Nitin V. Sharma, Pune V. A O., and T.R.O.,

ITA 1827/PUN/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2647 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PN SHRI NI; ANN KAPTHUAMA ITA NO S
• Keywords: Gift; Salary income; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 1818 /PN/201 3 / ASSESSMENT YEAR: 200 9 - 1 0 THE TAX RECOVERY OFFICER & ASSESSING OFFICER, RANGE - 7, PUNE . / APPELLANT VS. SHRI NITIN V. SHARMA, 7/CIT(A), B - HOUSING SOCIETY, TINGRE NAGAR, PUNE AIRPORT, PU NE - 411015 . / RESPONDENT PAN: BPCPS2017H PAN: BPCPS2017H . / ITA NO. 1 827 /PN/201 3 / ASSESSMENT YEAR: 2009 - 10 SHRI NITIN V. SHARMA, 7/CIT(A), B - HOUSING SOCIETY, TINGRE NAGAR, PUNE AIRPORT, PUNE 411015 . / A PPELLANT PAN: BPCPS2017H VS. THE TAX RECOVERY OFFICER & ASSESSING OFFICER, RANGE - 7, PUNE . / RESPONDENT ASSESSEE BY : S /S HRI PRAYAG JHA & PRATEEK JHA DEPARTMENT BY : MS. ANN KAPTHUAMA ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 2 / DATE OF HEARING : 09 . 0 2 .201 6 / DATE OF PRONOUNCEMENT: 04 .0 3 .201 6 / ORDER PER SUSHMA CHOWLA, J M : THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE ARE AGAINST THE ORDER OF CIT ( A ) - I II , PUNE , DATED 3 0 .0 1 .201 3 REL ATING TO ASSESSME NT YEAR 200 9 - 1 0 ORDER OF CIT ( A ) - I II , PUNE , DATED 3 0 .0 1 .201 3 REL ATING TO ASSESSME NT YEAR 200 9 - 1 0 PASSED UNDER SECTION 143 (3 ) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 3. THE REVENUE IN ITA NO. 1818 /PN/201 3 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.19,50,000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CAS H DEPOSITS OF THE ASSESSEE IN BANK OF MAHARASHTRA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THIS ADDITION ON THE BASIS OF ADDITIONAL EVIDENCE WITHOUT RECORDING ANY REASONS FOR THE ADMISSION OF THE SAME AS PER RULE 46A(2) OF THE INCOME - TAX RULES, 1962 AND WITHOUT SPECIFYING THE CIRCUMSTANCES OF THE INCOME - TAX RULES, 1962 AND WITHOUT SPECIFYING THE CIRCUMSTANCES AS PER RULE 46A(1) UNDER WHICH THE SAME WAS ADMISSIBLE. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD OR DISPOS ED OFF. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE THAT OF THE A.O. BE RESTORED. 4. THE ASSESSEE IN ITA NO. 1 827 /PN/201 3 HAS RAISED THE FOLLOWING CONCISE GROUNDS OF APPEAL : - ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 3 1. THE LEARNED CIT(A) WAS NOT JUSTIFIE D IN SUSTAINING THE ADDITION OF RS.40,76,600/ - WITHOUT APPRECIATING THAT THE ADDITION MADE U/S 68 BASED ON BANK STATEMENTS WAS BAD IN LAW LIABLE TO BE DELETED. 2. THE LEARNED CIT(A) GROSSLY ERRED IN SUSTAINING ADDITION BASED ENTIRELY ON PRESUMPTIONS AND S URMISES. 3. THE LEARNED CIT(A) WAS UNJUSTIFIED IN NOT APPRECIATING THAT THE LD ASSESSING OFFICER HAD MADE ADDITION WITHOUT CONSIDERING THE DOCUMENTARY EVIDENCES SUBMITTED BEFORE HER AND WITHOUT ALLOWING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD T HUS VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. 4. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL OR TO ADD NEW GROUNDS OF APPEAL DURING THE COURSE OF APPEAL PROCEEDINGS. 5. THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE ARE IN RELATION TO ADDITION MADE ON ACCOUNT OF CASH CREDIT UNDER SECTION 68 OF THE ACT MADE BY THE ASSESSING OFFICER AND PARTLY CONFIRMED BY THE CIT(A). 6. BOTH THE REVENUE A ND THE ASSESSEE ARE IN APPEAL AGAINST THE ORDER OF CIT(A) AND WE PROCEED TO DECIDE BOTH APPEALS AFTER HEARING THE LEARNED AUTHORIZED REPRESENTATIVES . 7. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING O FFICER NOTED THAT THE ASSESSEE WAS A SALARIED PERSON AND HAD DERIVED INCOME FROM SALARY FROM FCM SOLUTIONS INDIA PVT. LTD. FROM THE PERUSAL OF THE BANK ACCOUNT WITH THE ABN AMRO BANK , THE ASSESSING OFFICER NOTED THAT SUM OF RS.29,39,000/ - WAS DEPOSITED BY THE ASSESSEE. FURTHER, SUM OF RS.26,42,000/ - WAS DEPOSITED IN SAVINGS ACCOUNT WITH BANK OF MAHARASHTRA DURING THE YEAR. THE ASSESSEE TRIED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT S . THE ASSESSEE EXPLAINED THAT BESIDES SALARY, HE HAD AL SO EARNED SOME INCOME FROM FOREIGN CURRENCY TRANSACTIONS AS WELL AS ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 4 INCOME BY WAY OF COMMISSION IN RESPECT OF INVESTMENT S BROUGHT BY HIM IN AURUM REALTY LTD. AND SH R EE OM SAINATH CAR ON RENT PVT. LTD. THE ASSESSEE ALSO EXPLAINED THAT CERTAIN AMOUNT WAS REC EIVED BY HIM ON CONVERSION OF US DOLLARS AND THE SAID AMOUNT WAS DEPOSITED IN BANK OF MAHARASHTRA. FURTHER, IN RESPECT OF CASH DEPOSITS IN ABN AMRO BANK, IT WAS CLAIMED THAT HE HAD RECEIVED THE AMOUNT FROM HIS FATHER MR. VED PRAKASH SHARMA ON 28.05.2008 O F RS.2 LAKHS. FURTHER, HE CLAIMED TO HAVE RECEIVED CASH FROM MS. SANGITA SHARMA FOR INVESTING IN AURUM REALTY LTD. OF RS.1,25,000/ - AND SIMILARLY, ANOTHER CASH AMOUNT OF RS.6,20,000/ - WAS RECEIVED FROM MS. SANGITA SHARMA ON 20.12.2008 . THE ASSESSEE ALSO EXPLAINED THE CASH RECEIVED FROM VARIOUS INVEST ORS OF SHREE OM SAINATH CAR ON RENT PVT. LTD. THE TABULATED DETAILS OF SOURCES OF CASH DEPOSIT IN TWO BANK ACCOUNTS IS FURNISHED UNDER PARA 7 AT PAGES 4 AND 5 OF THE ASSESSMENT ORDER. BEFORE THE ASSESSING OF FICER, THE ASSESSEE FURNISHED THE IDENTITY OF THE PARTIES BY FILING CONFIRMATION AND BY GIVING PAN NUMBERS. SINCE THE ASSESSEE HAD FAILED TO PRODUCE THE COPY OF BANK ACCOUNTS OR COPY OF R ETURN OF THE INDIVIDUAL PERSONS, THE ASSESSING OFFICER WAS OF THE VI EW THAT THE GENUINENESS OF THE CREDITORS AND THEIR CAPACITY TO ADVANCE THE SAID AMOUNT WAS NOT PROVED. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE EXPLANATION FILED BY THE ASSESSEE AS SOURCE OF DEPOSIT OF CASH WAS ONLY MAKE BELIE VE STORY AND IN THE ABSENCE OF ANY STRONG EVIDENCE, THE GENUINENESS , CAPACITY AND CREDITWORTHINESS OF THE PERSONS, THE ASSESSING OFFICER REJECTED THE EXPLANATION FILED BY THE ASSESSEE. CONSEQUENTLY, SUM OF RS. 29,39,500/ - DEPOSITED IN THE ABN AMRO BANK WAS TREATED AS DEPOSITS OUT OF INCOME FROM UNEXPLAINED SOURCES UNDER SECTION 68 OF THE ACT. SIMILARLY, THE CASH DEPOSITED IN THE JOINT BANK ACCOUNT IN THE NAME S OF ASSESSEE AND MS. MICHELLE PETER TOLSTER WITH BANK OF MAHARASHTRA AMOUNTING TO RS.31,01,100/ - WAS ALSO TREATED AS U NEXPLAINED INCOME UNDER SECTION 68 OF THE ACT. ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 5 8. BEFORE THE CIT(A), THE ASSESSEE FURNISHED SIMI LAR EXPLANATION ALONG WITH SOME DOCUMENTARY EVIDENCE , WERE FILED AND THE SAID DOCUMENTS FURNISHED BY THE ASSESSEE IN THE PAPER BOOK WERE FORWARDED TO THE ASSESS ING OFFICER FOR COMMENTS WITH REGARD TO ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) . THE ASSESSING OFFICER IN REPLY, OPPOSED THE ADMISSION OF DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE SUPPORTIN G THE CLAIM OF RECEIPT OF COMPENSATION TOWARDS LAND ACQUISITION AND PROOF EVIDENCING CASH WITHDRAWAL BY MR. VED PRAKASH SHARMA, FATHER OF THE ASSESSEE , AS ADDITIONAL EVIDENCE. THE ASSESSING OFFICER IN THE REMAND REPORT REJECTED THE SAID EVIDENCE AS THESE WERE NOT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CIT(A) REJECTED THE EXPLANATION OF THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. WITH REGARD TO THE SOURCES OF CASH DEPOSIT IN THE SAVING ACCOUNT WITH BANK OF MAHARASHT RA ALSO, FURTHER EVIDENCES WERE FILED BY THE ASSESSEE BEFORE THE CIT(A) WHICH WERE ACCEPTED PARTLY AND DEPOSIT OF RS. 19,64,500/ - I.E. RS. 19,50,000/ - + RS.14,500/ - WAS ACCEPTED AND THE BALANCE WAS UPHELD. THUS, OUT OF TOTAL ADDITION OF RS.60,41,100/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT , THE ADDITION TO THE EXTENT OF RS. 40,76,600/ - WAS SUSTAINED AND THE ADDITION OF RS. 19,64,500/ - WAS DELETED. 9. THE ASSESSEE IS IN APPEAL AGAINST THE SUSTENANCE OF ADDITION OF RS.40,76,600/ - U NDER SECTION 68 OF THE ACT. THE ASSESSEE IS AGGRIEVED BY THE AFORESAID ADDITION UNDER SECTION 68 OF THE ACT BASED ON BANK STATEMENT WHICH AS PER THE ASSESSEE, WAS BAD IN LAW. FURTHER, THE GRIEVANCE OF THE ASSESSEE IS THAT THE SAID ADDITION WAS MADE WITHO UT CONSIDERING THE DOCUMENTARY EVIDENCE SUBMITTED BEFORE THE ASSESSING OFFICER AND WITHOUT ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AND THUS, VIOLAT ED THE PRINCIPLES OF NATURAL ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 6 JUSTICE. FURTHER, THE ASSESSEE BEFORE US HAS FILED AN APP LICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WITH REGARD TO THE AMOUNTS RECEIVED IN CASH FROM HIS FATHER TO THE EXTENT OF RS.12,75,000/ - AS GIFT AND FURTHER RS. 7,25,000/ - RECEIVED FROM MS. SANGITA SHARMA TO BE INVESTED WITH AURUM REALTY LTD. THE CLAIM OF THE ASSESSEE BEFORE US IS THAT THE CONFIRMATION LETTERS FROM BOTH THESE PERSONS WERE SUBMITTED. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT FURTHER EVIDENCE AND ALSO DID NOT ALLOW REASONABLE OPPORTUNITY TO SUBMIT FURTHER EVIDENCE IN THIS REGARD. FURTH ER, AFFIDAVIT S OF BOTH THE PARTIES WERE ALSO FILED WITH A REQUEST TO ADMIT THE SAME UNDER RULE 29 OF THE RULES. OUR ATTENTION WAS DRAWN TO THE PROCEEDINGS BEFORE THE ASSESSING OFFICER BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND IT WAS PO INTED OUT THAT THE CONFIRMATION ALONG WITH SUPPORTING DOCUMENTS IN RESPECT OF CASH DEPOSITS IN THE BANK ACCOUNTS ARE AVAILABLE WITH THE ASSESSEE, WHICH HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. IT WAS POINTED OUT THAT DURING THE ASSESSMENT PROCEED INGS TOTAL QUERIES WERE IN RESPECT OF DEPOSITS IN ABN AMRO BANK AND IN RESPECT OF BANK OF MAHARASHTRA, THE FIRST QUERY WAS RAISED ON 27.12.2011 . HE FURTHER DREW OUR ATTENTION TO THE FACT THAT HIS FATHER WAS WORKING WITH AIR FORCE AND LAND WAS ACQUIRED BY THE COLLECTOR AND THE AMOUNT WAS RECEIVED BY HIM, WHICH WAS THEREAFTER GIVEN TO THE ASSESSEE. IN RESPECT OF OTHER DEPOSITS ALSO, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE TOOK US THROUGH THE GAMUT OF EVIDENCES AVAILABLE IN THE PAPER BOOK. FU RTHER, IN RESPECT OF DEPOSITS IN ABN AMRO BANK, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO VARIOUS DOCUMENTS AND EVIDENCES AVAILABLE. THE ASSESSEE ALSO FILED TABULATED DETAILS OF THE EXPLANATION OF SOURCES OF CASH DEPOSITS IN BOTH BANK ACCOUNTS, WHICH ARE PLACED ON RECORD. THE CASE OF THE ASSESSEE BEFORE US WAS THAT IN THE ABSENCE OF SUFFICIENT OPPORTUNITY BEING NOT ALLOWED BY THE ASSESSING OFFICER, THE AFORESAID ADDITION WAS MADE IN THE HANDS OF ASSESSEE. ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 7 10. THE REVENUE IS IN AP PEAL AGAINST THE DELETION OF ADDITION TO THE TUNE OF RS.19,50,000/ - ON THE SURMISE THAT THE ADDITIONAL EVIDENCE HAS BEEN CONSIDERED BY THE CIT(A) WITHOUT CONFORMING TO THE PROVISIONS OF RULE 46A OF THE RULES. 11. WE HAVE HEARD THE RIVAL CON TENTIONS AND PE RUSED THE RECORD AND ALSO THE EVIDENCES FILED BY THE ASSESSEE IN THE PAPER BOOK AND ALSO BEFORE THE CIT(A). THE ASSESSEE BEFORE US IS AGGRIEVED BY THE ORDERS OF AUTHORITIES BELOW IN NOT ALLOWING SUFFICIENT OPPORTUNITY TO PRODUCE THE EVIDENCE AND ALSO BY N ON - APPRECIATION OF EVIDENCES FILED BY HIM FROM DATE TO DATE. THE PERUSAL OF TABULATED DETAILS FILED BY THE ASSESSEE REFLECTED THAT MANY OF AMOUNTS HAVE BEEN RECEIVED FROM HIS FATHER AND OTHER A MOUNTS WHICH ARE DEPOSITED IN CASH IN BANK OF MAHARASHTRA ARE ON ACCOUNT OF INVESTMENT TO BE MADE IN SHREE OM SAINATH CAR ON RENT PVT. LTD. ONCE THE ASSESSEE HAS GIVEN AN EXPLANATION THAT HE WAS RECEIVING THESE AMOUNTS AND FURTHER MADE INVESTMENTS, THEN THE ASSESSING OFFICER SHOULD HAVE MADE ENQUIRIES FROM THE OTHER PARTIES TO VERIFY THE CLAIM OF THE ASSESSEE . HOWEVER, WE FIND THAT THE EXPLANATION OF THE ASSESSEE HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER IN PROPER PERSPECTIVE NOR PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO FURNISH COMPLETE EVIDENCES. FUR THER CLAIM OF ASSESSEE TO HAVE RECEIVED THE AMOUNTS FROM HIS FATHER HAVE ALSO BEEN NOT ACCEPTED, INSPITE OF VARIOUS EVIDENCES FILED. I N THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE ASSESSEE BEFORE US HAS FURNISHED SEVERAL DOCUMENTS / EVID ENCES, WE ARE OF THE VIEW THAT THE PRINCIPLES OF NATURAL JUSTICE DEMAND THAT AN OPPORTUNITY OF HEARING SHOULD BE ALLOWED TO THE ASSESSEE. ACCORDINGLY, WE SET - ASIDE THE MATTER TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO AFTER CONSIDER ING T HE EVIDENCES AVAILABLE WITH THE ASSESSEE AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, THE ITA NO S. 1818 & 1 827 /PN/201 3 SHRI NITIN V. SHARMA 8 GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 12 . IN THE RESULT, BOTH THE APPEALS OF REVENUE AND THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED ON THIS 4 TH DAY OF MARCH , 2016 SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 4 TH MARCH , 2016 GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - I I I, PUNE; 4. / THE CIT I V , PUNE; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE C OPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE