Smt.K.V.Nagamani, Hassan V. Income Tax Officer, Hassan

ITA 174/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5368 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R V SREENIVASAN JT
• Assessee Lawyers: A SHANKAR
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.174/BANG/2017 ASSESSMENT YEAR : 2008-09 SMT K.V. NAGAMANI, PROPRIETRIX: SREE DEVI SERVICE CENTER, ARKALGUD, HASSAN DISTRICT. PAN: AAOPN 9012B VS. THE INCOME TAX OFFICER, WARD 2, HASSAN. APPELLANT RESPONDENT APPELLANT BY : SHRI A. SHANKAR, ADVOCATE RESPONDENT BY : SHRI A.R.V. SREENIVASAN, JT.CIT(DR)(ITAT) DATE OF HEARING : 02.03.2017 DATE OF PRONOUNCEMENT : 19.05.2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS) PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. A. THE LEARNED LOWER AUTHORITIES OUGHT TO HAVE PROVIDE D AN OPPORTUNITY OF CROSS- EXAMINING SRI. APPANE GOWDA ON WHOSE STATEMENT ADDITION WAS MADE IN THE ITA NO.174/BANG/2017 PAGE 2 OF 5 HANDS OF THE APPELLANT ON THE FACTS AND CIRCUMSTANC ES OF THE CASE. 3. CONSENT CANNOT CONFER JURISDICTION. A. THE LEARNED LOWER AUTHORITIES ERRED IN ACCEPTING TH E ADMISSION MADE BY THE APPELLANT ERRONEOUSLY ON DISALLOWANCE IN THE CASE OF SRI. MAHENDRA TO THE EX TENT OF RS.3,99,750/- WHICH IS NOT CORRECT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. ADDITION OF RS.6,65,270/- AS UNEXPLAINED CASH CRE DITS U/S. 68 OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. A. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITIO N OF RS.6,65,270/- AS UNEXPLAINED CASH CREDITS U/S. 6 8 OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. B. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED HER PRIMARY ONUS AS REGARDS TO THE NATURE AND SOURCE OF THE CREDIT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. C. THE LEARNED LOWER AUTHORITIES ERRED IN RELYING ON THE STATEMENT TAKEN ON OATH FROM A THIRD PARTY SRI. APPANE GOWDA AND CONFIRMING A DISALLOWANCE OF RS.2,65,521 / - ON THE FACTS AND CIRCUMSTANCES OF THE CASE. D. THE LEARNED LOWER AUTHORITIES ERRED IN NOT APPRECIATING THE CONFIRMATION LETTER IN THE CASE OF SRI. MAHENDRA, FURNISHED BY THE APPELLANT IN DISCHARGING HER PRIMARY ONUS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. E. THE LEARNED LOWER AUTHORITIES ARE NOT JUSTIFIED IN STEPPING IN THE SHOES OF A BUSINESSMAN AND THEREBY MAKING A DISALLOWANCE ON PURE ASSUMPTION AND SURMISES ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.174/BANG/2017 PAGE 3 OF 5 F. THE LEARNED ASSESSING AUTHORITY ERRED IN NOT APPRECIATING THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT ARE CORRECT TO HER AND THAT THE DISALLOWANCES ARE NOT WARRANTED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN LAW IN CHARGING THE INTEREST UNDER SECTION 2348 OF THE ACT AND FURTHER THE CALCULATION OF INTEREST UNDER SECTION 2 348 OF THE ACT IS NOT IN ACCORDANCE WITH LAW SINCE THE RATE, M ETHOD OF CALCULATION, QUANTUM IS NOT DISCERNABLE FROM THE OR DER OF ASSESSMENT ON THE FACTS AND CIRCUMSTANCE OF THE CAS E. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTIT UTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED AB OVE. 7. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DU RING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO THE ADDITION MADE U/S. 68 OF THE ACT IN RESPECT OF CASH CREDIT O F RS.3,99,750 IN THE NAME OF SHRI MAHENDRA AND RS.2,65,521 IN THE NAME OF SHR I APPANE GOWDA. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE HAS S UBMITTED THAT BEFORE THE AO ASSESSEE HAS FILED THE RELEVANT EVIDENCE IN ORDE R TO ESTABLISH THAT THESE CREDITS WERE GENUINE, BUT THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HE TREATED THESE CASH CREDITS AS UNEXP LAINED AND MADE THE ADDITION OF THE SAME. THE CIT(APPEALS) DID NOT EX AMINE THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE AO, BUT HE CONFIRMED THE ADDITIONS HAVING RECORDED THAT VARIOUS OPPORTUNITIES WERE AFFORDED T O THE ASSESSEE. ITA NO.174/BANG/2017 PAGE 4 OF 5 3. AGGRIEVED, THE ASSESSEE IS BEFORE THE TRIBUNAL W ITH THE SUBMISSION THAT THE CIT(APPEALS) HAS NOT AFFORDED PROPER OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. THE CIT(A) HAS ALSO NOT EXAMINED THE RELEVANT EVIDENCE PLACED BEFORE THE AO. HE HAS RELIED UPON THE ASSES SMENT ORDER AND CONFIRMED THE ADDITIONS. THE LD. COUNSEL FOR THE A SSESSEE HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER AND ALSO THE RECT IFICATION ORDER. 4. THE LD. DR, ON THE OTHER HAND, HAS PLACED RELIAN CE UPON THE ORDER OF THE CIT(APPEALS). 5. HAVING CAREFULLY EXAMINED THE ORDER OF LOWER AUT HORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT BEFORE THE AO, AS SESSEE HAS NOT FILED COMPLETE EVIDENCE TO ESTABLISH THE GENUINENESS OF T HE CREDITS. BEFORE THE CIT(APPEALS), NONE APPEARED ON BEHALF OF ASSESSEE. THOUGH CIT(A) HAS AFFORDED VARIOUS OPPORTUNITIES, BUT HE HAS NOT DISC USSED THE EVIDENCE OF SERVICE OF NOTICE OF HEARING UPON THE ASSESSEE. ON A CAREFUL PERUSAL OF THE CIT(A)S ORDER, I FIND THAT THE CIT(A) HAS RELIED U PON THE ASSESSMENT ORDER WHILE CONFIRMING THE ADDITIONS WITHOUT MAKING INDEP ENDENT ENQUIRY OR EXAMINING THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE AO. IN THESE CIRCUMSTANCES, I AM OF THE VIEW THAT ONE MORE OPPOR TUNITY SHOULD BE AFFORDED TO THE ASSESSEE TO EXPLAIN THE GENUINENESS OF CREDITS. ACCORDINGLY, I SET ASIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IF NEE D BE, CIT(APPEALS) MAY ITA NO.174/BANG/2017 PAGE 5 OF 5 CALL FOR A REMAND REPORT FROM THE AO WITH REGARD TO ANY ADDITIONAL EVIDENCE FILED BEFORE HIM. ACCORDINGLY, THE ORDER OF THE CI T(APPEALS) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF CIT(APPEA LS) FOR READJUDICATION OF THE ISSUE AFRESH. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF MAY, 2017. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 19 TH MAY, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.