Shri Dhavalkumar Rajnikant Patel, Anand V. The Income Tax Officer, Ward-1, Anand

ITA 1592/AHD/2014

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5470 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DAVE
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence
• Section: 69

Judgement Text

, ,L ,L,L ,L- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD LKOZJH OLHE VGEN] YS[KK LNL; ,OA EK/KQFERK JKW;] LKOZJH OLHE VGEN] YS[KK LNL; ,OA EK/KQFERK JKW;] LKOZJH OLHE VGEN] YS[KK LNL; ,OA EK/KQFERK JKW;] LKOZJH OLHE VGEN] YS[KK LNL; ,OA EK/KQFERK JKW;] U; KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 1592/AHD/2014 ( / ASSESSMENT YEAR : 2009-10) DHAVALKUMAR RAJNIKANT PATEL, AZAD MAIDAN, KASUJI NI KHADKI, NANA ADADH, ANAND 388 001. / VS. ITO, WARD 1, ANAND. ./ ./ PAN/GIR NO. : ACTPP 0292 Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA, A.R. / RESPONDENT BY : SHRI S. K. DAVE, SR. D.R. / DATE OF HEARING 31/08/2018 ! / DATE OF PRONOUNCEMENT 01/11/2018 '# / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL)-IV, BARODA [CIT(A) IN SHORT] VIDE APPEAL NO.CAB/IV-A-32 3/2011-12 DATED 18.02.2014 ARISING IN THE MATTER OF ASSESSMENT ORDE R PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 29.11.2011 RELEVANT TO ASSESSMENT YEAR (AY) 2009-10. ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- 1.1 THE ORDER PASSED U/S.250 ON 18-02-2014 FOR A. Y.2009-10 BY CIT(A)-IV, BARODA UPHOLDING THE ADDITION OF RS.17,6 0,500/- AS UNEXPLAINED INVESTMENT IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO T HE IMPUGNED ADDITIONS. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AN D ON FACTS IN REJECTING THE ADDITIONAL EVIDENCE PRODUCED BY THE A PPELLANT THOUGH THE RELEVANT CONDITIONS PRESCRIBED UNDER RUL E-46A WERE FULFILLED. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE REJECTED THE ADDITI ONAL EVIDENCE PRODUCED BY THE APPELLANT THOUGH THE RELEVANT CONDI TIONS PRESCRIBED UNDER RULE-46A WERE FULFILLED. 2.3 THE LD.CIT(A) HAS FAILED TO APPRECIATE THA T WHEN THE PREDECESSOR IN OFFICE HAD CALLED FOR THE REMAND REP ORT FROM AO AND EVEN NO OBJECTION WAS TAKEN BY AO IN HIS REMAND REPORT, THE SAME COULD NOT BE REJECTED BY HIM, MUCH LESS WITHOU T GIVING ANY FURTHER OPPORTUNITY TO THE APPELLANT. 3.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW OR IN FACTS IN UPHOLDING THE ADDITION OF RS.17,60,500/- BEING CASH DEPOSITS IN BANK ACCOUNTS AS UNEXPLAINED INVESTMENT. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ADDITION OF RS.17,60,500/- BEING CASH DEPOSITS IN BANK ACCOUNTS AS UNEXPLAINED INVESTMENT. IT IS, THEREFORE, PRAYED THAT THE ADDITIONS UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 3. THE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN ALL THE GROUNDS OF APPEAL IS THAT LD. CIT(A) ERRED IN REJECTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE-46A AND CONFIRMING THE ADDITION OF RS.17,60,500/- AS UNEXPLAINED INVESTMENT. ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 3 - 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF REAL ESTA TE BROKER AND LAND DEVELOPMENT JOB ON SMALL SCALE BASIS. THE ASSESSEE IS CARRYING OUT ITS COMMERCIAL ACTIVITIES UNDER THE NAME AND STYLE AS SHREEJI LAND DEVELOPERS. THE ASSESSEE IN THE YEAR UNDER CONSIDE RATION HAS DEPOSITED CASH IN HIS DIFFERENT BANK ACCOUNTS AS SUMMARIZED U NDER: SR NO. NAME OF THE BANK CASH DEPOSIT 1. UCO BANK 12,60,500/- 2. BANK OF BARODA 5,00,000/- TOTAL 17,60,500/- 4.1 ON QUESTION BY THE AO ABOUT THE SOURCE OF CASH DEPOSIT IN THE AFORESAID BANKS, THE ASSESSEE FAILED TO MAKE ANY RE PLY. ACCORDINGLY, THE AO TREATED THE AMOUNT OF CASH DEPOSIT AS UNEXPLAINE D INVESTMENT U/S 69 OF THE ACT. THUS, THE SAME WAS ADDED TO THE TOTAL I NCOME OF THE ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. C IT(A) THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT HE HA S RECEIVED LOAN FROM HIS MOTHER IN CASH FOR RS. 5,00,000/- DATED 24.10. 2008. OUT OF SUCH LOAN, CASH WAS DEPOSITED IN HIS BANK OF BARODA ACCOUNT FO R RS. 4,00,000/- DATED 25.10.2008. 5.1 SIMILARLY, THE ASSESSEE HAS RECEIVED LOAN FROM MS. UJALA RAMESH PATEL FOR RS. 5,75,000/- DATED 17.12.2008 OUT OF WH ICH THE ASSESSEE HAS DEPOSITED A SUM OF RS.5,00,000/- IN CASH TO THE UCO BANK. ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 4 - 5.2 THE ASSESSEE FAILED TO FILE THE CONFIRMATION FO R THE LOANS TAKEN FROM THE AFORESAID PARTIES DUE TO THE FACT THAT THE AFORESAID PARTIES RESIDE IN FOREIGN COUNTRIES. THE ASSESSEE ALSO SUBMITTED T HAT THE AO WAS DULY INTIMATED ABOUT THE ARRIVAL OF MS. UJALA RAMESH PAT EL IN INDIA I.E. 15.12.2011. ACCORDINGLY, THE ASSESSEE REQUESTED THE AO TO WAIT TILL MS. UJALA RAMESH PATEL COMES TO INDIA. HOWEVER, THE AO WITHOUT CONSIDERING THE REQUEST OF THE ASSESSEE PASSED THE ORDER ON 29.11.2011 BY MAKING THE ADDITION TO THE TOTAL INCOME OF THE ASSE SSEE. 5.3 THE ASSESSEE IN SUPPORT OF HIS CLAIM SUBSEQUENT LY FILED THE CONFIRMATION FROM UJALA RAMESH PATEL ALONG WITH HER BANK STATEMENT. THE ASSESSEE ALSO FILED THE COPY OF THE PASSPORT OF MS. UJALA RAMESH PATEL AND BANK STATEMENT OF THE FOREIGN COUNTRY. TH E ASSESSEE ALSO FILED THE COPY OF THE PAN OF MS. UAJALA RAMESH PATEL. 5.4 THE ASSESSEE ALSO FILED THE AFFIDAVIT OF HIMSEL F FOR THE RECEIPT OF LOAN FROM SMT. UJALA RAMESH PATEL AS WELL AS THE AFFIDAVIT OF MS. UJALA RAMESH PATEL DATED 23.12.2011. 5.5 THE LD. CIT CALLED FOR THE REMAND REPORT ON THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. ACCORDINGLY, THE A O VIDE LETTER DATED 12.12.2013 HAS SUBMITTED THAT THE ASSESSEE HAS EXPL AINED THE SOURCE OF CASH TO THE TUNE OF RS. 7,01,000/- OUT OF TOTAL DEP OSIT OF CASH OF RS.17,60,500/-. THE ASSESSEE IN RESPONSE TO THE REM AND REPORT FILED AN AFFIDAVIT OF SMT. KUMUDBEN RAJNIKANT PATEL FROM WHO M THE ASSESSEE HAS ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 5 - RECEIVED LOAN OF RS. 5,00,000/-. HOWEVER, THE LD. C IT(A) REJECTED THE ADDITIONAL DOCUMENTS FILED BY THE ASSESSEE AND CONF IRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 4.3 I HAVE CONSIDERED THE FACTS OF THE CASE, AO'S OBSERVATIONS AND THE APPELLANT'S SUBMISSIONS. THE AO IN HIS ASSESSME NT ORDER HAS STATED THAT DESPITE BEING PROVIDED WITH THE OPPORTUNITIES OF BEING HEARD, THE APPELLANT DID NOT PROVIDE THE SOURCES OF CASH DEPOS ITED IN THE BANK ACCOUNT. BUT IN THE STATEMENT OF FACTS REPRODUCED A BOVE, THE APPELLANT HAS STATED THAT THE FACTS REGARDING RECEIPT OF SUCH AMOUNTS FROM PERSONS RESIDING ABROAD HAD BEEN FURNISHED TO THE AO BUT NO EVIDENCE IN THIS REGARD HAS BEEN SUBMITTED DURING THE COURSE OF APPE LLATE PROCEEDINGS NEITHER ANY SUBMISSION HAS BEEN MADE TO CONTROVERT THE FINDINGS GIVEN BY THE AO THAT DESPITE BEING ASKED FOR SPECIFICALLY , NO DETAILS OF SOURCES OF CASH DEPOSITED IN THE BANK ACCOUNT TOTALING RS. 17,60,500/- WAS PROVIDED TO THE AO BY THE APPELLANT. THUS, THE STAT EMENT MADE BY THE APPELLANT IN THE STATEMENT OF FACTS IS NOT CORRECT. 4.3.1 BESIDES, FROM THE RECORD, IT IS SEEN THAT NO EXPLANATION HAS BEEN FILED ALONG WITH THE COPIES OF AFFIDAVIT OF TWO PER SONS FILED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDING S EXPLAINING THE REASONS FOR NON SUBMISSION OF THE SAME BEFORE THE A O DURING THE ASSESSMENT PROCEEDINGS, NEITHER ANY APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES HAVE BEEN FILED. UNDER SUCH CI RCUMSTANCES, THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT ARE NOT ADMISSIBLE. BESIDES ALONG WITH THE REJOINDER TO THE REMAND REPORT THE A PPELLANT HAS FILED AN AFFIDAVIT FROM HIS MOTHER STATING THAT SHE HAD GIVE N RS. 5,00,000/-FROM HER SAVING AS WELL AS FUND RECEIVED FROM HER LATE H USBAND ETC. AGAIN NO APPLICATION FOR ADMISSION OF SUCH ADDITIONAL EVIDEN CES HAD BEEN MADE NEITHER ANY EXPLANATION HAD BEEN FILED AS TO WHY SU CH AFFIDAVIT FROM APPELLANT'S MOTHER IS BEING FILED AFTER MORE THAN 2 YEARS FROM THE DATE OF PASSING OF THE ASSESSMENT ORDER. ACCORDINGLY, TH E ADDITIONAL EVIDENCES SUBMITTED BY THE APPELLANT ARE REJECTED. 4.3.2 THE APPELLANT HAS MADE A FRESH CLAIM IN THE REJOINDER TO THE REMAND REPORT THAT OUT OF CASH DEPOSITS MADE IN THE BANK ACCOUNT, SOME DEPOSITS ARE ON ACCOUNT OF CASH WITHDRAWAL MADE FRO M THE BANK ON VARIOUS DATES. BUT AGAIN NO EXPLANATION AS TO WHY S UCH DETAILS WERE NOT FURNISHED BEFORE THE AO HAS BEEN FILED. ALSO AS TO WHY THE CASH WITHDRAWALS WERE KEPT WITH THE APPELLANT FOR BEING DEPOSITED LATER ON IN ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 6 - THE SAME BANK ACCOUNT HAS NOT BEEN EXPLAINED. UNDER SUCH CIRCUMSTANCES, THE ALTERNATE PLEA OF THE APPELLANT IS ALSO REJECTED. ACCORDINGLY THE ADDITION MADE BY THE AO IS UPHELD. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1-63 AND SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN REJE CTING THE ADDITIONAL EVIDENCES FILED DURING THE APPELLATE PROCEEDINGS. 6.1 THE LD. AR FURTHER SUBMITTED THAT THE LD. CIT(A ) DULY CALLED FOR THE REMAND REPORT ON THE ADDITIONAL EVIDENCES FILED BY HIM. 6.2 THE LD. CIT(A) HAS NOT CONSIDERED THE REMAND RE PORT WHEREIN, THE AO CONCEDED THAT THE ASSESSEE HAS EXPLAINED THE SOU RCE TUNE OF RS.7,01,000/-. 6.3 IN VIEW OF ABOVE, THE LD. AR REQUESTED TO REMAN D BACK MATTER TO THE LD. CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE TO THE PROVISION OF LAW. 7. ON THE OTHER HAND, LD. DR RAISED NO OBJECTION IF THE MATTER IS REMANDED BACK TO THE FILE OF LD. CIT(A) FOR FRESH A DJUDICATION IN ACCORDANCE TO THE PROVISION OF LAW. ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 7 - 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS BEYOND DOUBT THAT THE RE MAND REPORT WAS CALLED FOR BY THE LD. CIT(A). BUT SUBSEQUENTLY THE LD. CIT (A) REJECTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND ACCO RDINGLY DISREGARDED THE REMAND REPORT FILED BY THE AO. 8.1 WE ALSO NOTE THAT THE ASSESSEE HAS MADE A REQUE ST TO THE AO TO WAIT TILL MS. UJALA RAMESH PATEL WAS COMES TO INDIA FROM THE FOREIGN COUNTRY. THE ASSESSEE ALSO CLAIMED THAT THE TIME WA S AVAILABLE FOR PASSING THE ASSESSMENT ORDER. AS SUCH, THE ASSESSME NT WAS NOT GETTING TIME BARRED ON 12.11.2011. 8.2 CONSIDERING THE FACTS ON TOTALITY, WE ARE OF TH E VIEW THAT THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES AS HE HAS CALLED FOR THE REMAND REPORT. HAD THE LD. CIT(A) NOT ADMITTED THE ADDITIONAL DOCUMENTS FILED BY THE ASSESSEE THEN HE WOULD HAVE NOT CALLED FOR THE REMAND REPORT. THEREFORE IN THE INTEREST OF JUSTICE WE ARE INCLINED TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO FIL E THE ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A) IN THE PRESCRIBED F ORM. WE ALSO DIRECT THE LD. CIT(A) TO ADMIT THE FRESH EVIDENCE TO BE FI LED BY THE ASSESSEE AND ADJUDICATE THE MATTER AFRESH IN ACCORDANCE TO THE P ROVISION OF LAW AFTER CONSIDERING THE ADDITIONAL EVIDENCES. HENCE, THE GR OUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1592/AHD/2014 DHAVALKUMAR RAJNIKANT PATEL VS. ITO A .Y. 2009-10 - 8 - 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/11/2018 SD/- S D/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; (MADHUMITA ROY) (WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01/11/2018 PRITI YADAV, SR.PS !' #' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. % &' ( / CONCERNED CIT 4. ( () / THE CIT(A)-IV, BARODA. 5. +,- ..&' , &'! , 01'%' / DR, ITAT, AHMEDABAD. 6. -23 4 / GUARD FILE. $ % / BY ORDER, + . //TRUE COPY// &/% () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD