GIRISH CHANDMAL LODHA, MUMBAI V. ASST CIT 25(2), MUMBAI

ITA 2034/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88538 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 09-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 14-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI , ,, , !' !' !' !' '''# '''# '''# '''#$ $$ $ % % % % BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBERITA ITA NO. : 2033/MUM/2013 (ASSESSMENT YEAR: 2004-05) ITA NO. : 2034/MUM/2013 (ASSESSMENT YEAR: 2005-06) GIRISH CHANDMAL LODHA, 9 , , , () 9, MANOHAR NIWAS, KASTURBA ROAD, BORIVALI EAST, MUMBAI- 400 066 .: PAN: ABEPL 9958 K VS ACIT-25(2), R. NO. 108, 1 ST FLOOR, C-11, PRATYAKSHA KAR BHAVAN, BKC, BANDRA-EAST, MUMBAI -400 051 ! (APPELLANT) '#! (RESPONDENT) ! $% & APPELLANT BY : SHRI NARESH JAIN ' #! $% & RESPONDENT BY : SHRI PAVAN KUMAR BEERLA ' %( ) /DATE OF HEARING : 09-02-2015 *+, %( ) / DATE OF PRONOUNCEMENT : 04-03-2015 & & & & ORDER '''# '''# '''# '''# , , , , : :: : PER VIVEK VARMA, JM: INSTANT APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS OF CIT(A)-35, MUMBAI, DATED 14.12.2012, RAISING THE FOLLOWING GROUNDS: ASSESSMENT YEAR : 2004-05 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE HON. CIT-A-35, MUMBAI ERRED IN CONFIRMI NG THE ASSESSMENT OF THE LONG TERM CAPITAL GAINS OF RS . 33,48,960/- AS UNEXPLAINED CASH CREDIT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HON. CIT-A-35, MUMBAI ERRED IN NOT ALLO WING CROSS-EXAMINATION OF MR. VIPIN PATEL, WHOSE STATEME NT GIRISH CHANDMAL LODHA, ITAS 2033 AND 2034/M/2013 2 WAS NOT RECORDED U/S 131 OF THE ACT AND RELIED UPON BY THE LOWER AUTHORITIES. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW THE AFORESAID GROUNDS OF APPEAL. ASSESSMENT YEAR : 2005-06 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE HON. CIT-A-35, MUMBAI ERRED IN CONFIRMI NG THE ASSESSMENT OF THE LONG TERM CAPITAL GAINS OF RS . 22,17,000/- AS UNEXPLAINED CASH CREDIT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HON. CIT-A-35, MUMBAI ERRED IN NOT ALLO WING CROSS-EXAMINATION OF MR. VIPIN PATEL, WHOSE STATEME NT WAS NOT RECORDED U/S 131 OF THE ACT AND RELIED UPON BY THE LOWER AUTHORITIES. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW THE AFORESAID GROUNDS OF APPEAL. 2. THE GROUNDS OF APPEAL ARE IDENTICAL ON IDENTICAL FACTS, THEREFORE, WE ARE DISPOSING OFF THE APPEAL THROUGH THIS COM MON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE FACTS ARE, THAT INSTANT PROCEEDINGS ARE THE SEC OND ROUND. IN THE FIRST ROUND, THE COORDINATE BENCH AT THE ITAT IN MUMBAI IN ITAS NO. 6955 AND 6956/MUM/2007 IN THE IMPUGNED YEARS HAD SET ASIDE THE ORDER OF THE CIT(A) AN D DIRECTED THE AO TO FRAME THE ASSESSMENT AFRESH. 4. IN THE SECOND ROUND THE AO FRAMED THE ASSESSMENT S AGAINST WHICH THE ASSESSEE APPROACHED THE CIT(A). 5. THE CIT(A) AFTER CONSIDERING THE ENTIRE FACTS OBSERVE, I HAVE CONSIDERED THE ASSESSMENT ORDERS, OBSERVATI ON OF CIT(A)S ORDER DATED 11.9.2007, OBSERVATIONS OF HON 'BLE ITAT VIDE ORDER DATED 15.9.2009, REMAND REPORT OF T HE A.O. AND THE APPELLANT'S SUBMISSION. AFTER CONSIDER ING THE RIVAL STAND THE CASE IS DISCUSSED AND DECIDED I N SUBSEQUENT PARAGRAPHS: 12.1 IN THIS CASE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WERE COMPLETED ON 17/06/2006 TREATING THE LONG TERM CAPITAL GAIN ON SALE OF JEWELLERY BY THE APPEL LANT AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT. ON APPEAL THE LD. CIT(A) ALLOWED RELIEF TO THE APPELLANT STAT ING THAT THE A.O. DID NOT SUBMIT REMAND REPORT ON THE ADDITI ONAL EVIDENCES WITHIN THE TIME GRANTED. ON FURTHER APPEA L BY THE DEPARTMENT, THE HON'BLE ITAT BY ORDER DATED 5/9/2009 SET ASIDE THE ORDERS OF THE LD. CIT(A) ON THE GROUND THAT SUFFICIENT TIME WAS NOT ALLOWED TO THE A.O. GIRISH CHANDMAL LODHA, ITAS 2033 AND 2034/M/2013 3 FOR EXAMINING THE ADDITIONAL EVIDENCES AND RESTORED THE MATTER BACK TO THE FILE OF THE A.O. FOR MAKING FRES H ASSESSMENTS. DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT DID NOT APPEAR, AND, THEREFORE THE A.O. COMPLETED THE ASSESSMENTS BY TREATING THE SALES PROCEEDS OF JEWELLERY AS UNEXPLAINED CASH CREDITS A S DONE IN THE ORIGINAL ASSESSMENTS AND ALSO RELIED ON THE ENQUIRY CONDUCTED BY HIM DURING THE COURSE OF REMAN D PROCEEDINGS. AGGRIEVED BY THE SAME, THE APPELLANT PREFERRED AN APPEAL. 12.2 AFTER HEARING THE APPELLANT, MY PREDECESSOR REMANDED THE MATTER BACK TO THE A.O. WITH A DIRECTI ON TO PROVIDE ADEQUATE OPPORTUNITY TO THE APPELLANT REGAR DING EVIDENCES COLLECTED BY THE A.O. DURING THE COURSE O F REMAND PROCEEDINGS AND AFTER CONSIDERING THE SUBMISSIONS OF THE APPELLANT, SUBMIT THE REMAND REP ORT. 12.3 DURING THE COURSE OF SECOND REMAND PROCEEDINGS , THE APPELLANT, VIDE LETTER DATED 18/05/2011, WAS AS KED BY THE A.O. TO PROVIDE THE ORIGINAL BILLS/DOCUMENTS IN SUPPORT OF CLAIM OF SALE OF GOLD JEWELLERY, AND THE INCOME-TAX RETURN/WEALTH TAX RETURN OF HIS MOTHER T O SHOW THAT JEWELLERY PERTAINED TO HER. IN THIS REGAR D, THE APPELLANT FILED WRITTEN SUBMISSION BEFORE A.O. IT W AS STATED BY THE APPELLANT THAT ORIGINAL BILLS/DOCUMEN TS OF THE SALE OF DIAMONDS ARE MISSING. HOWEVER THE APPEL LANT ENCLOSED COPIES OF BILLS. IT WAS STATED BY THE APPE LLANT THAT HIS MOTHER EXPIRED ON THE YEAR 2002. SHE WAS DEFINITELY FILING HER RETURNS. THE APPELLANT W SEAR CHING FOR HER INCOME TAX/ WEALTH TAX RETURNS WHICH WILL T AKE SOME TIME SINCE THE MATTER IS NEARLY A DECADE OLD. HOWEVER, NO DOCUMENTARY EVIDENCES WERE PRODUCED BEFORE A.O. DESPITE REPEATED GRANT OF TIME BY THE A .O. IT WAS STATED BY THE APPELLANT THAT HE DID NOT HAVE AN Y FURTHER EVIDENCE TO SUPPORT HIS CLAIMS. IN FACT THE APPELLANT DID NOT FILE ANY FURTHER EVIDENCE BEFORE A.O. EVEN IN SECOND ROUND OF REMAND PROCEEDING. THUS IT CAN BE SEEN THAT A.O. HAD GIVEN ENOUGH OPPORTUNITIES TO THE APPELLANT TO PRODUCE NECESSARY ORIGINAL DOCUMENTS. 12.4. IT MAY FURTHER BE RECALLED HERE THAT THE APPE LLANT HAS FAILED TO REBUT THE OBSERVATIONS OF A.O. WHICH HAS BEEN GIVEN AGAINST THE APPELLANT. THE FINDINGS OF T HE A.O. ARE QUESTION OF FACTS AND THE APPELLANT COULD NOT FILE ANY REBUTTAL AGAINST THE SAME DURING THE SECOND ROU ND OF APPELLATE PROCEEDING ALSO. 12.4.1 IT MAY BE SEEN THAT THE COPIES OF THE BILLS THAT BILL NO. 321 WAS DATED 25/11/2003 WHILE BILL NO 284 WAS DATED 05/12/2003 WHICH IS NOT POSSIBLE IN CASE OF NORMAL BILLING. APPELLANT ALSO HAD NOT FURNISHED WE ALTH TAX RETURN OR INCOME TAX RETURN OF HIS MOTHER, TO S HOW THAT HIS MOTHER WAS HOLDING THE SAID DIAMONDS, NEIT HER DURING ASSESSMENT NOR DURING APPELLATE PROCEEDINGS. 12.4.2 THE A.O. HAD ALLOWED OPPORTUNITY TO THE APPE LLANT VIDE LETTER DATED 16/08/2007 TO PRODUCE THE ORIGINA L BILLS AND DOCUMENTS IN SUPPORT OF HIS CLAIM TO GIVE HIM THE OPPORTUNITY OF HEARING. 12.4.3 DUE TO THE DISCREPANCY IN THE COPIES OF THE BILLS OF SALE AND TO GIVE A FAIR CHANCE TO THE APPELLANT ALS O, LETTER FOR PRODUCING EVIDENCE U/S 133(6) WERE DISPATCHED O N GIRISH CHANDMAL LODHA, ITAS 2033 AND 2034/M/2013 4 THE SAME DATE TO M/S RAJANU TRADERS, SURAT TO WHOM CLAIM OF SALE OF DIAMONDS HAD BEEN MADE BY THE APPELLANT., 12.4.4 THE APPELLANT FURNISHED BEFORE AO., COPY OF HIS NEW INDIA COOP LTD, BORIVLI A/C, ORIGINALS OF SALE BILLS AND COPY OF WILL OF MOTHER AND DOCUMENT RELATING TO HIS COURT CASE WITH VINAYAK HOUSING SOCIETY. HOWEVER, T HE APPELLANT HAD NOTHING TO EXPLAIN ON THE FACT THAT B ILL NO. 321 WAS DATED 25/11/2003 WHILE BILL NO 284 WAS DATE D 05/12/2003 WHICH WAS NOT POSSIBLE IN CASE OF NORMAL BILLING. APPELLANT ALSO COULD NOT FURNISH ANY EVIDE NCE EVEN DURING SECOND ROUND OF APPELLATE PROCEEDING IN RESPECT OF WEALTH TAX RETURN OR INCOME TAX RETURN T O SHOW THAT HIS MOTHER WAS HOLDING THE SAID DIAMONDS. 12.4.5 APPELLANT'S BANK ACCOUNT REFLECTED THE CASH DEPOSITS OF RS 55,65,960/- ON THE SAME DATES ON WHI CH SALE HAD BEEN MADE. 12.4.6 IN FACT, THE LETTER SENT BY A.O. TO BUYERS A T SURAT ADDRESS RETURNED UNSERVED. ALTHOUGH THE APPELLANT H AD FILED A CONFIRMATION ON WHICH THE SAME ADDRESS AS O N BILLS WAS PRINTED BUT THE NAME OF THE PARTNER/PROPR IETOR WAS NOT GIVEN NOR ANY SALES TAX NUMBER OR PAN HAD BEEN WRITTEN. NO DATE WAS MENTIONED ON THIS CONFIRMATION LETTER. APPELLANT COULD NOT EXPLAIN AN Y OF THE ABOVE FACTS. 12.4.7 THE A.O. ALSO ISSUED A COMMISSION TO ACIT-9, SURAT FOR CONFIRMATION OF GENUINENESS OF TRANSACTIO N AND IDENTITY OF THE BUYER M/S RAJANU TRADERS, SURAT AS THIS WAS A HIGH DEMAND CASE AND IDENTITY OF BUYER WAS CRUCIAL CONSIDERING THE DISCREPANCIES IN THE BILLS AND ONE- PAGE, NON-DATED CONFIRMATION PRODUCED BY THE ASSESS EE. 12.4.8 IN TURN THE A.O. RECEIVED A REPLY DATED 14/09/2007 RECEIVED IN HIS OFFICE FROM ACIT-9, SURA T POINTED OUT THAT NO PAN IN NAME OF RAJANU TRADERS EXISTED IN SURAT NEITHER THE SAME PARTY COULD BE TR ACED AT THE GIVEN ADDRESS AS PER THE BILLS OF SALE. 12.4.9 FURTHER AS PER THE REPORT OF INSPECTOR OF C IRCLE-9, SURAT, IDENTITY CARD AND STATEMENT U/S 131 OF THE PERSON' RESIDING AT THE GIVEN ADDRESS, IT IS PROVED THAT NOR A PARTY IN THE NAME OF RAJANU TRADERS RESIDED F OR LAST 10 YEARS AT THE ADDRESS NEITHER THE PRESENT RE SIDENT OR ANY OF HIS RELATIVES KNEW ANYBODY BY THAT NAME. STATEMENT U/S 131 ALSO SHOWS THAT NO MEMBER OF THE FAMILY OR RELATIVES OF PRESENT RESIDENT MR. VIPIN P ATEL WERE INVOLVED IN DIAMOND TRADE. 12.5 THUS, DURING THE REMAND PROCEEDING THE A.O. DISCHARGED HIS BURDEN BY MAKING ENQUIRIES AS DESIRE D DURING THE REMAND PROCEEDING. ON THE OTHER HAND THE APPELLANT HAS FAILED TO CONCLUSIVELY REBUT THE FACT S BROUGHT IN BY THE A.O. DURING THE SECOND ROUND OF ASSESSMENT PROCEEDING BEFORE ME. 12.6 AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMS TANCES OF THE CASE, I AM NOT INCLINED TO AGREE WITH MY PREDECESSOR'S VIEW ON THE ISSUE. ON THE CONTRARY AF TER GIVING EFFECTIVE OPPORTUNITY TO THE A.O. DURING THE SECOND ROUND OF APPELLATE PROCEEDING, WHEREIN FURTHER MATE RIAL FACTS HAVE BEEN GATHERED WHICH GO AGAINST APPELLANT , IT CAN BE CONCLUDED THAT THE CASH DEPOSIT IN THE BANK GIRISH CHANDMAL LODHA, ITAS 2033 AND 2034/M/2013 5 ACCOUNT DURING THE RELEVANT FINANCIAL YEAR WERE NOT SUPPORTED BY THE ADEQUATE EVIDENCES AND DISCLOSE SOURCE OF INCOME AND THEREFORE, THE LONG TERM CAPIT AL GAIN CLAIMED BY THE APPELLANT ON THE PURPORTED SALE OF JEWELRIES CANNOT BE ACCEPTED. ACCORDINGLY, VARIOUS GROUNDS OF APPEAL FILED BY THE APPELLANT ARE DISMIS SED. 6. THE CIT(A) THUS SUSTAINED THE ORDERS OF THE AO IN BO TH THE IMPUGNED YEARS. 7. AGAINST THESE ORDERS OF THE CIT(A), THE ASSESSEE IS BEFORE THE ITAT. 8. BEFORE US, THE AR SUBMITTED THAT AS MENTIONED IN THE GOA 2, THE ASSESSEE WAS NOT ALLOWED/GIVEN OPPORTUNITY TO CON FRONT THE PERSONS WHO WERE EXAMINED. THE AR SUBMITTED THAT T HE ORDERS OF THE REVENUE AUTHORITIES THUS SUFFERED THE INFIRMIT Y AND THEREFORE THEY ARE ILLEGALITY & THEREFORE, IT WOULD BE APPRO PRIATE THAT THE CASES BE RESTORED TO THE LOWER AUTHORITIES. 9. THE DR ACCEPTED THE PROPOSITION AS SUBMITTED BY THE AR. 10. WE HAVE HEARD THE SUBMISSIONS AND PURSUED THE OR DERS OF THE REVENUE AUTHORITIES. WE FIND THAT ENTIRE EVIDENCE AGAIN ST THE ASSESSEE WAS COLLECTED AND USED AGAINST THE ASSESSEE W ITHOUT CONFRONTING THE SAME TO THE ASSESSEE OR ALLOWING THE ASS ESSEE TO REBUT THEM. 11. WE, THEREFORE ARE OF THE OPINION THAT SINCE THE ORDE RS PASSED BY THE REVENUE AUTHORITIES CONTAINS THE EVIDENCE S WHICH WERE NOT IN THE KNOWLEDGE OF THE ASSESSEE OR WAS NOT C ONFRONTED TO THE ASSESSEE MADE THE PROCEEDINGS INFIRM, HENCE THE O RDERS MUST BE SET ASIDE. WE THEREFORE, SET ASIDE THE ORDERS OF THE CIT(A) IN BOTH THE IMPUGNED YEARS AND DIRECT THE AO TO R EFRAME THE ASSESSMENT DE NOVO , NEEDLESS TO MENTION THAT ADEQUATE AND PROPER OPPORTUNITY IS ALLOWED TO THE ASSESSEE TO PRESEN T HIS CASE. GIRISH CHANDMAL LODHA, ITAS 2033 AND 2034/M/2013 6 12. GROUNDS NO. 1 & 2 ARE THEREFORE ALLOWED FOR STATISTIC AL PURPOSES IN BOTH THE ASSESSMENT YEARS IMPUGNED BEFORE US. 13. IN THE RESULT, ITA NO.2033/MUM/2013 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2034/MUM/2013 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2015. SD/- SD/- ( ) ( '''# '''# '''# '''# ) . . . . /'% /'% /'% /'% . . . . (B R BASKARAN) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 04/03/2015 '/ COPY TO:- 1) ! / THE APPELLANT. 2) '#! / THE RESPONDENT. 3) THE CIT(A) -35, MUMBAI. 4) THE CIT-25, MUMBAI/CIT -25, MUMBAI. 5) / THE D.R. G BENCH, MUMBAI. 6) 0 1' COPY TO GUARD FILE. 2.3 / BY ORDER / / TRUE COPY / / 4 / % 5% 2% 6%, , ' DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS