Makarand Sakharam Kulkarni, Pune V. Income-tax Officer, Ward - 2(1), Pune

ITA 1939/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6612 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 24-12-2018
• Court: TRIBUNAL

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.1939/PUN/2018 / ASSESSMENT YEAR : 2014-15 MR. MAKARAND SAKHARAM KULKARNI, 44/7, NAVASAHYADRI SOCIETY, KARVE NAGAR, PUNE 411 052. PAN : ABFPK3593A. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 2(1), PUNE. . / RESPONDENT ASSESSEE BY : SHRI S.G. NAIK & SHRI ANOOP NAIK. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY ASSESSEE IS EMANATING OUT OF ORDE R OF COMMISSIONER OF INCOME-TAX (A) 3, PUNE DATED 14.08.2018 FOR A.Y. 2014-15. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL AND IS STATED TO BE DERIVING INCO ME FROM SALARY AND OTHER SOURCES. ASSESSEE ELECTRONICALLY FILE D HIS RETURN OF INCOME FOR A.Y. 2014-15 ON 31.07.2014 DECLARING TOTAL IN COME AT RS.2,48,612/-. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. THE CASE WAS SELECTED UNDER CASS FO R SCRUTINY. / DATE OF HEARING : 09.04.2019 / DATE OF PRONOUNCEMENT: 30.04.2019 2 NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND S ERVED ON THE ASSESSEE. THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.27.12.2016 DETERMINING THE TOTAL INCOME AT RS.41,80,610/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.14.08.2018 (IN A PPEAL NO.PN/CIT(A)-3/WARD-2(1), PN/314/2016-17) GRANTED SUBSTA NTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CI T(A), ASSESSEE IS NOW BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 35,26,000/- ON THE GROUND THAT, (I) THE VALUATION REPORT DT . 29/05/2018 WAS RECEIVED FROM THE A.O. (II) AND THEREAFTER NOTICES FOR THE HEARING WAS SEN T ON 10/07/2017 AND 06/08/2018. HOWEVER, NOTICES WAS RETURNED BACK I.E. WAS NOT REC EIVED BY THE ASSESSEE. (III) AND ORDER WAS PASSED ON 14/08/2018. 2. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSESSE E SUBMITS THAT, (I) ASSESSEE IS A REAL BROTHER OF MR. DEEPAK SAKHAR AM KULKARNI (ALIAS DSK). (II) ASSESSEE'S OFFICE WAS SITUATED AT 'DSK HOUSE' , 1187/60, J.M.ROAD, SHIVAJINAGAR, PUNE - 411005. THE AFORESAID ADDRESS BELONGS TO 'DSK GROUP' OF COMPANIES. 3. THAT, DSK GROUP OF COMPANIES FAILED TO RETURNED FIXED DEPOSIT AMOUNTS TO FIXED DEPOSIT HOLDERS, THEREFORE THE OFF ICE WAS RAIDED AND SEALED BY POLICE AUTHORITIES, ECONOMIC OFFENCE WING (EOW) PUNE UNDER MAHARASHTRA PROTECTION OF INTEREST OF DEPOSITOR ACT . 4. T HAT , AFTER THE ABOVE RAID , STAFF MEMBERS OF DSK G R OUP LEFT THE E MPLO Y MENT AND OFFICE WAS COMPLETELY C L OSED AND EVEN TODA Y O F F I CE I S C LOSED. 5. THAT , A F TER ENQUIRY BY PUNE POLICE, MR. D.S.KULKARNI AND HI S FAMILY M E MB ERS AR E IN MAGISTRATE CUSTODY AND PRESENTLY ARE IN JAIL AT PUNE. SO ALSO, TH E A SS ESSEE I S ALSO ON ORAL BAIL AS PER ORDER OF THE HON. DIST . COURT PUNE . 6. FRO M TH E ORDER O F HON. CIT IT IS SEEN THAT, NOTICES OF THE HEARING WA S SENT O N 10 1 07 12 017 AND 06 / 08/2018 ON THE ADDRESS ' DSK HOUSE, 1 187/60 , J.M.ROAD, SHIVAJINAGAR, PUNE - 411005. A ND I T IS FURTHER STATED IN THE ORDER OF HON . CIT THAT , 'THE ENVELOP RETURNED B AC K W ITH THE REMARK ' ' ADDRESSEE LEFT WITHOUT INSTRUCTION ' AND NO IN T IMATION OF CHANGE OF ADDRESS WAS GIVEN. 3 T HUS , I T IS CLEAR FROM THE FACTS THAT , SINCE OFFICE WAS SEALED NOTICES WERE R ET U R NED BACK AND NOT SER V ED ON THE ASSESSEE. 7. T HU S IT I S SUBMITTED THAT , NOTICES OF HON. CIT APPEALS WERE NEVER SERVED ON TH E A SS ESSEE AND ONL Y AFTER PHONE CALLS RECEIVED BY ASSESSEE ' S AUTHORIZED REPRESENTATI V E FOR R ECOVERY OF THE TAX DUES, ASSESSEE CAME TO KNOW THAT ORDER IN APPEAL B Y HON. CIT-3 PUNE WAS PASSED. 8. T H E A S SESSEE SUO MOTU APPEARED IN THE CIT (APPEAL) - 3 PU NE OFFICE AND ASSES SE E RECEI V ED THE ORDER ON 25.10.2018 PERSONALL Y . 9. WITHOUT PREJUDICE TO ABOVE GROUNDS, ASSESSEE FURTHE R SUBMIT THAT AS PER SEC TION 1 42A(4) OF THE INCOME TA X ACT , 1961 , VALUATION OFFICER HAS NOT GIVEN P ROPE R OPPO R TUNIT Y BEING HEARD AND DIRECTLY VALUATION REPORT DATED 2 9 / 05 / 2018 W AS SUBMITTED TO ITO OFFICE, WARD 2(1), PUNE. 10. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT T HAT, VALUATION REPORT WAS DIRECTLY FORWARDED BY ITO WARD 2(1), PUN E DATED 25/06/2018 TO CIT (A) WITHOUT GIVING PROPER OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 11. IT IS SUBMITTED THAT, LEARNED CIT (A) COULD HAV E REMANDED BACK THE CASE TO CONCERNED ITO ON THE ISSUE OF VALUATION REP ORT OF PROPERTY AND ITS OBJECTION WITH HEARING. 12. THEREFORE, IT IS PRAYED THAT, CASE BE REMANDED BACK AND PROPER OPPORTUNITY ON THE POINT OF VALUATION REPORT MAY KI NDLY GIVEN TO THE ASSESSEE. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THOUGH ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE SOLE CONTROVERSY IS WITH RESPECT TO THE ADDITION OF RS.39,32,000/- BEING THE DIFFERENCE IN MARKE T VALUE AS VALUED BY THE STAMP DUTY AUTHORITY AND THE ACTUAL CONS IDERATION PAID BY THE ASSESSEE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD PURCHASED AN IMMOVABLE PROPERTY FOR A CO NSIDERATION OF RS.1,90,32,000/- WHICH WAS NOT REFLECTED IN THE RETURN OF IN COME FILED BY THE ASSESSEE. FURTHER ACCORDING TO AO THE INVESTM ENT IN PROPERTY WAS LARGE AS COMPARED TO TOTAL INCOME DECLARED FOR THE Y EAR UNDER CONSIDERATION AT RS.2,48,612/-. AO ALSO NOTICED THAT ST AMP DUTY AUTHORITIES HAD ASCERTAINED THE MARKET VALUE OF THE AFORE SAID PROPERTY AT RS.1,90,32,000/-. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN THE SOURCE OF INVESTMENT IN PROPERTY AND WHY THE DIFFERENCE IN VALUE 4 (RS.1,90,32,000/- - RS.1,51,000/-) NOT BE TREATED AS HIS INCO ME U/S 56(2)(VII)(B) OF THE ACT. THE SUBMISSIONS MADE BY THE ASSESSEE WERE NOT FOUND ACCEPTABLE TO AO. AO ACCORDINGLY ADDED THE D IFFERENCE OF RS.39,32,000/- AS INCOME FROM OTHER SOURCES AS PER PROVIS ION OF SECTION56(2)(VII)(B) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, A SSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO GRANTED PARTIAL RE LIEF TO THE ASSESSEE BY DIRECTING THE ADDITION BE RESTRICTED TO RS.3 5,26,000/-. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US. 5. BEFORE US, LD.A.R. AT THE OUTSET SUBMITTED THAT LD.CIT(A ) HAS PASSED ORDER BASED ON THE REPORT OF DVO AND THAT AS SESSEE WAS NOT ALLOWED ANY OPPORTUNITY TO FURNISH HIS STAND ON THE DVO R EPORT. HE FURTHER PRAYED THAT IF GIVEN A CHANCE, ASSESSEE UNDERTAK ES TO APPEAR BEFORE THE AUTHORITIES AND FURNISH ALL THE REQUIRED DETAILS A ND HIS OBJECTIONS WITH RESPECT TO THE VALUATION REPORT AND PRA YED TO SET ASIDE THE ASSESSMENT ORDER. LD.D.R. ON THE OTHER HAND SUPPOR TED THE ORDER OF AO AND OBJECTED TO LD.A.R.S PRAYER FOR 2 ND INNINGS. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESP ECT TO ADDITION OF RS.39,32,000/- BEING THE DIFFERENCE IN MARKET VALUE AND THE ACTUAL CONSIDERATION PAID BY THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT AFTER RECEIPT OF REPORT OF VALUER, DESPITE SERVICE OF NOTICE OF HEARING ON VARIOUS OCCASIONS, NONE ATTENDED BEFORE THE AO A ND THAT LD.CIT(A) PASSED ORDER BASED ON THE DVO REPORT. HOWEVER, CONSIDERING THE FACT THAT LD.A.R. HAS GIVEN AN ASSURANCE THAT ASSESSEE WILL CO-OPERATE AND APPEAR BEFORE LOWER AUTHORIT IES AND I N VIEW OF THE WELL SETTLED PRINCIPLE OF NATURAL JUSTICE THAT SU FFICIENT OPPORTUNITY OF HEARING SHOULD BE AFFORDED TO THE PARTIES A ND NO PARTY 5 SHOULD BE CONDEMNED UNHEARD, WE ARE OF THE VIEW THAT ON E MORE OPPORTUNITY BE GRANTED TO THE ASSESSEE TO PRESENT HIS CASE. WE THEREFORE RESTORE THE MATTER BACK TO THE FILE OF LD.CIT(A ) TO DECIDE THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO STAT E THAT LD.CIT(A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO B OTH THE PARTIES. ASSESSEE IS ALSO DIRECTED TO PROMPTLY FURNISH ALL T HE DETAILS CALLED FOR BY THE LOWER AUTHORITIES. IN VIEW OF OUR DECISION TO RESTORE THE ISSUE TO LD.CIT(A), WE ARE NOT ADJUDICATING ON MERITS THE GROUNDS OF THE APPEAL RAISED BY THE ASSESSEE. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH DAY OF APRIL, 2019. SD/- SD/- ( PARTHA SARATHI CHAUDHURY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 30 TH APRIL, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-3, PUNE. PR. CIT-2, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.