Milan Shoppe, Madurai V. DCIT, Madurai

ITA 1387/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96493 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 05-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 08-06-2015
• Court: TRIBUNAL
• Assessee Lawyers: K RAVI SHRI A B KOLI JC
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , # '$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NO. 1387/MDS/2015 / ASSESSMENT YEAR : 2011-12 M/S. MILAN SHOPPE, THE DEPUTY COMMISSIONER OF NO.196, BYE PASS ROAD, V. INCOME-TAX, MADURAI 625 010. CENTRAL CIRCLE-I(I/C) PAN AAKFM1237H ( /APPELLANT) MADURAI. RESPONDENT) / APPELLANT BY : SHRI K. RAVI, ADVOCATE / RESPONDENT BY : SHRI A.B.KOLI, JCIT ! / DATE OF HEARING : 05.11.2015 '# ! / DATE OF PRONOUNCEMENT : 11.12.2015 % / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 27 .2.2015. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO ENHANCEMENT OF GROSS PROFIT RATE AT 34.53 % ON - - ITA 1387/15 2 COMPOSITE BASIS AND AN ADDITION OF ` 17,82,230/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN STOCK FOUND DU RING THE COURSE OF SEARCH AND STOCK RECORDED IN THE BOOK S OF ACCOUNT. 3. IN THIS CASE, THE FACTS ARE THAT THERE WAS A SEA RCH U/S.132 OF THE ACT ON 23.2.2011 AND ON PHYSICAL VERIFICATION, THE STOCK WAS FOUND AT ` 2,10,05,678/-. THE ASSESSING OFFICER OBSERVED THAT DURING THE SEARCH E XCESS STOCK WAS FOUND TO THE TUNE OF ` 30,22,227/- AND TREATED IT AS INCOME OF THE ASSESSEE U/S.69 OF THE ACT. THE A SSESSEE CARRIED THE MATTER BEFORE THE CIT(APPEALS) CHALLENG ING THE ADDITION. 4. THE CIT(APPEALS) OBSERVED THAT THE PROFIT OF THE ASSESSEE SHOULD BE ADOPTED BY APPLYING GROSS PROFIT RATIO AT 34.53% ON THE TOTAL TURNOVER OF THE ASSESSEE AS AGAINST COMPOSITE RATE AT 29.34% ON THE TOTAL TURNOVER OF T HE ASSESSEE. THUS, THE INCOME OF THE ASSESSEE WAS ENHANCED AT ` 17,82,230/-. THE ASSESSEE ALSO CHALLENGED BEFORE THE CIT(APPEALS) THAT THE ASSESSEE HAS NOT P ROVIDED COPY OF STOCK INVENTORY PREPARED AT THE TIME OF SEA RCH. - - ITA 1387/15 3 HOWEVER, THE CIT(APPEALS) OBSERVED THAT THOUGH THE ASSESSEE WAS GIVEN TIME BY THE AO TO COLLECT THE CO PY OF THE SEIZED MATERIAL BEARING NO.SR/MS/STOCK/F, SHRI AMIT P. DEDHIA, PARTNER OF THE FIRM APPEARED ON 20.2.201 5 AND INFORMED THAT HE WOULD COLLECT THE COPY ON 23.2.201 5 AFTER PAYING NECESSARY COPYING FEE, BUT HE WAS FAILED TO APPEAR BEFORE THE AO ON THE FIXED DATE I.E. 23.2.2015. TH ERE IS NO FAILURE ON THE PART OF THE DEPARTMENT TO GIVE AN OP PORTUNITY TO THE ASSESSEE TO COLLECT THE SEIZED MATERIAL. AG AINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE PRIME GRIEVANCE OF THE ASSE SSEE IS WITH REGARD TO VIOLATION OF PRINCIPLES OF NATURAL J USTICE, WHICH WAS NOT FOLLOWED BY THE LOWER AUTHORITIES. ADMITTE DLY, IN THIS CASE, THE LOWER AUTHORITIES WERE SEIZED MATERI AL BEARING NO. SR/MS/STOCK/F, WHICH SHOWED THE DETAILS OF STOCK DURING THE SEARCH AND ON THAT BASIS, THE ADDI TION WAS MADE U/S.69 OF THE ACT. IT IS AN ADMITTED FACT THA T WHENEVER THE DEPARTMENT RELYING ON THE DOCUMENTS COLLECTED D URING THE SEARCH, COPY OF THE SAME TO BE FURNISHED TO THE - - ITA 1387/15 4 ASSESSEE FOR ITS COMMENTS. THE ESSENTIAL CHARACTER ISTIC OF WHAT IS OFTEN CALLED NATURAL JUSTICE IS THAT : (1) NO MAN CAN BE JUDGE IN HIS OWN CAUSE; (2) NO MAN SHALL BE CONDEMNED UNHEARD. IN OTHER WORDS, THERE SHOULD BE IMPARTIALITY AND FA IRNESS IN DECIDING THE ISSUE. THUS, THE BASIC PRINCIPLES OF NATURAL JUSTICE ARE - (I) THAT THE PARTIES SHOULD BE GIVEN FAIR HEARING; (II) THE HEARING MUST BE BEFORE AN IMPARTIAL JUDGE; (III) THE JUDGE SHOULD HAVE NO BIAS I.E. PECUNIARY BIAS OR PERSONAL BIAS AND (IV) THE DECISION GIVEN MUST BE REASONED ONE AND THEREFORE, THE DECISION MUST BE PROCEEDED BY A SPEAKING ORDER, WHICH ENUMERATES THE REASON FOR COMING TO A PARTICULAR CONCLUSION. THE AMERICAN D UE PROCESS OF LAW POSTULATES : - (A) NOTICE; (B) OPPORTUNITY TO BE HEARD; (C) AN IMPARTIAL TRIBUNAL; AND (D) AN ORDERLY COURSE OF PROCEDURE. 6. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE ASKED FOR COPIES OF SEIZED MATERIAL WITH - - ITA 1387/15 5 PANCHANAMA DATED 24.2.2011. IN RESPONSE TO THE ASSESSEES LETTER, A LETTER DATED 16.2.2015 WAS SEN T BY THE AO REQUESTING TO APPEAR BEFORE HIM EITHER PERSONALL Y OR THROUGH ITS AUTHORIZED REPRESENTATIVE ON 20.2.2015 AT 11 AM FOR TAKING COPIES OF SEIZED MATERIAL. THE PARTN ER OF THE ASSESSEE FIRM APPEARED ON 20.2.2015 AND INFORMED TH AT HE WOULD TAKE COPY OF SEIZED MATERIAL AFTER PAYING NEC ESSARY COPYING FEE. HOWEVER, HE HAS NOT TURN UP TO TAKE C OPIES. THE LD. AR PLEADED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT APPEARING BEFORE THE AO AN D THIS LAPSE OF THE ASSESSEE SHOULD BE CONDONED. CONSIDER ING THESE FACTS, IN OUR OPINION, IT IS APPROPRIATE TO G IVE ONE MORE CHANCE TO THE ASSESSEE TO COLLECT THE SEIZED M ATERIAL AS REQUESTED BY THE ASSESSEE. ACCORDINGLY, WE REMI T THE ENTIRE ISSUE BACK TO THE FILE OF THE AO TO GIVE ONE MORE CHANCE TO COLLECT THE SEIZED MATERIAL AS SOUGHT BY THE ASSESSEE AND THEREAFTER, THE AO SHALL DECIDE THE IS SUE AFTER CONSIDERING THE COMMENTS OF THE ASSESSEE ON T HIS MATTER. SINCE, WE HAVE REMITTED THE ENTIRE ISSUE B ACK TO - - ITA 1387/15 6 THE FILE OF THE AO, WE REFRAIN FROM GOING TO THE OT HER ISSUES AT THIS STAGE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 11 TH OF DEC., 2015 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 11 TH DEC., 2015. MPO* ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.