HEIGHTS, DHANUKAR WADI, KANDIVALI (W), MUMBAI 400 067. VS. INCOME TAX OFFICER - 25(3)(3) ( APPELLANT ) .. ( RESPONDENT ) PAN NO.AGCPK4685K ASSESSEE BY : SHRI B.N. RAO DEPARTMENT BY : SHRI C.W. ANGOLKAR DATE OF HEARING : 01.11.2016 DATE OF PRONOUNCEMENT : 01.11.2016 O R D E R PER B.R. BASKARAN, AM : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 14 - 12 - 2012 PASSED BY LD CIT(A) - 35, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2008 - 09. 2. AT THE TIME OF HEARING, THE LD A.R DID NOT PRESS GROUND NO.1 AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. IN GROUND NO.2 & 3, THE ASSESSEE HAS CONTENDED THAT THE LD CIT(A) DID NOT GIVE HIM ADEQUATE OPPORTUNITY OF BEING HEARD. IN GROUND NO.4, THE ASSESSEE IS 2 LATE SHRI PRAVIN V. KACHARIA ITA NO. 1343/MUM/2013 CHALLENGING THE ADDITION OF RS.53,07,550/ - RELATING TO CASH DEPOSITS FOUND IN THE BANK ACCOUNT OF THE ASSESSEE. IN GROUND NO.5, THE ASSESSEE IS CHALLENGING THE DEEMED RENTAL INCOME ESTIMATED BY THE TAX AUTHORITIES. 3. THE AO RECEIVED AIR INFORMATION TO THE EFFECT THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS.10,11,700/ - IN THE SARASWAT CO - OP BANK LTD AND RS.42,95,850/ - IN STATE BANK OF SAURASHTRA. THE AO ASSESSED THE AGGREGATE CASH DEPOSITS AS INCOME OF THE ASSESSEE. THE AO ALSO NOTICED TH AT THE ASSESSEE WAS IN POSSESSION OF THREE RESIDENTIAL FLATS. HENCE THE AO COMPUTED DEEMED RENTAL INCOME IN RESPECT OF TWO FLATS AT 7% OF VALUE OF INVESTMENTS MADE IN THE FLATS. THE LD CIT(A) CONFIRMED BOTH THE ADDITIONS AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. WITH REGARD TO THE FIRST ISSUE, THE LD A.R SUBMITTED THAT THE ASSESSEE HAD FILED A LETTER DATED 02 - 02 - 2012 BEFORE LD CIT(A) SEEKING TELESCOPING BENEFIT OF WITHDRAWALS MADE FROM THE BANK ACCOUNT. HE SUBMITTED THAT THE LD CIT( A) HAS PASSED THE IMPUGNED ORDER WITHOUT CONSIDERING THE PRAYER OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS SINCE EXPIRED AND THE LEGAL HEIRS ARE PROSECUTING THIS APPEAL AND THEY DO NOT HAVE KNOWLEDGE OF TRANSACTIONS CARRIED ON BY THE ASSESSEE. H E SUBMITTED THAT, IN THE INTEREST OF NATURAL JUSTICE, THE LD CIT(A) SHOULD HAVE GIVEN TELESCOPING BENEFIT FOR WITHDRAWALS MADE FROM THE BANK ACCOUNTS. WITH REGARD TO THE DETERMINATION OF ANNUAL LETTING VALUE (ALV) FOR DEEMED TO BE LET OUT PROPERTIES, THE LD A.R SUBMITTED THAT THIS ISSUE HAS TO BE DECIDED ON THE BASIS OF DECISION RENDERED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TIP TOP TYPOGRAPHY (2014)(48 TAXMANN.COM 191). 3 LATE SHRI PRAVIN V. KACHARIA ITA NO. 1343/MUM/2013 5. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE LD CIT(A) HAS CONFI RMED THE ADDITION OF CASH DEPOSITS BY FOLLOWING THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF A GOVINDRAJULU MUDALIAR (34 ITR 807) AND ANNUAL VALUE OF DEEMED TO BE LET OUT PROPERTIES WAS DETERMINED BY FOLLOWING THE DECISION RENDERED BY HON BLE ALLAHABAD HIGH COURT IN THE CASE OF RADHADEVI DALMIA VS. CIT (1980)(125 ITR 134). 6. WE HEARD THE PARTIES AND PERUSED THE RECORD. WITH REGARD TO THE FIRST ISSUE, THERE SHOULD NOT BE ANY DISPUTE THAT THE PRINCIPLES LAID DOWN BY HONBLE SUPREME C OURT IN THE CASE OF A.GOVINDARAJULU MUDALIAR (SUPRA) SHOULD BE FOLLOWED. THE PLEA OF THE ASSESSEE IS THAT THERE WERE DEPOSITS AND WITHDRAWALS MADE IN A REPEATED MANNER IN THE BANK ACCOUNTS AND HENCE THE SOURCES FOR SUBSEQUENT DEPOSITS MAY BE TAKEN AS THE PREVIOUS WITHDRAWALS. ACCORDINGLY IT HAS BEEN PLEADED THAT THE PEAK DEPOSIT AMOUNT MAY BE ASSESSED AS INCOME. WE NOTICE THAT THE SAID PLEA HAS NOT BEEN ADDRESSED BY LD CIT(A). ACCORDINGLY WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH CONSIDERATION A T THE END OF THE LD CIT(A). 7. WITH REGARD TO THE DETERMINATION OF ANNUAL LETTING VALUE (ALV) OF DEEMED TO BE LET OUT PROPERTIES, WE HAVE NOTICED THAT THE LD CIT(A) HAS FOLLOWED THE DECISION RENDERED BY HONBLE ALLAHABAD HIGH COURT. HOWEVER, THE ASSES SEE HAS POINTED OUT THAT THE ALV SHOULD BE DETERMINED AS PER THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF TIP TOP TYPOGRAPHY (SUPRA). THERE SHOULD NOT BE ANY DISPUTE THAT THE DECISION RENDERED BY JURISDICTIONAL HIGH COURTS IS BINDING ON ALL THE AUTHORITIES BELOW IT. ACCORDINGLY WE ARE OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXAMINATION AT THE END OF LD CIT(A). 4 LATE SHRI PRAVIN V. KACHARIA ITA NO. 1343/MUM/2013 8. IN VIEW OF THE FOREGOING DISCUSSIONS, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON BOTH THE ABOVE SAID ISSUES AND RESTORE THEM TO HIS FILE FOR EXAMINING THEM AFRESH IN THE LIGHT OF DISCUSSIONS MADE SUPRA. NEEDLESS TO MENTION, THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST NOVEMBER, 2016. SD/ - SD/ - (PAWAN SINGH) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 1 ST NOVEMBER, 2016 *SSL* COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI