Virender Kumar Gupta , Hyderabad V. Asst. Commissioner of Income Tax, Circle-7(1), Hyderabad

ITA 1852/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6730 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 23-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N SRIKANTH
• Keywords: Unexplained cash credit; Unexplained investment; Principle of natural justice
• Section: 143(3); 69B; 147; 68; 69; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1852/HYD/2019 ASSESSMENT YEAR: 2011 - 12 VIRENDER KUMAR GUPTA HUF, HYDERABAD. PAN: AACHV 2718 Q VS. ACIT, CIRCLE - 7(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI SIDDARTH MANTRI FOR MR. M. MADHUSUDAN MANTRI REVENUE BY: SHRI N. SRIKANTH, DR DATE OF HEARING: 12/01/2021 DATE OF PRONOUNCEMENT: 20 /01/2021 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 3, HYDERABAD IN APPEAL NO. 10228/ACIT - 7(1)/CIT(A) - 3/2018 - 19, DATED 26/11/2019 PASSED U/S. 143(3) R.W.S 147 AND U/S. 250(6) OF THE ACT FOR THE A.Y.: 2011 - 12. 2. THE ASSESSEE HAS RAISED NINE GROUNDS IN ITS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: - 1. THE ORDER OF THE LD. CIT(A) IN SUSTAINING THE ADDITION OF RS. 15,74,974/ - AS UNEXPLAINED INVESTMENT U/S. 69B OR U/S. 69 IS WHOLLY UNSUSTAINABLE IN LAW AN D ON FACTS. 2. THE LD. CIT(A) FAILED TO NOTE THAT THE SOURCE OF INVESTMENT OF RS. 15,74,974/ - WERE PROPERLY EXPLAINED AND THE SAME WAS ACKNOWLEDGED BY THE A.O. IN ORDER THEREFORE, THE LD. CIT(A OUGHT TO HAVE HELD THAT THERE WAS NO UNEXPLAINED INVESTMENT A S 2 PROVIDED U/S. 69B OR U/S. 69 AND THEREFORE ERRED IN CONFIRMING THE ADDITION OF RS. 15,74,974/ - . 3. THE LD. CIT(A) FAILED TO NOTE THAT THE ADDITION WAS MADE IN PURSUANCE TO REOPENING OF THE CASE U/S. 148, HENCE IT WAS MANDATORY ON PART OF A.O. TO PROVIDE REASONS FOR REOPENING THE CASE, WHICH HE FAILED AND THEREFORE THE CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSMENT U/S 147 WITHOUT PROVIDING THE REASONS FOR REOPENING AND WITHOUT AFFORDING THE OPPORTUNITY TO THE ASSESSEE TO FILE HIS OBJECTIONS IF ANY WOULD BE UNSUSTAINABLE IN LAW. 4. THE CIT(A) FAILED TO NOTE THAT MERELY INVESTMENT IN A DUBIOUS COMPANY DOES NOT MAKE THE INVESTMENT UNEXPLAINED IF OTHERWISE THE SOURCES OF INVESTMENTS ARE PROPERLY EXPLAINED. THEREFORE, THE CIT(A) OUGHT TO HAVE DELETED THE ADDIT ION WHICH WAS WRONGLY MADE ON ABOVE PREMISE. 5. THE CIT(A) HAS WRONGLY BASED HIS ORDER ON FOLLOWING DECISIONS. (I) SUMATI DAYAL VS. CIT (80 TAXMAN 89) (SC) (II) BIMALCHAND JAIN L/H SHANTI DEVI BIMALCHAND JAIN VS. CIT (BOMBAY HIGH COURT, ITA NO. 18/201 7). (III) SRI ABHIMANYU SION VS. ACIT (CHANDIGARH BENCH OF ITAT ITA NO. 951 / 2016). (IV) ITO VS. SHAMIM M BHARWANI (ITAT, MUMBAI ITA NO. 4906/2011). THE ABOVE CASES WERE DECIDED IN RELATION TO UNEXPLAINED CREDITS U/S. 68 OR CLAIM OF EXEMPTIONS U/S. 10(38). AS THE RELEVANT FACTS OF THE ABOVE CASES ARE ENTIRELY DIFFERENT FROM THE FACTS IN CASE OF APPELLANT, THEREFORE, THE CIT(A) OUGHT TO HAVE DIFFERENTIATED THE FACTS AND SHOULD NOT HAVE PASSED THE ORDER ON IRRELEVANT FACTS AND THEREFO RE ERRED IN SUSTAINING THE ADDITION OF RS. 15,74,974/ - U/S. 69. 6. THE CIT(A) HAS PASSED ORDER BASED ON WRONG UNDERSTANDING THAT THE APPELLANT HAS CLAIMED EXEMPTION U/S. 10(38), WHEREAS THE APPELLANT HAS NOT CLAIMED ANY EXEMPTION U/S. 10(38) AND THEREFORE ERRED IN SUSTAINING ADDITION OF RS. 15,74,974/ - U/S. 69. 7. THE CIT(A) HAS WRONGLY PRESUMED THAT THE DISALLOWANCE U/S. 69B IS A TYPOGRAPHICAL ERROR ON THE PART OF A.O. AND THE SAME SHOULD BE U/S. 69, AS NO SUCH CONFIRMATION OF A.O. IS THERE ON RECORD. 8 . THE ORDER OF CIT(A) IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS NO OPPORTUNITY OF HEARING WAS GIVEN. 9. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 3 3. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE ME STATING THAT THE LD. CI T (A) HAS PASSED EX - PARTE ORDER WITHOUT PROVIDING AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD CIT (A) IN ORDER TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD . LD. DR, ON THE OTHER HAND, VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LD. AR AND ARGUED THAT SUFFICIENT OPPORTUNITIES HAD BEEN PROVIDED TO THE ASSESSEE HOWEVER, ON THE GIVEN DATES OF HEARING, NEITHER THE ASSESSEE NOR ITS REPRESENTATIVE APPEARED BE FORE THE LD. CIT (A). THEREFORE THE LD. CIT (A) HAD NO OTHER OPTION BUT TO PASS EX - PARTE ORDER BASED ON THE MATERIALS AVAILABLE ON RECORD. HENCE, IT WAS PLEADED THAT THE ORDER PASSED BY THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON EXAMINING THE FACTS OF THE CASE, I FIND MERIT IN THE SUBMISSIONS OF THE LD. DR. THE LD. CIT (A) HAD POSTED THE CASE ON SEVERAL OCCASIONS. HOWEVER, NONE APPEARED ON BEHALF OF T HE ASSESSEE BEFORE THE CIT(A) ON THE DATES OF HEARING. THEREFORE, THE LD. CIT (A) WAS LEFT WITH NO OTHER OPTION EXCEPT TO ADJUDICATE THE APPEAL EX - PARTE. FROM THE ORDER OF LD.CIT(A) IT IS ALSO EVIDENT THAT HE HAS PASSED A SPEAKING ORDER. IN THIS SITUATIO N, I DO NOT FIND MUCH STRENGTH IN THE ARGUMENTS ADVANCED BY THE LD. AR. HOWEVER, CONSIDERING THE PRAYER OF THE LD. AR, IN THE INTEREST OF JUSTICE, I HEREBY REMIT THE MATTER BACK TO THE FILE OF LD. 4 CIT (A) IN ORDER TO CONSIDER THE APPEAL AFRESH ON MERITS BY PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. AT THE SAME BREATH, I ALSO HEREBY CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. CIT (A) IN THE PROCEEDINGS FAILING WHICH THE LD. CIT (A) SHALL BE AT LIBERTY TO PASS APPROPRIATE OR DER IN ACCORDANCE WITH LAW AND MERITS BASED ON THE MATERIALS ON THE RECORD. IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREINABOVE. PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2021. SD / - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 20 TH JANUARY, 2021. OKK COPY TO: - 1) VIRENDER KUMAR GUPTA , HUF C/O. MADHU MANTRI & ASSOCIATES, CHARTERED ACCOUNTANTS, 3 - 5 - 873, CIT(A) - 103, MATRUSHREE APARTMENTS, HYDERGUDA, HYDERABAD. 2) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 7(1), SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 3) THE CIT(A) - 3 , HYDERABAD 4) THE PR. CIT - 3 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE