Shri Sarfarazkhan Sarvarkhan Pathan, Ahmedabad V. The Income Tax Officert, Ward-7(1), Ahmedabad

ITA 1893/AHD/2014

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8811 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Assessee Lawyers: P D SHAH
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence
• Section: 143(3); 133(6); 69B; 69; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER SARFARAZKHAN SARVARKHAN PATHAN, AHMEDABAD PAN: ACRPP5552H (APPELLANT) VS THE ITO, WARD-7(1), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI S.S. SHUKLA, SR. D.R. ASSESSEE BY: SHRI P.D. SHAH, A.R. DATE OF HEARING : 27-01-2021 DATE OF PRONOUNCEMENT : 22-03-20 21 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2009-10, ARISES FRO M ORDER OF THE CIT(A)-XIV, AHMEDABAD DATED 28-03-2014, IN PROCEED INGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ACTION OF THE PASSING OF THE ASSESSM ENT, WHICH IS AGAINST NATURAL JUSTICE ORDER AND THEREFORE THE ORDER PASSED BY THE LEARNED AO IS REQ UIRED TO QUASHED. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ADDITION TO THE EXTENT OF RS.51,66,0 58/- U/S 68 OF THE ACT AND THEREFORE THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ADDITIO N U/S 68 WHILE COMPUTING THE TOTAL INCOME. ITA NO. 1893/AHD/2014 ASSESSMENT YEAR 2009-10 I.T.A NO. 1853/AHD/2014 A.Y. 2009-10 PAGE NO. SARFARAZKHAN SARVARKHAN PATHAN VS. ITO 2 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ADDITION TO THE EXTENT OF RS. 50,09, 528/-AS UNEXPLAINED INVESTMENT U/S 69B OF THE ACT AND THEREFORE THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ADDITION U/S 69B WHILE COMPUTING THE TOTAL INCOME. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ADDITION TO THE EXTENT OF RS. 3,18,2 0,663/- OUT OF SUNDRY CREDITORS AND THEREFORE THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ADDITION WHILE COMPUTING THE TOTAL INCOME. 3. THE BRIEF FACT OF THE CASE IS THAT RETURN OF INC OME DECLARING TOTAL INCOME AT RS. 4,91,619/- WAS FILED ON 28 TH AUGUST, 2009. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT. A NOTICE U/S. 143( 2) OF THE ACT WAS ISSUED ON 27 TH AUGUST, 2010. THE RELEVANT FACTS PERTAINING TO TH E ISSUES CONTESTED IN THE APPEAL ARE DISCUSSED WHILE ADJUDICATING GROUNDS OF APPEAL FILED BY THE ASSESSEE AS FOLLOWS:- GROUND NO. 1 ( IS OF GENERAL NATURE) 4. DURING THE ASSESSMENT, THE ASSESSING OFFICER HAS PR OVIDED A NUMBER OF OPPORTUNITIES TO THE ASSESSEE INCLUDING ISSUES O F SHOW CAUSE NOTICES. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH REQUISI TE DETAIL AND EXPLANATION TO DISCHARGE HIS ONUS FOR VARIOUS ISSUES DURING THE COURSE ASSESSMENT PROCEEDINGS. THEREFORE, WE DO NOT FIND ANY INFIRMIT Y IN THE DECISION OF LD. CIT(A) HOLDING THAT SUFFICIENT NUMBER OF OPPORTUNIT IES WERE GRANTED TO THE ASSESSEE BEFORE FINALIZATION OF ASSESSMENT, THEREFO RE, THIS GROUND OF APPEAL OF THE ASSESSEE STANDS DISMISSED. GROUND NO. 2 (ADDITION TO THE EXTENT OF RS. 51,66,0 58/- U/S. 68 OF THE ACT) 5. DURING THE COURSE OF ASSESSMENT, THE ASSESSING O FFICER HAS REPEATEDLY ASKED THE ASSESSEE TO FURNISH EVIDENCE LIKE NAME, P AN, IDENTIFICATION, COPY I.T.A NO. 1853/AHD/2014 A.Y. 2009-10 PAGE NO. SARFARAZKHAN SARVARKHAN PATHAN VS. ITO 3 OF RETURN OF INCOME, BANK ACCOUNT/STATEMENT AND CON FIRMATION IN RESPECT OF ALL UNSECURED LOANS. BUT NO SUCH DETAILS WERE SUBM ITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. CON SEQUENTLY, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 3,32,87,504/- OF T HE AMOUNT CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE PERTAINING TO UNEX PLAINED LOAN. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) T HE ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCES FOR THE REASON THAT BECAUSE OF SEARCH ACTION CONDUCTED BY DRI ( DEPARTMENT OF REVENUE INTELLIGENCE) ON 12 TH NOV, 2011 AT ASSESSEE PREMISES, HE COULD NOT SUBMIT THE DETAIL. THE LD. CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE UNDE R RULE 46A OF THE INCOME TAX RULE. A REMAND REPORT WAS CALLED FROM THE ASSE SSING OFFICER. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS ACCEPTED T HE CONTENTION OF THE ASSESSEE THAT THERE WAS OPENING BALANCE OF UNSECURE D LOAN TO THE AMOUNT OF RS. 1,69,17,281/- WHICH WAS COMPARABLE FROM THE BAL ANCE SHEET OF THE ASSESSEE FOR ASSESSMENT YEAR 2008-09. THE ASSESSIN G OFFICER HAS ALSO REPORTED THAT M/S. ALKA INDIA LTD. ONE OF THE LENDE RS HAS ALSO FURNISHED FORM OF CONTRA-ACCOUNT AND ALSO CONFIRMED THAT IT HAD M ADE TRANSACTION WITH THE ASSESSEE COMPANY. THE ASSESSEE HAS SUBMITTED NAME, ADDRESS, PAN, CONFIRMATION AND THE UNSECURED LOAN TO THE AMOUNT O F RS. 71,040/- WAS ACCEPTED THROUGH CHEQUE AFTER TAKING INTO CONSIDERA TION THE REMAND REPORT OF THE ASSESSING OFFICER. THE LD. CIT(A) HAS DELETED THE ADDITION OF THE AFORESAID AMOUNT TOTALING TO RS. 2,81,21,446/- ( RS . 1,69,17,281+ RS. 1,11,33,125/- +RS. 71040/-), THEREFORE, LD. CIT(A) HAS UPHELD THE ADDITION TO THE EXTENT OF RS. 51,66,058/-. GROUND NO. 3(ADDITION TO THE ADDITION TO THE EXTENT OF RS. 50,09,528/- AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT) I.T.A NO. 1853/AHD/2014 A.Y. 2009-10 PAGE NO. SARFARAZKHAN SARVARKHAN PATHAN VS. ITO 4 6. DURING THE COURSE OF ASSESSMENT, THE ASSESSING O FFICER HAS REPEATEDLY ASKED THE ASSESSEE TO FURNISH THE DETAIL OF SOURCE OF INVESTMENT OF RS. 45,06,20,441/- IN STOCK EXCHANGE. DURING THE COUR SE OF ASSESSMENT, THE ASSESSEE HAS NOT EXPLAINED THE NATURE OF SHARE TRAN SACTION ALONG WITH SUPPORTING MATERIAL. AS PER THE SUBMISSION SUBMITT ED, IT WAS NOTICED THAT THESE SHARE TRANSACTIONS WERE MADE THROUGH SHARE B ROKERS M/S. B. LODHA SECURITIES AND BARGHAVA LODHA STOCK BROKERS LTD.. THE PEAK OF THE INVESTMENT MADE WAS WORKED OUT TO THE AMOUNT OF RS. 1,47,39,724/- AND THE PEAK OF INVESTMENT MADE THROUGH OTHER BROKERS WAS W ORKED TO THE AMOUNT OF RS. 7,43,602/-. SINCE THE ASSESSEE HAS NOT FILED T HE SUPPORTING DETAIL, THEREFORE, THE ASSESSING OFFICER HAS TREATED PEAK I NVESTMENT MADE THROUGH SHARE BROKERS TO THE AMOUNT OF RS. 1,54,83,226/- ( RS. 1,47,39,724/- + RS. 7,43,602/-) AS UNEXPLAINED INVESTMENT U/S. 69B OF T HE ACT. 7. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE LD. CIT(A), THE ASSESSEE HAS PLEADED THAT THE ASSESSING OFFICER HAS MADE INCORRECT ADDITION SINCE MAJOR PART OF INVESTMENT IN SHARES WAS MADE T HROUGH BOOKS OF ACCOUNT OF M/S. S.V. ENTERPRISES AND ALSO EXPLAINED THE SOU RCE OF INVESTMENT. THE ASSESSEE HAS SUBMITTED BEFORE LD. CIT(A) THAT HE CO ULD NOT FURNISH SUCH DETAIL DURING THE COURSE OF ASSESSMENT BECAUSE HIS BOOKS OF ACCOUNT WERE IMPOUNDED BY THE DRI. DURING THE COURSE OF REMAND REPORT, THE ASSESSING OFFICER AFTER VERIFICATION OF THE BOOKS OF ACCOUNT SUBMITTED THAT ASSESSEE HAS MADE PAYMENT TO M/S. LODHA SECURITIES OF RS. 1,04,7 3,698/- DULY RECORDED IN THE AUDITED BOOKS OF ACCOUNT FROM DISCLOSED SOUR CES. THE ASSESSING OFFICER HAS ALSO SUBMITTED THAT ON FURTHER VERIFICA TION, THE BROKER HAS CONFIRMED THESE TRANSACTIONS IN RESPONSE TO THE NOT ICE U/S. 133(6) OF THE ACT. I.T.A NO. 1853/AHD/2014 A.Y. 2009-10 PAGE NO. SARFARAZKHAN SARVARKHAN PATHAN VS. ITO 5 CONSIDERING THE AFORESAID FACTS AND REMAND REPORT O F THE ASSESSING OFFICER, THE LD. CIT(A) HAS RESTRICTED ADDITION TO THE AMOUN T OF RS. 50,09,528/- U/S. 69B OF THE ACT GROUND NO. 4 (CONFIRMED THE ADDITION TO THE EXTENT OF RS. 3,18,20,663/- OUT OF SUNDRY CREDITORS) 8. DURING THE COURSE OF ASSESSMENT, THE ASSESSE E HAS FAILED TO FURNISH CONTRA ACCOUNT AND CONFIRMATION OF OUTSTANDING BALA NCE SHOWN AS SUNDRY CREDITORS TO THE AMOUNT OF RS. 3,61,00,157/-. THER EFORE, THE ASSESSING OFFICER HAS TREATED THE SAME AS UNEXPLAINED AND ADD ED TO THE TOTAL INCOME OF THE ASSESSEE. IN THE REMAND REPORT, THE ASSESSING O FFICER HAS SUBMITTED THAT HE HAS NOT RECEIVED CONFIRMATION FROM THE PARTIES A FTER ISSUING LETTER U/S. 133(6) TO THE CREDITORS. THE ASSESSEE IN REJOINDER TO REMAND REPORT SUBMITTED THAT HE HAS FURNISHED VARIOUS DETAILS INCLUDING CON FIRMATION OF SUNDRY CREDITORS BEFORE THE ASSESSING OFFICER AND ALSO SUB MITTED THAT SUCH CREDITORS WERE PAID IN NEXT YEAR EVIDENCING HIS BANK ACCOUNT LEDGER ACCOUNT OF THE PARTIES. HOWEVER, THE LD. CIT(A) HAS DELETED THE A MOUNT RS. 42,79,494/- IN THE CASES OF TWO SUNDRY CREDITORS AND CONFIRM THE R EMAINING OUTSTANDING BALANCE OF SUNDRY CREDITORS TO THE AMOUNT OF RS. 31 ,820,663/- REITERATING THE FACTS REPORTED BY THE ASSESSING OFFICER THAT RELEVA NT CONFIRMATIONS WERE NOT FILED BY THE PARTIES. 9. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE ASSESSEE HAS FILED ADDITIONAL EVIDENCES INADVERTENTLY STATING UN DER RULE 27 OF THE ITAT RULE INSTEAD OF STATING RULE 29 OF THE ITAT RULE. IN THE AFFIDAVIT FOR ADMISSION OF ADDITIONAL EVIDENCES, THE ASSESSEE HAS SUBMITTED THAT THESE I.T.A NO. 1853/AHD/2014 A.Y. 2009-10 PAGE NO. SARFARAZKHAN SARVARKHAN PATHAN VS. ITO 6 DOCUMENTS COULD NOT BE FILED BEFORE AUTHORITIES BEL OW ON ACCOUNT OF THE REASONS BEYOND CONTROL OF THE ASSESSEE VIZ. (A) ARR EST OF THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS (B) IMPOUNDING OF BOOKS OF ACCOUNT BY DRI AND (C) NON-COOPERATION OF SUCH PARTIES ON ACCOUNT OF F INANCIAL REASONS. CONSIDERING THE SPECIFIC CIRCUMSTANCES LISTED ABOVE MENTIONED IN THE AFFIDAVIT THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE ARE ACCEPTED UNDER RULE 29 OF THE ITAT RULE. 10. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL O N RECORD. ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED U/S. 143( 3) OF THE ACT ON 16 TH DECEMBER, 2011. DURING THE COURSE OF APPELLATE PROC EEDINGS, THE SEARCH ACTION WAS CARRIED OUT BY THE DRI (DIRECTOR OF REVE NUE INTELLIGENCE) ON 12 TH NOV, 2011 AT THE PREMISES OF THE ASSESSEE. FURTHER , IN THE AFFIDAVIT IT IS REPORTED THAT ASSESSEE HAS BEEN ARRESTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HIS BOOKS OF ACCOUNT WERE IMPOUNDED BY THE DRI AS A RESULT ASSESSEE COULD NOT MAKE FULL COMPLIANCE BEF ORE AUTHORITY BELOW. IT IS DEMONSTRATED FROM THE AFORESAID FACTS THAT BECAUSE OF NON-AVAILABILITY OF THE RECORDS AND INVOLVEMENT OF THE ASSESSEE IN THE DRI PROCEEDINGS THE REQUIRED INFORMATION AND RELEVANT DETAIL ON THE ISSUE INVEST IGATED BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS COULD NOT BE FILED. IT IS ALSO NOTICED THAT ASSESSEE HAS FILED ADDITIONAL EVIDENCES IN RES PECT OF ALL THE THREE GROUNDS OF APPEAL CONTESTED IN THIS APPEAL. IN THE LIGHT O F THE ABOVE FACTS AND CIRCUMSTANCES, WE CONSIDER IT APPROPRIATE TO RESTOR E THESE ISSUES TO THE FILE OF ASSESSING OFFICER FOR ADJUDICATING DE-NOVO AFTER TA KING INTO CONSIDERATION THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. THEREFORE, GROUND NO. 2 TO 4 FILED BY THE I.T.A NO. 1853/AHD/2014 A.Y. 2009-10 PAGE NO. SARFARAZKHAN SARVARKHAN PATHAN VS. ITO 7 ASSESSEE ARE RESTORED TO THE FILE OF ASSESSING OFFI CER FOR FRESH ADJUDICATION AS DIRECTED ABOVE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22-03-2021 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 22/03/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,