The ITO, Ward-14(4), Ahmedabad V. Shri Mahesh Kantilal Jani, Baroda

ITA 1734/AHD/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1989 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: U S BHATI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 20/1/2011 DRAFTED ON: 24/1/2 011 ITA NO.1734/AHD/2009 ASSESSMENT YEAR : 2006-07 THE ITO WARD-14(4) AHMEDABAD VS. SHRI MAHESH KANTILAL JANI 762, VERAI PADA NI POLE GANDHI ROAD KHADIA 4 RASTA AHMEDABAD 380 001 PAN/GIR NO. : ABZPJ 6860 F ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI K.MADHUSUDAN, SR. D.R. RESPONDENT BY: SHRI U.S. BHATI O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XXI , AHMEDABAD DATED 27/01/2009 AND THE REVENUE HAS RAISED THE ON LY SUBSTANTIAL GROUND WHICH IS IN RESPECT OF AN ADDITION OF RS.7 LACS MAD E U/S.68 OF THE I.T.ACT. 2. AT THE OUTSET, THE LEARNED DEPARTMENTAL REPRESEN TATIVE MR.K.MADHUSUDAN HAS ALSO VEHEMENTLY PLEADED THAT TH E FIRST APPELLATE AUTHORITY HAS INFRINGED THE PROVISION OF RULE-46A O F THE IT RULES, 1962. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 31/1 2/2008 WERE THAT THE ITA NO. 173 4/AHD/2009 ITO VS. SHRI MAHESH KANTILAL JANI ASST.YEAR - 2006-07 - 2 - ASSESSEE IN HIS INDIVIDUAL CAPACITY IS A SALARIED P ERSON EMPLOYED WITH M/S. SUZLON ENERGY LTD. IT WAS FOUND THAT THE ASSE SSEE HAD MADE CERTAIN INVESTMENTS AND THE SOURCE OF THE SAID INVESTMENT W AS STATED TO BE FROM THE FAMILY MEMBERS, RELATIVES AND FRIENDS. THE AMO UNT IN QUESTION WAS RS.7 LACS FOR WHICH CERTAIN AFFIDAVITS HAVE BEEN FI LED. THOSE AFFIDAVITS WERE FOUND TO BE DEFECTIVE BY THE ASSESSING OFFICER AND, HENCE, THE IMPUGNED AMOUNT OF RS.7 LACS WAS TAXED IN THE HANDS OF THE ASSESSEE. 4. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY AND IT WAS EXPLAINED THAT THOSE AFFIDAVITS WERE FILED BY THE T AX CONSULTANT WITHOUT ASSESSEES KNOWLEDGE . IT WAS ALSO EXPLAINED THAT THE ASSESSEE DURING THAT PERIOD WAS SERVING WI TH M/S.SUZLON ENERGY LTD., VADODARA, HOWEVER, THE INCOME TAX MATT ER WAS HANDLED BY THE SAID CONSULTANT AT AHMEDABAD. THE L EARNED CIT(APPEALS) HAS ACCEPTED THAT PLEA AND AGREED WITH THE CONTENTION OF THE ASSESSEE THAT THE SAID TAX CONSULTANT DID NO T POSSESS TECHNICAL QUALIFICATIONS AND EVEN NOT TAKEN A REGISTRATION AS ON ITP FROM THE INCOME TAX DEPARTMENT. BY ASSIGNING THOSE REASONS, THE LEARNED CIT(APPEALS) HAS HELD THAT ASSESSMENT ORDER WAS WRO NGLY PASSED BY RELYING UPON CERTAIN FAKE DOCUMENTS WHICH WERE VOID AB INITIO. THEREAFTER, THE LEARNED CIT(APPEALS) HAS CONSIDERED CERTAIN OTHER EVIDENCES WHICH WERE PLACED FOR THE FIRST TIM E BEFORE HIM. THE ASSESSEE HAS EXPLAINED THAT BEING AN EMPLOYEE O F M/S.ZUZLON ENERGY LTD., HE WAS ENTITLED FOR A CONFIRMED ALLO TMENT SHARES IN EMPLOYEES QUOTA IN IPO OF THE COMPANY. THE ASSESSE ES FATHER AND ITA NO. 173 4/AHD/2009 ITO VS. SHRI MAHESH KANTILAL JANI ASST.YEAR - 2006-07 - 3 - FRIENDS WERE INTERESTED IN OBTAINING SUCH ALLOTMENT UNDER EMPLOYEES QUOTA. THEY HAVE GIVEN THE MONEY TO THE ASSESSEE TO APPLY FOR THE SHARES IN THE SAID IPO. THE ASSESSEE HAS FURNISHED A SUMMARY OF HIS BANK ACCOUNT. HE HAS ALSO FURNISHED THE DETAILS OF THE AMOUNTS RECEIVED FROM FRIENDS AND FATHER. CERT AIN CONFIRMATIONS TO THAT EFFECT HAVE ALSO BEEN FURNISHED. THE LEAR NED CIT(APPEALS) HAS TAKEN THE COGNIZANCE OF ALL THOSE EVIDENCES AND HELD AS UNDER: 3.1. I HAVE CONSIDERED THE ARGUMENTS PLACED BEFORE ME AND THE WRITTEN SUBMISSIONS OF THE COUNSEL AND FACTS OF THE CASE. I AM OF THE OPINION THAT A PERUSAL OF BANK SUMMARY FILED ALONG WITH WRITTEN SUBMISSIONS (IN WHICH AN APPLICATION FOR SUZLON I.P .O. TO THE TUNE OF RS.4,03,920/- IS REFLECTED), IT IS FOUND THAT THE A PPELLANT HAS SUFFICIENT CASH WITHDRAWAL TO DEPOSIT THE CASH. THE APPELLANT S FATHER HAS GIVEN HIM MONEY FOR APPLICATION UNDER THE EMPLOYEE-QUOTA SHARES OF SUZLON I.P.O. AND THE SAME HAS BEEN REPAID BY THE APPELLAN T TO HIS FATHER WITHIN THE SAME ASSESSMENT YEAR. THE OTHER TWO FRI ENDS HAVE GIVEN HIM MONEY FOR THE APPLICATION OF SUZLON I.P.O., HAS BEE N REWARDED BY SHARES/ACCOUNT PAYEE CHEQUES. THUS, THE SOURCE OF INVESTMENT IN SUZLON I.P.O. IS EXPLAINED IN THE BANK SUMMARY COUPLED WIT H CONFIRMATIONS FO FATHER, AND FRIENDS ALONGWITH SUPPORTING ETC. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT THE SOURCE OF THE SUZLON I.P.O. IS DULY EXPLAINED AND THE ASSESSING OFFICER IS DIRECTED TO DELETE ADDITION OF RS.7,00,000/- MADE IN THE ASSESSMENT OR DER. 5. WITH THIS BRIEF FACTUAL BACKGROUND, WE HAVE HEAR D BOTH THE SIDES. IT IS AN ADMITTED FACTUAL POSITION THAT THE LEARNED CIT(APPEALS) HAS ENTERTAINED CERTAIN NEW EVIDENCES AS WELL AS AN EXP LANATION WHICH WAS NOT BEFORE THE ASSESSING OFFICER. IT IS ALSO AN ADMITTED POSITION THAT BEFORE ADMITTING THOSE EVIDENCES OR THE NEW EX PLANATION, THE LEARNED CIT(APPEALS) HAS NOT GRANTED AN OPPORTUNITY TO THE REVENUE DEPARTMENT , NOR EVEN CALLED FOR ANY REMAND REPORT. IN TERMS OF RULE ITA NO. 173 4/AHD/2009 ITO VS. SHRI MAHESH KANTILAL JANI ASST.YEAR - 2006-07 - 4 - 46A(3), THE FIRST APPELLATE AUTHORITY SHALL NOT TAK E INTO ACCOUNT ANY EVIDENCE PRODUCED BEFORE HIM UNLESS THE ASSESSING O FFICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE EVI DENCE. WITH THIS RULE WAS CONFRONTED TO BOTH THE PARTIES DURING THE COURSE OF HEARING, IT WAS SUGGESTED THAT IN THE INTEREST OF JUSTICE, THE MATTER CAN BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER, SO THAT THE ASSESSING OFFICER CAN VERIFY THE CORRECTNESS OF THE EXPLANATION ON I NVESTIGATION AS PER LAW. ACCORDING TO US, THIS IS A FIT CASE FOR RESTORING I T BACK TO ASSESSING OFFICER FOR A FRESH ADJUDICATION BECAUSE THE EXPLAN ATION WHICH WAS TENDERED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS CHANGED AND A NEW EXPLANATION WAS SUBMITTED BEFORE THE LEARNED CIT(APPEALS) ALONG WITH NEW EVIDENCES WHICH OUGHT T O HAVE BEEN EXAMINED BY THE ASSESSING OFFICER. WE ORDER ACCOR DINGLY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 11/2/2011. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 11 /02/2011 T.C. NAIR, SR. PS