POOJA V. DEVNANI, MUMBAI V. ITO 15(2)(1), MUMBAI

ITA 1545/MUM/2010

• Counselvise Citation: 154519914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 10-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L K AGRAWAL
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Opportunity of being heard; Source of fund; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH ( A.M ) ITA NO.1545/MUM/2010 (ASSESSMENT YEAR: 2005-06) SMT.POOJA V.DEVNANI, OFFICE NO.1021, BLDG NO.3, NAVJIVAN SOC. LAMINGTON ROAD, MUMBAI-400008. PAN:AELPD5570K INCOME TAX OFFICER 15(2)(1), MUMBAI APPELLANT V/S RESPONDENT APPELLANT BY : SHRI BHUPE NDRA SHAH RESPONDENT BY : SHRI L.K.AGRA WAL O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.12.2009 PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2005-06 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE AN INDIVIDUAL, UNDER THE PROPRIETARY CON CERN M/S GARUDA EXPORT, IS ENGAGED IN EXPORT OF MERCHANDISE , PHARMACEUTICALS PRODUCTS, FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.NIL. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE AO ON GOING THROUGH THE STATEMENT OF AFFAIRS AS ON 31.3.2005, ENCLOSED WITH THE RETURN OF INCOME, NOTED THAT THE ASSESSEE HAS RECEIVED UNSECURED LOA NS FROM ITA NO.1545/MUM/2010 (ASSESSMENT YEAR: 2005-06) 2 SHIRIN CHARANIA RS.8,42,000/- AND FROM OTHER PARTIE S. THE ASSESSEE WAS ASKED TO FILE LOAN CONFIRMATION FROM S HIRIN CHARANIA. IT WAS OBSERVED BY THE AO THAT TILL DATE THE ASSESSEE HAS NOT FILED ANY SUCH LOAN CONFIRMATION F OR THE LOAN RECEIVED FROM SHIRIN CHARANIA NOR GAVE ANY IN FORMATION VIZ PAN, COMPLETE ADDRESS TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THE PARTIES. IN THE ABSENCE TH EREOF THE AO ADDED THE SAID LOAN OF RS.8,42,000/- ALONG WITH OTHER CASH CREDITS TO THE INCOME OF THE ASSESSEE. ON APP EAL, BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (A), IT WAS CONTENDED BY THE ASSESSEE THAT CONFIRMATION WAS GIV EN BY THE ASSESSEES REPRESENTATIVE ON 02.7.2007 AND FURT HER IT WAS EXPLAINED BY LETTER DATED 14.12.2009 THAT THE L OAN APPEARING IN THE NAME OF MRS. SHIRIN CHARANIA IS GENUINE ONE AS SHE IS A NON-RESIDENT INDIAN, WHO HAS GOT SU FFICIENT SOURCE OF FUND TO ADVANCE TO THE APPELLANT. IN SU PPORT THE ASSESSEE HAS ALSO FILED CONFIRMATION LETTERS, PHOT O COPY OF HER PASSPORT, COPIES OF BANK STATEMENTS. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX (A) OBSERVED THA T THERE IS NO PROOF OF SUCH CONFIRMATION AND OTHER NECESSA RY EVIDENCE BEFORE THE AO AND APPELLANT HAS ALSO NO T EXPLAINED AS TO WHAT WERE THE PREVAILING CIRCUMSTA NCES AND REASONABLE CAUSE WHICH PREVENTED THE APPELLANT TO F ILE SUCH EVIDENCE BEFORE THE AO. IN THIS VIEW OF THE MATTE R, THE LEARNED COMMISSIONER OF INCOME TAX (A) AFTER RELY ING ON ITA NO.1545/MUM/2010 (ASSESSMENT YEAR: 2005-06) 3 CERTAIN DECISIONS CONFIRMED THE ADDITION OF LOAN O F RS.8,42,000/-. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A), THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE SUSTEN ANCE OF ADDITION OF RS.8,42,000/-. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE HAS FILED COPIES OF STATEMENT OF AFFAIRS AS ON 31.3.2005 SHOWING THE LO AN OF RS.8,42,000/- FROM SHIRIN CHARANIA, COPY OF LOAN CO NFIRMATION FROM SHIRIN CHARANIA, COPY OF PASSPORT OF SHIRIN CH ARANIA, COPY OF LETTER DATED 2.7.2007 ADDRESSED TO THE AO ENCLOSING THE COPY OF LOAN CONFIRMATION AND THE COPY OF ASSE SSEES BANK PASSBOOK APPEARING AT PAGES 4 TO 13 OF THE ASS ESSEES PAPER BOOK. HOWEVER, THE AO WITHOUT CONSIDERING THE ABOVE DOCUMENTARY EVIDENCE HAS HELD THAT THE ASSESSEE HA S FAILED TO FILE ANY SUCH CONFIRMATION. HE FURTHER SUBMITS T HAT DESPITE THE ABOVE DOCUMENTARY EVIDENCE FILED BEFORE THE AO, THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ALSO H ELD THAT THE ASSESSEE HAS NOT FILED EVIDENCE BEFORE THE AO NOR HAS EXPLAINED THE CIRCUMSTANCES AND REASONABLE CAUSE WH ICH PREVENTED THE APPELLANT TO FILE SUCH EVIDENCE BEFOR E THE AO. HE, THEREFORE, SUBMITS THAT SINCE THE ASSESSEE HA S FILED ALL NECESSARY DOCUMENTARY EVIDENCE WHICH THE AO AND TH E ITA NO.1545/MUM/2010 (ASSESSMENT YEAR: 2005-06) 4 LEARNED COMMISSIONER OF INCOME TAX (A) HAVE NOT EXAMINED, THEREFORE, IN THE INTERESTS OF JUSTICE, T HE ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO TO EXAMINE THE SAME AFRESH. 5. ON THE OTHER HAND, THE LEARNED D.R. WHILE RELYI NG ON THE ORDER OF THE AO AND THE LEARNED COMMISSIONER OF INCOME TAX (A) SUBMITS THAT HE HAS NO OBJECTION IF THE ISSUE IS SET ASIDE TO THE FILE OF THE AO. 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECO RD, WE FIND THAT IT IS THE CLAIM OF THE ASSESSEE THAT THE ASS ESSEE HAS FILED ALL NECESSARY EVIDENCE APPEARING AT PAGES 4 TO 13 OF THE ASSESSEES PAPER BOOK BEFORE THE AO TO PROVE T HE NATURE AND SOURCE OF THE LOAN OF RS.8,42,000/-. P ER-CONTRA THE CLAIM OF THE REVENUE IS THAT THE SAID EVIDENCE S WERE NOT FILED. IN THE ABSENCE OF ANY CONTRARY MATERIA L PLACED ON RECORD BY THE REVENUE THAT THE ASSESSEE HAS NOT FIL ED THE SAME AND KEEPING IN VIEW THE INTERESTS OF JUSTICE, WE CONSIDER IT FAIR AND REASONABLE THAT THE MATTER SH OULD GO BACK TO THE FILE OF THE AO AND ACCORDINGLY, WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS AC COUNT AND SEND BACK THE MATTER TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDIN G THE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ITA NO.1545/MUM/2010 (ASSESSMENT YEAR: 2005-06) 5 GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES., 7. THE LAST GROUND TAKEN BY THE ASSESSEE IS AGAINS T THE LEVY OF INTEREST UNDER SECTION 234 OF THE ACT. 8. IN THE ABSENCE OF ANY SUPPORTING MATERIAL OR PLE A TAKEN BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING, THE GROUND TAKEN BY THE ASSESSEE AGAINST T HE LEVY OF INTEREST IS ALSO SET ASIDE TO THE FILE OF THE A O TO DECIDE THE SAME AFRESH ACCORDING TO LAW AFTER PROVIDING T HE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 9. IN THE RESULT, THE ASSESSEES APPEAL STANDS PART LY ALLOWED FOR STATISTICAL PURPOSE.. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY,2011. SD SD (RAJENDRA SINGH ) (D.K.A GARWAL) ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI, DATED 20 TH MAY, 2011 SRL:11511 ITA NO.1545/MUM/2010 (ASSESSMENT YEAR: 2005-06) 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILED. TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI