SMT. VIRENDRA P. JHA, Nagpur V. ACIT CIRCLE-1(1), Nagpur

ITA 197/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1640 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: C J THAKAR
• Keywords: Principle of natural justice
• Section: 69C

Judgement Text

1 NOS. 197 & 198/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 197 /NAG/2013 ASSESSMENT YEAR : 2008 - 09. SHRI VIRENDRA PRAKASH JHA, ASSTT. COMMISSIONER OF KRISHNA BHAVAN, KADBI CHOWK, VS. INCOME - TAX, , KAMPTEE ROAD, NAGPUR. CENTRAL CIRCLE - 1(1), PANAGBPJ7256N NAGPUR. APPELLANT. RESPONDENT. AND I. T.A. NO. 198/NAG/2013 ASSESSMENT YEAR : 2008 - 09. SMT. CHITRALEKHA V. JHA, ASSTT. COMMISSIONER OF NAGPUR. VS. INCOME - TAX, CENTRAL CIRCLE1(1),NAGPUR. APPELLANT. RESPONDENT. A PPELLANT BY : SHRI C.J. THAKAR. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 31 - 08 - 2015 DATE OF PRONOUNCEMENT : 11 TH SEPT., 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE ARISING FROM TWO SEPARATE ORDERS OF LEARNED CIT(APPEALS) - I, NAGPUR IDENTICALLY DATED 21 - 03 - 2013. THESE 2 NOS. 197 & 198/NAG/2013 APPEL LANT S HAVE CHALLENGED THE ADDITION U/S 69A OF ` .16,88,060/ - AND ` .13,18,600/ - RESPECTIVELY. 2. GROUND NOS . 1 AND 2 IN BOTH THESE CASES ARE, THEREFORE, IDENTICALLY WORDED AND HEREIN UNDER DECIDED BY THIS COMMON ORDER. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT MR. V.P. JHA IS IN THE BUSINESS OF INTERIOR DECORATION. MR S . JHA IS IN THE BUSINESS OF TRADING IN CLOTH MATERIAL AND GARMENTS. 3.1 A SEARCH WAS CONDUCTED ON RANA MAVEN GROUP AND M/S R.V. DEVELOPERS. IN CONSEQUENCE THEREUPON ENQUIRIES HAVE ALSO BEEN RAISED IN THE CASE OF THESE APPELLANTS HAVING CONNECTION WITH THE SAID CONCERNS. IT WAS NOTICED THAT THE ASSESSEE HAD CONTRIBUTED A SUM OF ` 15,50,000/ - IN M/S R.V. DEVELOPERS. LIKEWISE THE BALANCE SHEET OF M/S R.V. DEVELOPERS HAS REFLECTED AN UNSECURED LOAN OF ` . 5 LAKHS FROM MRS. JHA. ON ENQUIRY IT WAS FOUND THAT ON SEVER AL DATES THE ASSESSEE HAD DEPOSITED ` .11,87,000/ - IN SAVING ACCOUNT WITH BANK OF INDIA. LIKEWISE IN THE CASE OF MRS. JHA IT WAS NOTICED THAT ON DIFFERENT DATES A SUM OF ` 11,30,000/ - WAS DEPOSITED IN THE SAVINGS ACCOUNT OF BANK OF INDIA. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION THE AO HAS INVOKED THE PROVISIONS OF SECTION 69A OF I.T. ACT AND TAXED ` 11,87,000/ - IN THE HANDS OF MR. JHA. LIKEWISE THE ASSESSEE WAS NOT ABLE TO EXPLAIN AN INVESTMENT IN A LAND DEAL OF ` 4,75,000/ - . THE SAME WAS ALSO TAXED BY INVOKING THE PROVISIONS OF SECTION 69C OF I.T. ACT. IN IDENTICAL MANNER 3 NOS. 197 & 198/NAG/2013 THE AO HAS TAXED A SUM OF ` 11,30,000/ - IN THE HANDS OF MRS. JHA BY INVOKING THE PROVISIONS OF SECTION 69A OF I.T. ?ACT. 4. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(APPEALS) HAS CONFIRMED THE ACTION OF THE AO AFTER MAKING AN OBSERVATION THAT THE ASSESSEE HAS TRIED TO BUILT UP A CASE THAT THERE WAS SUFFICIENT OPENING CASH BALANCE WHICH WAS ACCUMULATED OVER THE YEARS AND DEPOSITED WITH THE SAID C ONCERN. BEING NOT CONVINCED IN BOTH THE CASES, LEARNED CIT(APPEALS) HAS AFFIRMED THE ADDITIONS. 5. FROM THE SIDE OF THE APPELLANT, LEARNED A.R., MR. C.J. THAKAR APPEARED AND HIS FIRST ARGUMENT WAS THAT THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH THE ASSESSEE AS IS EVIDENT FROM THE P & L ACCOUNT AND BALANCE SHEET PERTAINING TO ASSESSMENT YEARS 2003 - 04 TO 2007 - 08. LEARNED A.R. HAS ALSO PLEADED THAT THE PROFIT EARNED DURING THE YEAR WAS ALSO DEPOSITED IN THE BANK. 5.1 HOWEVER, LEARNED A.R. HAS EXPRESSED AT THE OUTS ET THAT INSTEAD OF INVOLVING THESE TWO APPELLANTS IN THE LONG DRAWN LEGAL BATTLE, THE ASSESSEE MAY BE PERMITTED TO OFFER 50% OF THE TOTAL ADDITION TO BE TAXED IN THE RESPECTIVE HANDS. IN THE INDEX OF THE PAPER BOOK FILED, LEARNED A.R. HAS WRI TTEN AGREE FOR THE ADDITION OF 50% OF TOTAL ADDITION. 5.2 CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS ALSO IN THE LIGHT OF THE EVIDENCES PLACED ON RECORD, WE ARE OF THE VIEW THAT LEARNED A.R. HAS SUCCESSFULLY PLEADED THAT THE E NDS OF JUSTICE WOULD MEET IF 50% OF THE TOTAL ADDITION BE TAXED IN THE HANDS OF THESE APPELLANTS. TO THIS EFFECT, A NOTING HAS ALSO BEEN MADE ON THE INDEX OF THE PAPER BOOK. 4 NOS. 197 & 198/NAG/2013 6. WE, THEREFORE, HOLD THAT ALTHOUGH THE AO WAS JUSTIFIED IN TAXING UNEXPLAINED AMOUNT IN THE HANDS OF THESE ASSESSES BUT NATURAL JUSTICE DEMAND TO ADOPT A RATIONAL VIEW CONNECTED WITH THE ADHOC ADDITION MADE BY THE AO BY ACCEPTING THE PLEA OF THE LEARNED COUNSEL OF THE ASSESSEE. WE, THEREFORE, DIRECT THE AO TO RESTRICT THE DISALLOWA NCE AT THE RATE OF 50% AND REST OF THE AMOUNT SHOULD BE DELETED. WE HOLD ACCORDINGLY. 7. IN THE RESULT, THE GROUNDS RAISED BY THE ASSESSEE IN B O TH THE CASES ARE PARTLY ALLOWED. REST OF THE GROUNDS HAVE NOT BEEN SERIOUSLY CONTESTED. 8. IN THE RESULT, BOTH T HESE APPEALS ARE PARTLY ALL O WED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF SEPT., 2015. SD/ SD/ (SHAMIM YAHYA) (MUKUL K. SHRAWAT) (ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 11 TH SEPT. 2015. COPY OF ORDER FORWARDED TO : 1. TH E ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR