Shri Girishkumar Vachhraj Dholakia, Ahmedabad V. The Commissioner of Income Tax-3, RAJKOT-GUJARAT

ITA 157/RJT/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3939 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDRA KUMAR CITD R
• Assessee Lawyers: SAMIR JAIN; S N SOPARKAR
• Keywords: Capital asset; Gift; Revision of order; Principle of natural justice; Source of fund; Additional evidence; Non compliance
• Section: 56(2); 133(6); 56; 263; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT OLHE VGEN] YS[KK LNL; OLHE VGEN] YS[KK LNL; OLHE VGEN] YS[KK LNL; OLHE VGEN] YS[KK LNL; , ! BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER I.T.A. NO.157/RJT/2015 ( ASSESSMENT YEAR : 2010-11 ) SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA, C/O. CHOKSI VACHHRAJ MAKANJI & CO. CHOKSI BAZAR, JUNAGADH. / VS. CIT 3, RAJKOT. # $ ./ & ./ PAN/GIR NO. : ABUPD 6245 P I.T.A. NO.158/RJT/2015 ( ASSESSMENT YEAR : 2010-11 ) SHRI DEEPAKKUMAR NATVARLAL DHOLAKIA, C/O. CHOKSI VACHHRAJ MAKANJI & CO. CHOKSI BAZAR, JUNAGADH. / VS. CIT 3, RAJKOT. # $ ./ & ./ PAN/GIR NO. : ABJPC 0536 B ( #' / APPELLANT ) .. ( ()#' / RESPONDENT ) ASSESSEE BY : SHRI S. N. SOPARKAR & SAMIR JAIN, A.R. REVENUE BY : SHRI JITENDRA KUMAR CIT-D.R. * + , - . $ / DATE OF HEARING 01/08/2018 /0 - . $ / DATE OF PRONOUNCEMENT 03/10/2018 1 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE TWO CAPTIONED APPEALS HAVE BEEN FILED AT THE IN STANCE OF THE DIFFERENT ASSESSEE AGAINST THE SEPARATE ORDERS OF THE COMMISS IONER OF INCOME ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 2 - TAX3, RAJKOT [CIT IN SHORT] DATED 27-03-2015 & 26- 03-2015 RELEVANT TO ASSESSMENT YEAR (AY) 2010-11. THE ISSUE INVOLVED IN BOTH THE APPEALS FILED BY THE DIFFERENT ASSESSEE ARE COMMON. THEREFORE BOTH THE APPEALS HAVE BEEN CLUBBE D TOGETHER FOR BREVITY, CONVENIENCE, AND ADJUDICATION. 2. FIRST, WE TAKE UP ITA NO. 158/RJT/2015 PERTAIN ING TO ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GRO UNDS OF APPEAL: 1. THE LD. CIT ERRED IN LAW AND ON FACTS IN ASSUM ING JURISDICTION U/S. 263 IGNORING THE FACT THAT THE AO TOOK JUDICIA L DECISION AFTER CONSIDERING ALL RELEVANT FACTS AND THE ORDER WAS NE ITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 2. WITHOUT PREJUDICE TO GROUND NO. 1, THE LD CIT ERRED IN LAW AND ON FACTS IN RESTORING THE ISSUE OF DISALLOWANCE OF RS. 1,255/- BEING SHARE DEMAT CHARGES ON ERRONEOUS FINDING THAT THE APPELLANT WAS RUNNING SHARE TRADING BUSINESS. 3. WITHOUT PREJUDICE TO GROUND NO. 1, THE LD CIT ERRED IN LAW AND ON FACTS IN DIRECTING TO TREAT THE AMOUNT BEING VAL UE OF GOLD BULLION RECEIVED FROM HIS OWN NEPHEW AS UNEXPLAINED , IGNORING HIS OWN RECORD OF PROCEEDINGS U/S. 263 IN ANOTHER G ROUP CASE I.E. M/S. CHOKSHI VACHHRAJ MAKANJI & CO. FOR A.Y.2010-11 IN WHICH THE SUBJECT MATTER OF GIFT WAS INITIALLY RECEIVED B Y THE SAID GROUP CONCERN AS MATERIAL LOAN IN A.Y. 2008-09 AND THEREF ORE COULD NOT BE TREATED AS UNEXPLAINED IN A.Y. 2010-11. 4. WITHOUT PREJUDICE TO GROUND NO. 1 & 3, THE LD CIT ERRED IN LAW AND ON FACTS IN TREATING THE VALUE OF GOLD BULLION RECEIVED BY THE APPELLANT AS TAXABLE U/S. 56(2) IGNORING ALL EVIDEN CES ALREADY EXAMINED BY HIM IN CONNECTION WITH PROCEEDING U/S. 263 IN OTHER GROUP CASES ON THE SAME ISSUE WITHOUT NOTICING ANY PREJUDICE TO REVENUE ON SAME FACTS. 5. THE LD CIT PASSED ORDER U/S 263 ALMOST 15 MONTHS AFTER THE LAS T HEARING AN ALLEGATIONS OF NON COMPLIANCE (PARA 11.3 OF HIS ORDER) WHEN NONE WAS EVER CALLED FOR. THE ORDER BEI NG IN GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE IS LIABLE TO BE SET ASIDE. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 3 - 6. THE LD. CIT IGNORED SIGNIFICANT MATERIAL BEING RESULT OF HIS DIRECT INQUIRY U/S. 133(6) WITH THE DONOR AND UNAMB IGUOUS CONFIRMATION WITH EVIDENCE PRODUCED BY THE DONOR AN D WITHOUT EVEN REFERRING TO SUCH MATERIAL ON HIS OWN RECORD, WRONGLY HELD THAT THE GIFT IS UNEXPLAINED. 7. THE LD. CIT ERRED IN LAW AND ON FACTS IN ISSUING DIRECTION TO INITIATE PROCEEDINGS UNDER W.T. ACT IGNORING THE FA CT THAT STOCK IN TRADE AND RESIDENCE ARE NOT ASSETS WITHIN THE ME ANING OF SECTION 2(EA) OF THE W.T. ACT. 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEA L AT THE TIME OF OR BEFORE THE HEARING OF APPEAL. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS THAT LD CIT ERRED IN HOLDING THE ORDER OF THE AO PASSED U/S 143 (3) OF THE ACT AS ERRONEOUS IN SO FAR PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF INVESTMENT, TRADING IN S HARES, GOLD ORNAMENTS. THE ASSESSEE IS ALSO DERIVING REMUNERATION AND SHAR E OF PROFIT FROM DIFFERENT FIRMS. THE ASSESSMENT WAS COMPLETED U/S 1 43(3) OF THE ACT VIDE ORDER DATED 21.12.2012 AFTER ACCEPTING THE INCOME D ECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME. THUS, THERE WAS N O ADDITION OF ANY KIND MADE BY THE AO DURING THE ASSESSMENT PROCEEDINGS TO THE TOTAL INCOME OF THE ASSESSEE. 4.1 SUBSEQUENTLY, THE LD CIT U/S 263 OF THE ACT OBS ERVED THAT THE AO PASSED THE ASSESSMENT ORDER WITHOUT CARRYING OUT PR OPER VERIFICATIONS IN RESPECT OF FOUR ITEMS. ONE OF THE ITEM WAS THAT THE ASSESSEE DURING THE YEAR HAD RECEIVED 10 KG OF GOLD FROM HIS RELATIVE V IDE GIFT DEED DATED 25.02.2010. AS PER THE LD. CIT, THIS ITEM, I.E. REC EIPT OF A GIFT OF GOLD OF ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 4 - 10 KG WAS NOT VERIFIED PROPERLY BY THE AO ABOUT THE GENUINENESS AND CREDITWORTHINESS OF THE DONOR. THEREFORE, THE LD. C IT ISSUED A NOTICE U/S 263 OF THE ACT VIDE LETTER DATED 01.10.2013. 4.2 IN COMPLIANCE TO IT THE ASSESSEE SUBMITTED AS U NDER: I. HE HAS RECEIVED GOLD IN THE FORM OF BULLION FOR 10 KG WHICH IS NOT A PROPERTY. THEREFORE, THE PROVISION OF SECTION 56 OF THE ACT CANNOT BE APPLIED. II. THE GIFT RECEIVED BY THE ASSESSEE IS ALSO NOT A CAP ITAL ASSET AS PER THE PROVISION OF SECTION 56(2)(VII) OF THE ACT AS THE WORD CAPITAL ASSET WAS BROUGHT IN THE STATUTE WITH EFFEC T FROM 01.10.2009. III. THE ASSESSEE FURTHER VIDE HIS REPLY DATED 15.10.201 3 SUBMITTED THAT THE DONOR HAD SHOWN GOLD ORNAMENTS AS STOCK IN TRADE IN HIS BALANCE SHEET AS ON 31.03.2006 AS WELL AS 31.03 .2007. THE DONOR SUBSEQUENTLY HAS GIVEN HIS GOLD AS A LOAN IN MATERIAL FORM TO M/S CVM & CO. VIDE AGREEMENT DATED 20.04.20 07. THE ASSESSEE AGAINST THIS ARRANGEMENT OF GIVING GOLD LO AN WAS TAKING USAGE CHARGES FROM CVM & CO. OF RS. 2,60,006 .00. HOWEVER, THE DONOR HAS TAKEN BACK THE MATERIAL LOAN GIVEN TO CVM & CO. IN THE F.Y. 2009-10 AND HAS GIVEN AS A GI FT TO THE ASSESSEE DATED 25.02.2010. THE ASSESSEE IN SUPPORT OF HIS CLAIM FILED THE COPY OF THE BALANCE SHEET OF THE DONOR, D ETAILS OF THE LOAN GIVEN TO THE FIRM AND ITS BALANCE SHEET, COPY OF THE PAN AND ITR TO PROVE THE GENUINENESS AND CAPACITY OF TH E DONOR. IV. THE ASSESSEE ALSO CONTENDED THAT THE ISSUE OF THE G IFT OF THE GOLD WAS DULY EXAMINED THOROUGHLY IN DETAIL AND AFTER TH AT, THE AO TOOK A CONSCIOUS DECISION FOR NOT MAKING ANY ADDITI ON TO THE TOTAL INCOME OF THE ASSESSEE. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 5 - IN VIEW OF ABOVE, THE ASSESSEE SUBMITTED THAT THE O RDER OF THE AO COULD NOT BE HELD AS ERRONEOUS IN SO FAR PREJUDICIA L TO THE INTEREST OF THE REVENUE. 4.3 HOWEVER, THE LD CIT U/S 263 OF THE ACT DISAGREE D WITH THE SUBMISSION OF THE ASSESSEE AND OBSERVED AS UNDER: I. THERE WAS ONLY ONE SUBMISSION FILED BY THE ASSESSEE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. THE AO HAS NO T FURTHER TAKEN ANY CLARIFICATION/EXPLANATION EITHER FROM THE ASSESSEE OR THE DONOR. THE AO DID NOT MAKE ANY INQUIRY TO PROVE THE TRANSACTION AS THE GENUINE VIS--VIS CREDITWORTHINE SS OF THE DONOR II. THE FINANCIAL POSITION OF THE DONOR IS VERY POOR, A ND HE CARRIES A LOT OF FAMILY RESPONSIBILITIES. III. THE DONOR IN RESPONSE TO THE NOTICE ISSUED U/S 133( 6) OF THE ACT HAS REPLIED BY LETTER DATED 28.10.2013 THAT HE POSS ESSED THE GOLD AS OWNER. THE DONOR ALSO FILED THE COPIES OF T HE BALANCE SHEET AND OTHER STATEMENTS IN WHICH SUCH LOAN WAS D ISCLOSED IN THE INCOME TAX RETURN. HOWEVER, THE ASSESSEE FAILED TO JUSTIFY THE SOURCE OF FUND FOR THE ACCUMULATION OF THE GOLD . AS PER THE LD. CIT, THE ASSESSEE HAS NOT SUBMITTED DOCUMENTARY EVIDENCE SUGGESTING THAT THE DONOR IS THE OWNER OF SUCH GOLD . IV. THE GIFT WAS TAKEN BY THE ASSESSEE FROM HIS COUSIN NAMELY SHRI DIVYESH ASHOK DHOLAKIA AND DOES NOT FALL WITHIN THE MEANING OF RELATIVE AS EXPLAINED IN SECTION 56 (2)(VII) OF THE ACT. V. THE CIT ALSO OBSERVED THAT IN THE GIFT DEED IT IS C LEARLY MENTIONED THAT THE GOLD ORNAMENTS WERE GIFTED TO TH E ASSESSEE. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 6 - THERE WAS NO MENTION OF BULLION. THERE WAS ALSO NO CONVERSION COST INCURRED JUSTIFYING THAT THE GOLD WAS CONVERTE D INTO BULLION. VI. IN VIEW OF THE ABOVE, THE LD. CIT DIRECTED THE AO T O MAKE THE ADDITION BY OBSERVING AS UNDER: 11.4. KEEPING IN VIEW THE ABOVE DISCUSSED FACTS AN D LAW, THE AO IS DIRECTED TO MAKE AN ADDITION OF RS.1,78,75,440/- BE ING THE VALUE OF GOLD ORNAMENTS WEIGHING TO 10833.6 GINS, AS MENTION ED IN THE DEED OF CONVEYANCE AND ACCEPTANCE. SINCE, THE AFORESAID ASSET HAS ALREADY BEEN CONSIDERED AND THE AO HAS BEEN DIRECTE D TO ADD THE SAME TO THE INCOME OF THE ASSESSEE INVOKING THE PRO VISIONS OF CHAPTER VI OF THE ACT, THE AO IS DIRECTED TO MAKE A N ADDITION OF RS.1,78,75,440/- ON ACCOUNT OF RECEIPT OF GIFT U/S 56(2)(VII) OF THE ACT ON PROTECTIVE BASIS SIMULTANEOUSLY. AS THE ASSESSEE HAS CONCEALED HIS PARTICULARS OF HIS INCOME, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT SHALL BE INITIATED. BEING AGGRIEVED BY THE ORDER OF LD CIT ASSESSEE IS IN THE SECOND APPEAL BEFORE US. 5. THE LD AR FOR THE ASSESSEE BEFORE US FILED A PAP ER BOOK WHICH IS RUNNING FROM PAGES 1-242 AND SUBMITTED THAT THE LAS T HEARING WAS CONCLUDED ON DATED 19-11-2013 WHEREAS, THE ORDER W AS PASSED U/S 263 OF THE ACT ON 26.03.2015 WHICH SHOWS THAT THE ORDER WA S PASSED BY THE LD CIT U/S 263 AFTER ALMOST 15 MONTHS OF THE LAST DATE OF HEARING. 5.1 THE LD. AR FURTHER SUBMITTED THAT ALL THE NECES SARY DETAILS ABOUT THE RECEIPT OF GIFT FOR 10 KG OF GOLD WERE DISCLOSE D IN THE CAPITAL ACCOUNT OF THE ASSESSEE. THE LD. AR IN SUPPORT OF HIS CLAIM DREW OUR ATTENTION ON THE COPY OF THE CAPITAL ACCOUNT OF THE ASSESSEE PLA CED ON PAGE 234 OF THE ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 7 - PAPER BOOK. THEREFORE, THE FINDING OF THE LD CIT TH AT NO CONCRETE EVIDENCE WAS PROVIDED DURING ASSESSMENT PROCEEDINGS IS NOT CORRECT. 5.2 THE LD AR ALSO SUBMITTED THAT THE LD CIT U/S 26 3 OF THE ACT HAS HELD THAT THE ASSESSEE DID NOT PROVIDE SUFFICIENT D ETAILS. THUS THE LD. CIT ALLEGED THAT NO PROPER VERIFICATION WAS CARRIED OUT BY THE AO DURING THE ASSESSMENT PROCEEDINGS. BUT THE LD. CIT AFTER THE E XPIRY OF 15 MONTHS HAS DIRECTED TO MAKE THE ADDITION TO THE TOTAL INCO ME OF THE ASSESSEE ON ACCOUNT OF SUCH GOLD RECEIVED AS A GIFT. THE LD. CI T BEFORE GIVING THE DIRECTION TO THE AO HAS NOT ISSUED ANY SHOW-CAUSE N OTICE TO THE ASSESSEE ASKING TO PROVIDE THE REQUISITE INFORMATION. 5.3 THE LD. AR FURTHER DREW OUR ATTENTION ON PAGE 2 15 OF THE PAPER BOOK DEMONSTRATING THAT THE AO DULY ENQUIRED ABOUT THE DETAILS OF THE CAPITAL ACCOUNT OF THE ASSESSEE. THE LD AR ACCORDIN GLY SUBMITTED THAT THE REPLY WAS DULY FILED TO THE AO DURING THE ASSES SMENT PROCEEDINGS WHICH IS PLACED ON PAGES 128, 154 AND 155 OF THE PA PER BOOK. 5.4 THE LD AR ALSO SUBMITTED THAT THE AMOUNT OF GOL D RECEIVED AS A GIFT FROM THE DONOR WAS DULY DISCLOSED IN THE BOOKS OF A CCOUNTS WHICH IS PLACED ON PAGE 196 OF THE PAPER BOOK. 5.5 THE LD AR FURTHER SUBMITTED THAT THE AMOUNT OF USAGE CHARGES RECEIVED FROM CVM & CO. BY THE ASSESSEE WAS DULY DI SCLOSED IN ITS BOOKS WHICH IS PLACED ON PAGE 95 OF THE PAPER BOOK. SIMILARLY, THE ENTRY ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 8 - FOR RECEIPT OF GOLD AS A LOAN BY CVM & CO. WAS SHOW N IN THE BOOKS OF ACCOUNTS WHICH IS PLACED ON PAGE 96 OF THE PAPER BO OK. 5.6 THE LD. AR ALSO SUBMITTED THAT THE AMOUNT OF GO LD WAS RECEIVED BY THE ASSESSEE AS A GIFT, AS A RESULT OF FAMILY ARRAN GEMENT. THUS THE GOLD WAS RECEIVED BY THE ASSESSEE FROM THE RELATIVE. 6. ON THE OTHER HAND, THE LD DR SUBMITTED THAT THER E WAS NO PREJUDICE TO THE ASSESSEE IF THE LD. CIT PASSES THE ORDER AFT ER THE EXPIRY OF 15 MONTHS. THE LD. DR FURTHER SUBMITTED THAT THE AO HA D NOT CONDUCTED PROPER INQUIRY ABOUT THE GIFT RECEIVED BY THE ASSES SEE OF 10 KG GOLD. 7. THE LD. AR IN HIS REJOINDER FAIRLY CONCEDED THE FACT THAT THE ORDER OF THE AO IS NOT SPEAKING AND HAS NOT CONSIDERED TH E FACTS IN PROPER PERSPECTIVE. THE LD. AR BEFORE US FILED ADDITIONAL EVIDENCE WITH THE REQUEST TO ADMIT THE SAME AND FURTHER SUBMITTED THA T THIS ADDITIONAL EVIDENCE IS CRUCIALLY AND GOES TO THE ROOT OF THE M ATTER WHICH ARE PLACED ON RECORD. THESE EVIDENCES ARE CERTAINLY REQUIRED T O BE CONSIDERED BY THE AO. THE LD. AR ACCORDINGLY PRAYED THAT THE MATTER CAN BE RESTORED BACK TO THE AO FOR FRESH ADJUDICATION BUT WITHOUT GETTIN G INFLUENCED BY THE ORDER OF LD CIT PASSED U/S 263 OF THE ACT. 8. THE LD. DR DID NOT OBJECT IF THE MATTER IS RESTO RED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION BY THE PROVISIONS OF LAW. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 9 - 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE LD CI T U/S 263 OF THE ACT HAS HELD THAT THE ORDER OF THE AO ERRONEOUS IN SO FAR P REJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY, DIRECTED THE AO TO MAKE THE ADDITION FOR THE AMOUNT OF GIFT RECEIVED BY THE ASSESSEE IN THE FORM OF GOLD. THE LD CIT, U/S 263 OF THE ACT, ALSO ISSUED NOTICE U/S 133(6) O F THE ACT TO THE DONOR TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THE DONOR. IN REPLY, THE DONOR HAS SUBMITTED THAT HE HAS FULLY DISCLOSED THE GOLD IN HIS BALANCE SHEET IN THE EARLIER YEARS BUT FAILED TO ESTABLISH THE SOURCE OF ACCUMULATION OF SUCH HUGE GOLD TO HIS HANDS. THUS, THE LD CIT DIRECTED THE AO TO MAKE THE ADDITION FOR THE GIFT RECEIVED B Y THE ASSESSEE. 9.1 FROM THE PRECEDING ADDITION, IT IS AN UNDISPUTE D FACT THAT THE LD CIT PASSED THE ORDER AFTER THE EXPIRY OF 15 DAYS AF TER THE LAST CONCLUSION OF THE HEARING. IN THIS REGARD, WE FIND THAT THE CB DT HAS ISSUED INSTRUCTION VIDE ITS FILE NO. 279/MISC/53/2003/ITJ DATED 19.06.2015 TO PASS THE ORDER WITHIN 15 DAYS OF THE LAST HEARING. THE RELEVANT EXTRACT OF THE INSTRUCTION IS REPRODUCED BELOW: CBDT HAS LATELY NOTICED THAT TERMS OF INSTRUCTION NO. 20 /2013 DATED 23-12-2003 (COPY ENCLOSED) ON THE SUBJECT MENTIONED ABOVE ARE NOT BEING ADHERED TO. THE OPERATIVE PART OF THE INSTRUC TION IS REPRODUCED BELOW FOR READY REFERENCE: 2. THE BOARD DESIRES THAT APPELLATE ORDERS BY COMM ISSIONER OF INCOME TAX (APPEALS) SHOULD BE ISSUED WITHIN 15 DAYS OF TH E LAST HEARING. ANY LAPSE ON THIS ACCOUNT SHALL BE VIEWED ADVERSELY. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 10 - 3. THIS SHALL BE APPLICABLE TO ORDERS PASSED BY TH E CIT (ADMINISTRATION)/CCIT AS REGARDS MATTERS WITHIN THE IR PURVIEW UNDER VARIED SECTIONS OF INCOME TAX ACT SUCH AS SECTIONS 80G, 264, 263 OR ORDERS UNDER RULE 86 OF SECOND SCHEDULE AND UNDER O THER ALLIED DIRECT TAXES. 2. YOU ARE REQUESTED TO ENSURE STRICT COMPLIANCE OF THE ABOVE BY ALL THE OFFICERS CONCERNED . FROM THE ABOVE, IT IS CLEAR THAT THE LD CIT HAS PAS SED THE ORDER U/S 263 OF THE ACT AFTER A CONSIDERABLE DELAY OF 15 MONTHS AND IN BETWEEN NO NOTICE OF HEARING WAS ISSUED TO THE ASSESSEE. 9.2 WE ALSO FIND THAT HONBLE SUPREME COURT IN HIS LANDMARK JUDGMENT IN THE CASE OF ANIL RAI VS. STATE OF BIHAR IN APPEAL (CRL.) 389 OF 1998 HAS LAID DOWN CERTAIN GUIDESLINES FOR PASSI NG THE ORDER WITHIN THE REASONABLE TIME. THE RELEVANT EXTRACT OF THE ORDER IS EXTRACTED BELOW: 20. UNDER THE PREVALENT CIRCUMSTANCES IN SOME OF T HE HIGH COURTS, I FEEL IT APPROPRIATE TO PROVIDE SOME GUIDELINES REGARDING THE PRONOUNCEMENT OF JUDGMENTS WHICH, I AM SURE, SHALL BE FOLLOWED BY AL L CONCERNED, BEING THE MANDATE OF THIS COURT. SUCH GUIDELINES, AS FOR PRES ENT, ARE AS UNDER: (I) THE CHIEF JUSTICES OF THE HIGH COURTS MAY ISSUE APPROPRIATE DIRECTIONS TO THE REGISTRY THAT IN CASE WHERE THE JUDGMENT IS RESERVED AND IS PRONOUNCED LATER, A COLUMN BE ADDED IN THE JUDGMENT WHERE, ON THE FIRST PAGE, AFTER THE CAUSE-TITLE, DATE OF RESERVING THE JUDGMENT AND DATE OF PRONOUNCING IT BE SEPARATELY MENTIONED BY THE COURT OFFICER CONCERNED. (II) THAT CHIEF JUSTICE OF THE HIGH COURTS, ON THEI R ADMINISTRATIVE SIDE, SHOULD DIRECT THE COURT OFFICERS/ READERS OF THE VA RIOUS BENCHES IN THE HIGH COURTS TO FURNISH EVERY MONTH THE LIST OF CASE S IN THE MATTERS WHERE THE JUDGMENTS RESERVED ARE NOT PRONOUNCED WITHIN TH E PERIOD OF THAT MONTHS. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 11 - (III) ON NOTICING THAT AFTER CONCLUSION OF THE ARGU MENTS THE JUDGMENT IS NOT PRONOUNCED WITHIN A PERIOD OF TWO MONTHS, THE CONCE RNED CHIEF JUSTICE SHALL DRAW THE ATTENTION OF THE BENCH CONCERNED TO THE PENDING MATTER. THE CHIEF JUSTICE MAY ALSO SEE THE DESIRABILITY OF CIRC ULATING THE STATEMENT OF SUCH CASES IN WHICH THE JUDGMENTS HAVE NOT BEEN PRO NOUNCED WITHIN A PERIOD OF SIX WEEKS FROM THE DATE OF CONCLUSION OF THE ARGUMENTS AMONGST THE JUDGES OF THE HIGH COURT FOR THEIR INFORMATION. SUCH COMMUNI-CATION BE CONVEYED AS CONFIDENTIAL AND IN A SEALED COVER. (IV) WHERE A JUDGMENT IS NOT PRONOUNCED WITHIN THRE E MONTHS, FROM THE DATE OF RESERVING IT, ANY OF THE PARTIES IN THE CAS E IS PERMITTED TO FILE AN APPLICATION IN THE HIGH COURT WITH PRAYER FOR EARLY JUDGMENT. SUCH APPLICATION, AS AND WHEN FILED, SHALL BE LISTED BEF ORE THE BENCH CONCERNED WITHIN TWO DAYS EXCLUDING THE INTERVENING HOLIDAYS. (V) IF THE JUDGMENT, FOR ANY REASON, IS NOT PRONOUN CED WITHIN A PERIOD OF SIX MONTHS, ANY OF THE PARTIES OF THE SAID LIS SHAL L BE ENTITLED TO MOVE AN APPLICATION BEFORE THE CHIEF JUSTICE OF THE HIGH CO URT WITH A PRAYER TO WITHDRAW THE SAID CASE AND TO MAKE IT OVER TO ANY O THER BENCH FOR FRESH ARGUMENTS. IT IS OPEN TO THE CHIEF JUSTICE TO GRANT THE SAID PRAYER OR TO PASS ANY OTHER ORDER AS DEEMS FIT IN THE CIRCUMSTAN CES. 21. WE HOPE AND TRUST THAT THE ABOVE GUIDELINES SHA LL BE STRICTLY FOLLOWED AND IMPLEMENTED, CONSIDERING THEM AS SELF-IMPOSED R ESTRAINTS. 9.3 WE ALSO FIND THAT THE ASSESSEE HAS FILED ADDITI ONAL DOCUMENTS DETAILED AS UNDER: APPELLANT CRAVES LEAVE TO PLACE THE FOLLOWING ADDI TIONAL EVIDENCE ON RECORD OF THIS HON'BLE TRIBUNAL. 1. J V VOUCHER DATED 20.04.2007 FOR ORIGINAL LOA N BY DONOR (PAGES 1 TO 1) 2. COPY OF DAY BOOK FROM THE BOOKS OF ORIGINAL D ONOR (PAGE 2-3) 3. VOUCHERS FOR MELTING BY DONOR DATED 03 TO 18. 04.2007 (PAGES 4 TO 5) 4. FAMILY TREE (PAGE 6) 5. ORDER OF ITAT QUASHING 263 ORDER FOR A.Y.2010 -11 IN THE CASE OF M/S. CHOKSHI VACHHRAJ MAKANJI & CO. (PAGES 7-20) 6. SHOW CAUSE FOR 263 IN THE CASE OF M\S. CHOKSH I VACHHRAJ MAKANJI & CO. (PAGES 21 TO 27) 7. ASSESSMENT ORDER U/S. 143 (3) FOR A.Y.2009-1 0 IN THE CASE OF M/S. CHOKSHI VACHHRAJ MAKANJI & CO. (PAGES 28 TO 31) ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 12 - THE ADDITIONAL EVIDENCE IS HEREBY PLACED ON RECORD OF THIS HON'BLE TRIBUNAL AS SAME IS TO PROVE THAT THE GIFT IS GENUI NE, THE DONOR HAD CAPACITY & THE SUBJECT MATTER OF GIFT WAS GOLD BULL ION AND NOT GOLD ORNAMENTS SAME WILL HELP TO APPRECIATE THE CONTROVE RSY IN A BETTER AND PROPER MANNER AND FURTHER THE EVIDENCE PROPOSED TO BE PLACED BEFORE THIS HON'BLE ITAT IS IMPORTANT AND DECISIVE EVIDENC E IN DETERMINING THE CONTROVERSY IN JUST AND EQUITABLE MANNER. 9.4 ON PERUSAL OF THESE ADDITIONAL DOCUMENTS, WE FI ND THAT THESE ADDITIONAL DOCUMENTS GO TO THE ROOT OF THE MATTER A ND ARE VERY CRUCIAL IN THE DECISION MAKING PROCESS. AT THIS STAGE, WE FIND IMPORTANT TO REFER THE RULE 29 OF THE ITAT RULE WHICH READS AS UNDER: [ PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE TRIBUN AL. 29. THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIB UNAL, BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR AN Y WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE, OR , IF THE INCOME-TAX AUTHORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRIBUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED O R AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED.] 9.5 IN THE LIGHT OF THE ABOVE RULE, WE DEEM IT FIT AND APPROPRIATE TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE FOR THE CONSIDERATION OF THE AO. IN HOLDING SO, WE FIND SUPPORT AND GUIDA NCE FROM THE ORDER OF HONBLE ITAT CHENNAI BENCH IN THE CASE OF MASCON GL OBAL LIMITED VS ACIT REPORTED IN 37 SOT 202 WHEREIN, IT WAS HELD AS UNDER: THE OTHER OBJECTION OF THE JUDICIAL MEMBER WAS THA T THERE WAS NO FORMAL APPLICATION UNDER RULE 29 OF THE ITAT RULES FOR ADMISSION OF THE ADDITIONAL EVIDENCE. ON GOING THROUGH THE RULE, NO REQUIREMENT WAS FOUND THEREIN THAT THERE SHOULD BE A FORMAL WRITTEN APPLICATION BEFORE THE TRIBUNAL FOR ADMISSION OF THE ADDITIONAL EVIDEN CE. THESE ARE RULES OF ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 13 - PROCEDURE AND IN A FIT CASE AND DEPENDING ON THE CI RCUMSTANCES IT WOULD BE OPEN TO THE TRIBUNAL TO ADMIT ADDITIONAL E VIDENCE WHEN IT IS PRODUCED IN THE COURT AND AN ORAL APPLICATION IS MA DE. THERE IS NO HARD AND FAST RULE IN THIS BEHALF AND IT SHOULD BE LEFT TO THE DISCRETION OF THE BENCH. THE ACCOUNTANT MEMBER EXERCISED SUCH DIS CRETION PROPERLY. RULE 29 PERMITS THE TRIBUNAL TO ADMIT THE ADDITIONA L EVIDENCE FOR ANY SUBSTANTIAL CAUSE. APPARENTLY THE ACCOUNTANT MEMBER HAD ADMITTED THE ADDITIONAL EVIDENCE ON THIS GROUND WHICH COULD NOT BE DISAGREED WITH. THE INTENTION BEHIND THE RULE IS THAT SUBSTANTIAL J USTICE SHOULD BE DONE AND THE INTEREST OF THE JUSTICE SHOULD BE THE OVERR IDING CONSIDERATION. THEREFORE, THERE WAS NO ERROR IN THE ACCOUNTANT MEM BER ADMITTING THE ADDITIONAL EVIDENCE AND SENDING IT TO THE COMMISSIO NER FOR EXAMINATION AND DECISION. 9.6 THUS, IN VIEW OF ABOVE WE INCLINE TO ADMIT THE ADDITIONAL EVIDENCE AS DISCUSSED ABOVE. THUS, WE DIRECT THE AO TO MAKE THE ASSESSMENT AFRESH AFTER CONSIDERING THE ADDITIONAL DOCUMENTS A S DISCUSSED ABOVE AND WITHOUT GETTING INFLUENCED BY THE ORDER OF LD CIT P ASSED U/S 263 OF THE ACT DATED 26.03.2015. THUS, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. NOW WE COME TO ITA NO.157/RJT/2015 PERTAINING T O THE ASST. YEAR 2010-11. FOLLOWING GROUNDS WERE TAKEN BY THE A SSESSEE: 1. THE LD. CIT ERRED IN LAW AND ON FACTS IN ASSU MING JURISDICTION U/S. 263 IGNORING THE FACT THAT THE AO TOOK JUDICIA L DECISION AFTER CONSIDERING ALL RELEVANT FACTS AND THE ORDER WAS NE ITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 2. WITHOUT PREJUDICE TO GROUND NO. 1, THE LD CIT ERRED IN LAW AND ON FACTS IN RESTORING THE ISSUE OF DISALLOWANCE OF RS. 1,255/- BEING SHARE DEMAT CHARGES ON ERRONEOUS FINDING THAT THE APPELLANT WAS RUNNING SHARE TRADING BUSINESS. 3. WITHOUT PREJUDICE TO GROUND NO. 1, THE LD CIT ERRED IN LAW AND ON FACTS IN DIRECTING TO TREAT THE AMOUNT BEING VAL UE OF GOLD BULLION RECEIVED FROM HIS OWN NEPHEW AS UNEXPLAINED , IGNORING HIS OWN RECORD OF PROCEEDINGS U/S. 263 IN ANOTHER G ROUP CASE I.E. ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 14 - M/S. CHOKSHI VACHHRAJ MAKANJI & CO. FOR A.Y.2010-11 IN WHICH THE SUBJECT MATTER OF GIFT WAS INITIALLY RECEIVED B Y THE SAID GROUP CONCERN AS MATERIAL LOAN IN A.Y. 2008-09 AND THEREF ORE COULD NOT BE TREATED AS UNEXPLAINED IN A.Y. 2010-11. 4. WITHOUT PREJUDICE TO GROUND NO. 1 & 3, THE LD CIT ERRED IN LAW AND ON FACTS IN TREATING THE VALUE OF GOLD BULLION RECEIVED BY THE APPELLANT AS TAXABLE U/S. 56(2) IGNORING ALL EVIDEN CES ALREADY EXAMINED BY HIM IN CONNECTION WITH PROCEEDING U/S. 263 IN OTHER GROUP CASES ON THE SAME ISSUE WITHOUT NOTICING ANY PREJUDICE TO REVENUE ON SAME FACTS. 5. THE LD. CIT PASSED ORDER U/S. 263 ALMOST 15 MO NTHS AFTER THE LAST HEARING AND LEVELED ALLEGATIONS OF NON COMPLIA NCE (PARA 11.3 OF HIS ORDER) WHEN NONE WAS EVER CALLED FOR. T HE ORDER BEING IN GROSS VIOLATION OF PRINCIPLE OF NATURAL JU STICE IS LIABLE TO BE SET ASIDE. 6. THE LD. CIT IGNORED SIGNIFICANT MATERIAL BEIN G RESULT OF HIS DIRECT INQUIRY U/S. 133(6) WITH THE DONOR AND UNAMB IGUOUS CONFIRMATION WITH EVIDENCE PRODUCED BY THE DONOR AN WITHOUT EVEN REFERRING TO SUCH MATERIAL ON HIS OWN RECORD, WRONGLY HELD THAT THE GIFT I UNEXPLAINED. 7. THE LD. CIT ERRED IN LAW AND ON FACTS IN ISSUI NG DIRECTION TO INITIATE PROCEEDINGS UNDER W.T. ACT IGNORING THE FA CT THAT STOCK IN TRADE AND RESIDENCE ARE NOT ASSETS WITHIN THE ME ANING OF SECTION 2(EA) OF THE W.T. ACT. 8. THE HON. CIT-3, RAJKOT HAS ERRED IS SETTING A SIDE THE SOURCE OF INVESTMENT MADE OF RS. 21,18, 585/- + RS.125918/- I N SPITE OF THE SAME BEING VERIFIED BY LD. A.O. 9. THE APPELLANT HUMBLY REQUESTS THAT COST BE AWA RDED IN THIS APPEAL ON ACCOUNT OF ARBITRARY MANNER IN WHICH THE ORDER IS PASSED BY THE DEPARTMENT. 10. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTE R, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEA L AT THE TIME OF OR BEFORE THE HEARING OF APPEAL. 11. THE ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS IDENTICAL TO THE ISSUES RAISED IN ITA NO. 158/RJT/2015. THEREFORE, A T THE OUTSET OF HEARING BOTH THE LD AR AND DR AGREED THAT WHATEVER VIEW WILL BE TAKEN IN ITA NO. 158/RJT/2015 WILL BE APPLIED TO THIS CAS E ALSO. THEREFORE ITA NOS.157 & 158/RJT/2015 SHRI GIRISHKUMAR VACHHRAJ DHOLAKIA & SHRI DEEPAKKUM AR NATVARLAL DHOLAKIA A.Y. 2010-11 - 15 - RESPECTFULLY FOLLOWING THE ORDER AS DISCUSSED ABOVE , WE ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE FOR THE STATISTIC AL PURPOSES IN TERMS OF THE ABOVE. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR THE STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 03/10/2018 SD/- SD/- JKTIKY ;KNO JKTIKY ;KNO JKTIKY ;KNO JKTIKY ;KNO OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 03/10/2018 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. #' / THE APPELLANT 2. ()#' / THE RESPONDENT. 3. 2 . * 3. / CONCERNED CIT 4. * 3. ( ) / THE CIT(A)- 3, RAJKOT. 5. 45 6 (.+ , , /DR,ITAT, RAJKOT 6. 6 7 8 , / GUARD FILE. / BY ORDER, ) 4. (. //TRUE COPY// / ( DY./ASSTT.REGISTRAR) ! '# $ , / ITAT, RAJKOT