Shri Manubhai Baldevbhai Patel, Gandhinagar V. The Income tax Officer,Ward-3, Gandhinagar

ITA 2012/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1261 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: S N DIVATIA
• Keywords: Opportunity of being heard
• Section: 133(6); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2011 /AHD/201 2 / ASSESSMENT YEAR : 2008 - 09 SMT. LILABEN MANUBHAI PATEL, NR. SBI RANDHEJA, GANDHINAGAR 382 620 PAN : AAZPP 4797 J VS INCOME TAX OFFICER, WARD - 3, GANDHINAGAR ./ ITA NO. 2012 /AHD/201 2 / ASSESSMENT YEAR : 2008 - 09 SHRI MANUBHAI BALDEVBHAI PATEL, NR. SBI RANDHEJA, GANDHINAGAR - 382620 PAN : AAZPP 4779 L VS INCOME TAX OFFICER, WARD - 3, GANDHINAGAR / (APPELLANT) / (RESPONDENT) ASSESSEE (S) BY : SHRI S. N. DIVATIA, AR REVENUE BY : SHRI VILAS V. SHINDE, SR DR / DATE OF HEARING : 0 2 / 0 6 /201 6 / DATE OF PRONOUNCEMENT: 14 / 06 /201 6 / O R D E R THESE TWO APPEALS FILED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), GANDHINAGAR, AHMEDABAD OF EVEN DATED 15 .06.201 2 FOR ASSESSMENT YEAR 2008 - 09. ISSUES BEING COMMON AND ASSESSEES BEING RELATED, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. GROUNDS RAISED IN B OTH THE APPEALS ARE TO THE EFFECT THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS: - I ) THE INCOME HAS BEEN ENHANCED WITHOUT GIVING A PROPER NOTICE; SMC - ITA NOS. 2011 & 2012/AHD/ 2012 SMT. LILABEN M . PATEL & SHRI MANUBHAI B . PATEL VS. ITO AY : 2008 - 09 2 II ) THE CORRIGENDUM DATED 30 .0 8 .2012 SUBSTITUTING THE DATE OF ENTRY FROM 07.02.201 2 TO 17.0 1 .2012 IS UNTENABLE AS IT CONCERNED THE ENHANCEMENT OF LIABILITY AND NO OPPORTUNITY OF BEING HEARD WAS GIVEN BEFORE PASSING THE SAID CORRIGENDUM. III ) THE LD. CIT(A) ERRED IN CONFIRMING/ MAKING FOLLOWING ADDITIONS ON MERITS: - IN THE CASE OF SMT. LILABEN MANUBHAI PATEL A ) RS.7,20,400/ - U/S 69A OF THE ACT ; B ) RS. 5,11,600/ - U/S 69A OF THE ACT ; C ) RS. 18,60,027 U/S 69A WITHOUT ANY ENHANCEMENT NOTICE BY LD. CIT(A) FOR TRANSACTIONS OF SHRI RAMESHBHAI WHICH HAD NOT BEEN TAKEN INTO CONSIDERATION BY THE AO. D ) LEVY OF INTEREST U/S 234 B AND 234C OF THE ACT. IN THE CASE OF SHRI MANUBHAI BALDEVBHAI PATEL A ) RS.6,34,000/ - U/S 69A OF THE ACT WITHOUT ANY ENHANCEMENT NOTICE BY LD. CIT(A) ; B ) RS.10,24,000 U/S 69A OF THE ACT; C ) LEVY OF INTEREST OF RS.1,89,057/ - U/S 234 B OF THE ACT. 3. LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, CONTENDS THAT IN THE PAPER - BOOK ADDITIONAL GROUN DS ARE RAISED IN BOTH THE CASES WHICH ARE BEING NOT PRESSED; HENCE DISMISSED ACCORDINGLY. 4. BRIEF FACTS ARE IN BOTH THE CASES DEPARTMENT GOT INFORMATION FROM BANKS U/S. 133(6) OF THE ACT TO THE EFFECT THAT CASH AMOUNTS WERE DEPOSITED IN THEIR ACCOUNTS. SHOW - CAUSE NOTICES EXPLAINING THE SOURCE OF THE DEPOSITS WERE ISSUED ; AND IN THE CASE OF SMT. LILABEN MANUBHAI PATEL A LIST OF 39 PERSONS WHO HAVE DEPOSITED THE AMOUNT BELOW RS.19 , 500/ - TOTALING TO RS.7,20,400/ - , WAS FURNISHED . THE LD. ASSESSING OFFICER AFTER EXAMINING THE SMC - ITA NOS. 2011 & 2012/AHD/ 2012 SMT. LILABEN M . PATEL & SHRI MANUBHAI B . PATEL VS. ITO AY : 2008 - 09 3 SAME ACCEPTED THE ASSESSEES VERSION EXCEPT TO TH E TUNE OF RS.5,37,500/ - . OUT OF REMAINING DEPOSITS, THE ASSESSEE FILED CASH FLOW STATEMENT WHICH , ACCORDING TO ASSESSING OFFICER , WAS UNSUBSTANTIATED AND THIS AMOUNT WAS ALSO ADDED. 4.1 AGGRIEVED, THE ASSESSEE PREFERRED THE FIRST APPEAL, WHERE ACCORDI NG TO THE LD. CIT(A) AN ENHANCEMENT NOTICE VIDE ORDER - SHEET ENTRY DATED 07.02.2012 WAS ISSUED. THE RE AFTER, LD. CIT(A) ENHANCED THE INCOME OF SMT. LILABEN MANUBHAI PATEL AS UNDER: - THE TOTAL CREDIT DEPOSITED IN THE BANK ACCOUNT BY WAY OF CHEQUES FROM MR. RAMESHBHAI IS RS. 1 8,60,627/ - . THE SOURCE OF THIS MONEY IS UNEXPLAINED. AS THE APPELLANT HAS NOT COME OUT WITH THE TRUTH ABOUT THESE TRANSACTIONS AND HAS NOT OWNED UP, NO BENEFIT OF TELESCOPING OR WORKING OUT PEAK IS BEING GIVEN. THE ENTIRE AMOUNT OF RS. 18,60,627/ - IS ADDED TO THE TOTAL INCOME OF THE APPELLANT AS UNEXPLAINED MONEY U/S 69A OF THE IT ACT AND THE INCOME IS ACCORDINGLY ENHANCED. I DO NOT AGREE ALSO WITH THE CASH FLOW STATEMENT TRIED TO BE SUBMITTED BY THE APPELLANT AS HE HAS NOT COME OUT WITH THE TRUTH AND THE CASH FLOW STATEMENT ITSELF IS A MADE UP STORY. THEREFORE, THE ENTIRE DEPOSIT IN THE BANK ACCOUNT IS HELD UNEXPLAINED. HOWEVER, I AGREE WITH THE APPELLANT THAT THE ADDITION IS NOT JUSTIFIED U/S 68 AS NO BOOKS OF ACCOUNTS HAV E BEEN MAINTAINED AND THE CASH FLOW WAS TRIED TO BE MADE JUST TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT. THE ADDITION IS THEREFORE HELD TO BE MADE U/S 69A AS THE APPELLANT IS FOUND TO BE THE OWNER OF M ONEY WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE SOURCE IS UNEXPLAINED. THE ORDER IS MODIFIED ACCORDINGLY AND THIS ORDER MERGES WITH THE ORDER OF THE AO. 4.2 SIMILARLY, IN THE CASE OF SHRI MANUBHAI BALDEVBHAI PATEL, THE LD. ASSESSING OFFICER ON SIMILAR REASONING ADDED THE AMOUNT OF RS.6 ,00,000/ - TOWARDS THE DEPOSITS AND RS.10,24,000/ - IN RESPECT OF THE CASH FLOW STATEMENT FILED; THUS, AGGREGATE ADDITION OF RS.16,24,000/ - WAS MADE. ASSESSEE PREFERRED FIRST APPEAL, WHERE AGAIN THE SIMILAR COURSE OF ACTION WAS FOLLOWED AND IT IS HELD THAT ENHANCEMENT NOTICE WAS GIVEN VIDE ORDER SHEET ENTRY DATED 07.02.2012. THEREAFTER, LD. CIT(A) CONFIRMED THE ADDITION AND FURTHER ENHANCED THE INCOME BY FOLLOWING OBSERVATIONS: - SMC - ITA NOS. 2011 & 2012/AHD/ 2012 SMT. LILABEN M . PATEL & SHRI MANUBHAI B . PATEL VS. ITO AY : 2008 - 09 4 THIS SHOWS CLEARLY THAT THESE ACCOUNTS WERE MEANT TO BE USED FOR DOING UNDISC LOSED TRANSACTIONS IN SHARES WITH UNDISCLOSED MONEY. ALL THE EXPLANATIONS NOW BEING GIVEN ARE FALSE AND CONCOCTED AND FAIL TEST OF HUMAN PROBABILITIES AS GIVEN BY THE HON'BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL 214 ITR 801 AND SHREELEKHA BENARJEE 49 ITR 112. LIKE IN THE CASE OF SHREELEKHA BENARJEE. THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT CANNOT BE BELIEVED TO BE CASH RECEIVED FROM SO MANY DIFFERENT PERSONS OF EXACTLY SAME AMOUNT IN MOST OF THE CASES AS CLAIMED. ALMOST 80 PEOPLE COMING FORWARD WITH AROUND RS. 20,000/ - EACH TO HELP A FAMILY IN MEDICAL DISTRESS CAN BE BELIEVED; BUT IT IS BEYOND COMPREHENSION THAT SO MANY PEOPLE WILL HELP THE FAMILY TO EARN UNDISCLOSED SHARE INCOME BY ADVANCING INTEREST FREE AMOUNTS WITHOUT ANY SECURITY. THE GROUND OF APPEAL IS DISMISSED. THE AO HAD ACCEPTED SOURCES OF DEPOSITS TO THE TUNE OF RS. 34,000/ - IN THE BANK ACCOUNT WHICH WERE TRIED TO BE EXPLAINED AS SOURCED FROM 2 PERSONS. AS DISCUSSED ABOVE, THE WHOLE EXPLANATION IS HELD CONCOCTED AND UNBELIEVABLE AND EV EN THESE LOANS ARE HELD TO BE PART OF IT. THE ENHANCEMENT NOTICE WAS GIVEN VIDE ORDER - SHEET AS DISCUSSED EARLIER; AND THE ADDITION IS ENHANCED BY RS 34,000 / - HOLDING ALL THE DEPOSITS IN THE BANK ACCOUNT AS BEING FROM UNDISCLOSED AND UNEXPLAINED SOURCES. I DO NOT AGREE ALSO WITH THE CASH FLOW STATEMENT TRIED TO BE SUBMITTED BY THE APPELLANT AS HE HAS NOT COME OUT WITH THE TRUTH AND THE CASH FLOW STATEMENT ITSELF IS A MADE UP STORY. THEREFORE, THE ENTIRE DEPOSIT IN THE BANK ACCOUNT IS HELD UNEXPLAINED. HOWEVER, I AGREE WITH THE APPELLANT THAT THE ADDITION IS NOT JUSTIFIED U/S 68 AS NO BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED AND THE CASH FLOW WAS TRIED TO BE MADE JUST TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT. THE ADDITION IS THEREFORE HELD TO BE MADE U/S 69A AS THE APPELLANT IS FOUND TO BE THE OWNER OF MONEY WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE SOURCE IS UNEXPLAINED. THE ORDER IS MODIFIED ACCORDINGLY AND THIS ORDER MERGES WITH THE ORDER OF THE AO. 4.3 AGGRIEVED, THE ASSESSEE S ARE NOW IN APPEAL BEFORE US. 5. LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, CONTENDS THAT THE ENHANCEMENT NOTICE AS CLAIMED TO BE GIVEN BY THE LD. CIT(A) IS NOT CORRECT AS IT WAS BROUGHT TO HIS NOTICE THAT THE ASSESSEE HAS NOT RECEIVED ANY ENHANCEMENT NOTICE ON 07.02.2012. ASSESSEE APPROACHED LD. CIT(A) THAT THERE WERE PATENT MISTAKE S IN HIS ORDER INASMUCH AS THEY HAVE NEITHER RECEIVED ANY ENHANCEMENT NOTICE ON 07.02.2012 NOR THE ASSESSEE WAS HEARD ON THIS ISSUE. THEREAFTER, BEHIND THE BACK OF THE ASS ESSEE, A CORRIGENDUM WAS ISSUED BY THE LD. CIT(A) NARRATING AS UNDER: - SMC - ITA NOS. 2011 & 2012/AHD/ 2012 SMT. LILABEN M . PATEL & SHRI MANUBHAI B . PATEL VS. ITO AY : 2008 - 09 5 CORRIGENDUM IN THE APPEAL ORDER NO.CIT(A)/GNR/323/2010 - 11 DATED 15.06.2012, ON PAGE 3, P ARA. 5 OF THE ORDER THE LINE . VIDE ORDER SHEET ENTRY DATED 7/2/2012 MAY BE READ AS . VIDE ORDER SHEET ENTRY DATED 17/01/2012 . COPY OF THE ORDER SHEET IN TWO PAGES IS ANNEXED AS PART OF THE APPELLATE ORDER. 5.1 THIS APART, THERE ARE OTHER FOLLOWING INCONSISTENCIES IN THE ORDERS OF THE ASSESSING OFFICER AND LD. CIT(A): - I ) ASSESSEE HAS FILED CONFIRMATION FROM ALL THE CREDITORS BUT NOTICES WERE ISSUED TO RANDOM BASIS ON SOME OF THEM AND SOME WERE NOT CALLED AT ALL. IT IS SETTLED LAW THAT THE ADDITION U/S 68 OR 69 OF THE ACT CANNOT BE MADE WITHOUT MAKING EFFORT OF CALLING THESE PARTIES. II ) LD. CIT(A) NOT ONLY CONFIRMED THESE ADDITIONS BUT ENHANCED INCOME BY ADDING THE AMOUNT ON WHICH LD. ASSESSING OFFICER WAS SATISFIED TO BE GENUINE CASH CREDITS. III ) THE ASSESSEES PLEA THAT ALL THE CASH CREDITORS SHOULD BE CALLED AND EXAMINED HAS NOT BEEN CONSIDERED. IV ) THERE ARE IRREGULARITIES IN THE ENHANCEMENT NOTICE. V ) PROPER REASON FOR REJECTING THE ASSESSEES CASH FLOW STATEMENT HAS NOT BEEN GIVEN. 5.2 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE IMPUGNED ADDITIONS MAY EITHER BE DELETED OR ALTERNATIVELY, THE IMPUGNED ISSUE S MAY BE SET ASIDE AND RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER PROVIDING ADEQUATE OPPORTUN ITY OF HEARING TO THE ASSESSEE . 6. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LD. CIT(A). SMC - ITA NOS. 2011 & 2012/AHD/ 2012 SMT. LILABEN M . PATEL & SHRI MANUBHAI B . PATEL VS. ITO AY : 2008 - 09 6 7. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN MY CONSIDERED VIEW, THE INCONSISTENCIES AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE EMERGE FROM THE RECORD. UNDER THESE CIRCUMSTANCES, DELETING THE ADDITI ON WILL BE A HARSHNESS ON REVENUE AND IT WILL BE JUST AND PROPER TO SET ASIDE THE ISSUE RAISED BY THE ASSESSEE BACK TO THE FILE OF THE LD. ASSESSING OFFICER TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 8 . IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1 4 T H JUNE , 201 6 AT AHMEDABAD. SD/ - R.P. TOLANI ( JUDICIAL MEMBER ) AHMEDABAD; DATED 1 4 / 0 6 /201 6 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD