Shri Kailas Anilbhai Mecwan, Ahmedabad V. The ITO, Ward-7(1)(5), Ahmedabad

ITA 1831/AHD/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7798 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 09-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.S. SHUKLA
• Keywords: Unexplained investment; Opportunity of being heard; Source of fund; Additional evidence; Question of law; Right to appeal; Set aside
• Section: 143(2); 13; 20

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , SM C BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO. 1831/AHD/2019 / ASSTT. YEAR: 2016 - 2017 KAILAS ANIL MECWAN , B/21, HIRABAUG SOCIETY , B/H ANUPAM SOCIETY , CTM CRO SS ROAD , MANINAGAR, AHMEDABAD . PAN : ACZPM2362G VS. I.T.O , WARD - 7(1)(5 ) , AHMEDABAD. (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI DIVYANG J. SHAH , A.R REVENUE BY : SHRI S.S. SHUKLA, SR. D R / DATE OF HEARING : 20 / 01 / 2021 / DATE OF PRONOUNCEMENT: 23 / 03 /2021 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE A GAINST THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) - 7 , AHMEDABAD , DATED 30/09/2019 ARISING IN THE MATTER OF ASSESSM ENT ORDER PASSED UNDER S.144 O F THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASSESSMENT YEAR 2016 - 20 17 . ITA NO.1831/AHD/2019 ASSTT. YEAR 2016 - 17 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.90,000/ - FURTHER, APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ALL OR ANY GROUND OF APPEAL. 3. THE ASSESSEE HAS ALSO RAISED THE ADDITIONAL GROUND OF APPEAL VIDE LETTER DATED 18/08/ 2020 WHICH IS REPRODUCED AS UNDER: WHETHER, ON FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, LD.AO HAS ERRED IN MAKING UNDERLYING ADDITION WITHOUT CONVERTING THE LIMITED INTO COMPLETE SCRUTINY ? 4. THE LEARNED AR FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE VIDE LETTER DATED 18 - 08 - 2020 GOES TO THE ROOT OF THE MATTER AND ALL THE FACTS RELATED TO THE ADDITIONAL GROUND ARE AVAILABLE IN THE ORDER OF THE AUT HORITIES BELOW. THEREFORE THE SAME NEEDS TO BE ADMITTED IN VIEW OF THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF NTPC LTD. REPORTED IN 229 ITR 383 WHERE IT WAS HELD AS UNDER: UNDER SECTION 254, THE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES T O THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WIDEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF, FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON - TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCT ION IS DENIED, THERE IS NO REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF THAT ITEM. THERE IS NO REASON TO RESTRICT THE POWER OF THE T RIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE COMMISSIONER (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS OBJECTIONS BEFORE THE TRIBUNAL. THERE IS NO REASON WHY THE. TRIB UNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER (APPEALS) TAKES TOO NARROW A V IEW OF THE POWERS OF THE TRIBUNAL. UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE A SSESSMENT PROCEEDINGS THERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. ITA NO.1831/AHD/2019 ASSTT. YEAR 2016 - 17 3 IN THE INSTANT CASE, THEREFORE, THE TRIBUNAL HAD J URISDICTION TO EXAMINE A QUESTION OF LAW WHICH AROSE FROM THE FACTS AS FOUND BY THE LOWER AUTHORITIES AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. 5. ON THE OTHER HAND THE LEARNED DR DID NOT RAISE ANY OBJECTION ON THE ADMISSION OF THE ADDITI ONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. 6. HEARD THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS LEGAL IN NATURE AND THEREFORE THE SAME CAN BE RAISED AT ANY STAGE I N PURSUANCE TO THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF NTPC LTD (SUPRA). 6.1 HENCE WE ADMIT THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AND PROCEED TO ADJUDICATE THE SAME. 7. THE ONLY ISSUE RAISED BY THE ASSESSEE IN HER GROUN DS AND ADDITIONAL GROUND IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION IN PART AMOUNTING TO 90,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT. 8. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL. THE CASE OF THE ASSESSEE WAS SELECTED UNDER LIMITED SCRUTINY THROUGH CASS MODULE FOR EXAMINATION OF INVESTMENTS MADE IN SECURITIES AND INCOME EARNED THEREON WHETHER THESE WERE D ULY DISCLOSED OR NOT. IN THIS CONNECTION THE AO PERUSED THE INVESTMENTS MADE BY THE ASSESSEE IN THE SECURITIES BY OBTAINING THE NECESSARY DETAILS FROM THE SHARE BROKERS. ON PERUSAL OF THE LEDGER FURNISHED BY THE SHARE BROKER, THE AO FOUND THAT THE CERTAIN AMOUNTS AGGREGATING TO 4,59,771/ - PAID TO BROKER WAS NOT REFLECTING IN THE BANK STATEMENT OF THE ASSESSEE. ACCORDINGLY, THE AO TREATED THE SAME AS UNEXPLAINED INVESTMENT IN ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 9. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). ITA NO.1831/AHD/2019 ASSTT. YEAR 2016 - 17 4 10. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT PAYMENTS, AS SHOWN IN THE LEDGER OF THE BROKER AMOUNTING TO 4,59,771/ - WAS MADE THROUGH THE BANK ACCOUNT OF HER HUSBAND NAMELY SHRI ANIL SHANTILAL MECWAN WHO IS EMPLOYED WITH UTTAR GUJARAT VIJ CO. LTD. THE ASSESSEE IN SUPPORT OF HER CONTENTION FILED THE BANK STATEMENT, COPY OF ADHAR, COPY OF ITR OF HER HUSBAND. 11. HOWEVER, THE LEARNED CIT (A) FOUND THAT THERE WAS A SUM OF 90,000 CREDITED IN THE BANK ACCOUNT OF THE HUSBAND OF THE ASSESSEE WHICH WAS NOT EXPLAINED BY HER. ACCORDINGLY, THE LEARNED CIT (A) CONFIRMED THE ADDITION TO THE TUNE OF 90,000 OUT OF THE TOTAL ADDITION MADE BY THE AO AND DELETED THE REMAINING A MOUNT. THUS THE LEARNED CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE IN PART. 12. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT - A, THE ASSESSEE IS IN APPEAL BEFORE US. 13 . THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 40 AND CONTENDED THAT THE ASSESSEE HAS DULY EXPLAIN ED THE SOURCE OF THE INVESTMENTS AMOUNTING TO 4,59,771/ - BEFORE THE AUTHORITIES BELOW. AS SUCH, THE ASSESSEE IS NOT UNDER THE OBLIGATION TO EXPLAIN THE SOURCE OF SOURCE I.E. SOURCE OF MONEY AVAILABLE IN THE HANDS OF THE HUSBAND. 13 .1 THE LEARNED AR FURTHER CONTENDED THAT THE LEARNED CIT (A) HAS EXCEEDED HIS JURISDICTION BY CONFIRMING THE ADDITION TO THE TUNE OF 90,000 AS THE IMPUGNED ISSUE IS NOT ARISING FROM THE ORDER OF THE AO AS IT WAS THE CASE OF LIMITED S CRUTINY. 14 . ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 15 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE AS SESSEE HAS DULY DISCHARGE D THE OBLIGATION BY FURNISHING THE NECESSARY EVIDENCE ITA NO.1831/AHD/2019 ASSTT. YEAR 2016 - 17 5 ABOUT THE SOURCE OF FUND USED IN MAKING THE INVESTMENT IN THE SECURITIES. IN THIS CONNECTION, THE LEARNED AR HAS FILED THE BANK STATEMENT, COPY OF THE ITR, IDENTITY PROOF WHICH ARE AVAILABLE ON PAGES 9 - 16 OF THE PAPER BOOK. 15 .1 THE ASSESSEE WAS NOT UNDER THE OBLIGATION TO JUSTIFY THE SOURCE OF SOURCE IN THE GIVEN FACTS AND CIRCUMSTANCES. HAD THE REVENUE ANY DOUBT ON THE SOURCE OF FUNDS IN THE HANDS OF THE HUSBAND, THE REVENUE COULD HAVE PROCEEDED AGAINST THE HUSBAND OF THE ASSESSEE. IN OTHER WORDS, THE ASSESSEE WAS NOT ANSWERABLE BASED ON THE DOCUMENTARY EVIDENCE ABOUT THE SOURCE OF MONEY IN THE HANDS OF THE HUSBAND. 15 .2 FURTHERMORE, WE NOTE FR O M THE NOTICE ISSUED UNDER SECT ION 143(2) THAT IT WAS THE CASE OF THE L IMITED SCRUTINY FOR THE FOLLOWING PURPOSE: I. WHETHER THE INVESTMENT AND INCOME RELATING TO SECURITIES TRANSACTION ARE DULY DISCLOSED 15 .3 FROM THE ABOVE, THE ASSESSEE WAS TO JUSTIFY THE SOURCE OF INVESTMENTS MADE IN THE SECURITIES WHICH HAS BEEN DULY EXPLAINED. THEREFORE, THE QUESTION ABOUT THE SOURCE OF FUND IN THE HANDS OF THE HUSBAND CANNOT RAISED FROM THE ASSESSEE AT THE STAGE. 15 .4 IT IS ALSO PERTINENT TO NOTE THAT THE AO IN HIS REMAND REPORT HAS ALSO ADMITTED THE FACT THAT THE IMPUGNED INVESTMENTS HAS BEEN MADE THROUGH THE FUND RECEIVED FROM THE HUSBAND OF THE ASSESSEE. THE RELEVANT FINDING OF THE AO IN THE REMAND REPORT IS STANDS AS UNDER: WITHOUT PREJUDICE TO THE ABOVE REGARDING ADMISSIBILITY OF ADDITIONAL EVIDENCES, IT IS SEEN THAT THE INVESTMENT IN SHARES WAS MADE BY SHRI ANIL MACWAN, HUSBAND OF THE ASSESSEE IN THE NAME OF ASSESSEE FROM HIS BANK ACCOUNT AND ENTRY OF CHEQUES GIVEN TO SHARE BROKER IS ALSO REFLECTED IN ADC BANK ACCOUNT OF SHRI ANIL MACWAN. 15 .5 FROM THE ABOVE, WE HOLD THAT THE ASSESSEE HAS DISCHARGE D HER DUTY BY DISCLOSING THE SOURCE OF FUND IN THE INVESTMENT OF SECURITIES. ACCORDINGLY, THERE CANNOT BE ANY ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. HENCE, WE SET ASIDE THE ITA NO.1831/AHD/2019 ASSTT. YEAR 2016 - 17 6 FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. THUS THE GROUND AND ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 16 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE COURT ON 23 /03 / 2021 AT AHMEDABAD. SD/ - SD/ - (MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 23 / 03 /2021 M ANISH