SHRI SUSHIL GUPTA, MUMBAI V. INCOME TAX OFFICER WARD-17(3)(4), MUMBAI

ITA 1669/MUM/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8062 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Keywords: Bogus purchase; Unexplained expenditure; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 147

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI MAHAVIR SINGH, VICE- PRESIDENT AND SHRI M. BALAGANESH , ACCOUNTANT MEMBER ITA NO.1669/MUM/2018 (ASSESSMENT YEAR 2010-11) SHRI SUSHIL GUPTA, SHOP NO.6-A, 51, NARAYAN DHURU STREET, MUMBAI- 400003 P AN: AHDPG9628C VS. ITO, WARD-17(3)(4) ROOM NO. 477, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. APPELLANT RESPONDENT APPELLANT BY : MS. DINKLE HARIA (AR) REVENUE BY : SHRI T. S. KHALSA (SR. DR) DATE OF HEARING : 18.11.2020 DATE OF PRONOUNCEMEN T : 11.01.2021 ORDER PER MAHAVIR SINGH, VP; 1. THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-28, MUMBAI [FOR SHORT THE LD. CIT(A)] IN APPEAL NO.CIT(A)-28/IT-890/ITO-17(3)(4)/2015-16 ORDER DATE D 16.03.2017. ASSESSMENT WAS FRAMED BY ITO WARD-17(3)(4), MUMBAI FOR THE ASSESSMENT YEAR 2010-11 UNDER SECTION 143(3) READ W ITH SEC. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) VIDE H IS ORDER DATED 02.02.2016. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STA TED THAT THE ORDER OF CIT(A) IS EX-PARTE AND A NON-SPEAKING ORDER. SHE STATED TH AT SPECIFIC GROUND HAS BEEN RAISED BY ASSESSEE QUA I.E. GROUND NO. 2 & 3 W HICH IS AS UNDER: ITA NO. 1669 MUM 2018-SHRI SUSHIL GUPTA 2 WITHOUT PREJUDICE TO THE ABOVE 2. NATURAL JUSTICE 2.1 THE LD. CIT (A) ERRED IN DISMISSING THE APPEAL OF THE APPELLANT IN BREACH OF THE PRINCIPLES OF NATURAL JUSTICE. 2.2 WHILE DOING SO, THE LD. CIT (A) ERRED IN NOT GR ANTING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT AS WELL AS PASSING THE ORDER IN A VERY CRYPTIC WAY, WITHOUT APPLICATION OF MIND AND WITHOUT DEALING WIT H VARIOUS GROUNDS AND SUBMISSIONS. 2.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE, AND IN LAW, THE ORDER BE HELD AS BAD IN LAW. WITHOUT FURTHER PREJUDICE TO THE ABOVE 3. PASSING OF EX - PARTE ORDER 3.1 THE LD. CIT (A) ERRED IN PASSING THE APPELLATE ORDER AS EX - PARTE. 3.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE, AND IN LAW, NO SUCH ACTION WAS CALLED FOR. 3. WE FIND FROM THE GROUNDS RAISED BY THE ASSESSEE ARE UNEXPLAINED EXPENDITURE ON ACCOUNT OF BOGUS PURCHASES AND ADDIT ION UNDER SECTION 41(1) AND 28(IV) OF THE ACT. THE CIT(A) JUST SIMPLY CONFI RMED THE ADDITION IN PARA-3.3 AND PART OF PARA-4 AS UNDER: 3.3. I FIND THAT THE APPELLANT FAILED TO PROVE TO ANY CONVINCING EXTENT, THE GENUINENESS OF PURCHASES. THE AO HAS FOLLOWED CASE AUTHORITIES FROM MUMBAI TRIBUNAL AND HIGH COURT TO BUTTRESS HIS CONCLUSION. I ALSO HOLD THAT ONUS CAST ON APPELLANT IN TERMS OF SEC.101 AND 106 OF INDIAN EVIDENCE ACT, 1982 REMAINS TO BE DISCHARGED. THE ADDITION IS ACCORDINGLY CONFI RMED AND GROUND IS REJECTED. 4. THE METHOD OF ACCOUNTING CANNOT INVENT FACT OR RESTRICT THE AMBIT OF TAXATION. THE ADDITION IS ACCORDINGLY CONFIRMED AND THE GROUN D IS REJECTED. THE ADDITION IS CONFIRMED AND GROUND IS REJECTED. 4. FROM THE ABOVE, IT IS SEEN THAT THE ORDER OF CIT(A) IS A NON-SPEAKING ORDER AND EX-PARTE WITHOUT PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 1669 MUM 2018-SHRI SUSHIL GUPTA 3 WHEN THIS FACT WAS CONFRONTED TO SR. DR, HE CLEARLY CONCEDED THE POSITION AND STATED THAT MATTER CAN BE SET-ASIDE TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION. IN VIEW OF THIS, WE SET-ASIDE THE ORD ER OF CIT(A) AND REMAND THE MATTER BACK TO HIS FILE FOR FRESH ADJUDICATION. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY 2021. SD/- SD/- M.BALAGANESH MAHAVIR SINGH ACCOUNTANT MEMBER VICE-PRESIDENT MUMBAI, DATE: 11.01.2021 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST . REGISTRAR ITAT , MUMBAI