Nimish Sudhirchandra Shroff, Surat V. The Income tax Officer,Ward-3(4), Surat

ITA 2049/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89727 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: HARDIK V VORA
• Keywords: Principle of natural justice; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER . ITA. NO. 2049 /AHD/20 1 1 (ASSESS MENT YEAR: 2 00 8 - 0 9 ) NIMISH SUDHIRCHANDRA SHROFF B - 704, MEGH MAYUR MALHAR COMPLEX, B/H. SNEH SANKUL WADI, ADAJAN, SURAT APPELLANT VS. INCOME - TAX OFFICER, WARD 3(4), SURAT RESPONDENT PAN: AH PPS9706B / BY APPELLANT : SHRI HARDIK V. VORA, A.R. / BY RESPONDENT : SHRI NARENDRA SINGH, SR. D.R. / DATE OF HEARING : 0 2 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 22 . 0 7 .201 5 ORDER PER SHAILENDRA KUMAR YADAV, J . M : THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME - TAX (A) - II , SURAT , DATED 1 2 .07. 20 1 1 FOR A.Y. 200 8 - 0 9 ON FOLLOWING GROUNDS: 1. AS REGARDS ADDITIONS OF RS 11,90,000/ - . I T A NO . 2049 /AHD/ 1 1 A.Y. 0 8 - 0 9 [ NIMISH S. SHROFF VS. IT O ] PAGE 2 1.1 THE LD CIT(A) WAS NOT JUST AND PROPER ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING THE ADDITION MADE TO THE TOTAL INCOME OF THE APPELLANT (NIMISH SHROFF) ON ACCOUNT OF DEPOSITS MADE BY THE JOINT ACCOUNT HOLDER SHRI ASHVIN CHANDRA K SHROFF IN THE JOINT SAVINGS ACCOUNT WITH THE PEOPLES BANK DESPI TE SUBMISSION OF DULY NOTARISED AFFIDAVIT OF SHRI ASHVINCHANDRA K SHROFF AND DETAILS OF SOURCES OF THE FUNDS. 1.2 THE LD CIT(A) WAS NOT JUST AND PROPER ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING THE ADDITION MADE TO THE TOTAL INCOME OF THE APPELLAN T (NIMISH SHROFF) ON ACCOUNT OF DEPOSITS MADE BY THE JOINT ACCOUNT HOLDER SHRI ASHVIN CHANDRA K SHROFF IN THE JOINT SAVINGS ACCOUNT WITH THE PEOPLES BANK WHERE NONE OF THE ENTRIES BELONG TO THE APPELLANT EXCEPT THE NAME OF THE APPELLANT AS JOINT HOLDER OF THE ACCOUNT. 1.3 THE LD CIT(A) WAS NOT JUST AND PROPER ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING THE ADDITION MADE TO THE TOTAL INCOME OF THE APPELLANT (NIMISH SHROFF) ON ACCOUNT OF DEPOSITS MADE BY THE JOINT ACCOUNT HOLDER SHRI ASHVIN CHANDRA K S HROFF IN THE JOINT SAVINGS ACCOUNT WITH THE PEOPLES BANK BY PRESUMING THAT THE FUNDS DEPOSITED BELONGS TO APPELLANT DESPITE CATEGORICAL OWNING UP OF THE FUNDS BY THE JOINT HOLDER SHRI ASHVINCHANDRA K SHROFF. 1.4 THE LD CIT(A) WAS NOT JUST AND PROPER ON TH E FACTS OF THE CASE AND IN LAW IN CONFIRMING THE ADDITION MADE TO THE TOTAL INCOME OF THE APPELLANT (NIMISH SHROFF) ON ACCOUNT OF DEPOSITS MADE BY THE JOINT ACCOUNT HOLDER SHRI ASHVIN CHANDRA K SHROFF IN THE JOINT SAVINGS ACCOUNT WITH THE PEOPLES BANK WHER E THE LD ASSESSING OFFICER DID NOT APPLY ANY OF THE PROVISIONS FOR MAKING THE ADDITION. 2. AS REGARDS ADDITIONS ON ACCOUNT OF INCOME FROM SHARES TRANSACTIONS (RS 94,161/ - ). I T A NO . 2049 /AHD/ 1 1 A.Y. 0 8 - 0 9 [ NIMISH S. SHROFF VS. IT O ] PAGE 3 2.1 THE LD CIT(A) WAS NOT JUST AND PROPER ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING THE INCOME F ROM SHARES TRANSACTIONS IN THE CASE OF APPELLANT WHERE THE TRANSACTIONS WERE ON ACCOUNT OF SHRI ASHVINCHANDRA K SHROFF. 2. ASSESSEE IS INDIVIDUAL HAVING INCOME FROM DIFFERENT SOURCES WHICH INCLUDE INCOME FROM BROKERAGE, INTEREST, R ENTAL AND JOB WORK. ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND PROCEEDINGS WERE TAKEN UP ACCORDINGLY. DURING COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED TO EXPLAIN DETAILS AND SOURCE OF FUNDS OF RS.11,90,000/ - DEPOSITED BY CASH IN SB ACCOUNT NO. 14500 WITH SURAT PEOPLE CO - OPERATIVE BANK, WHICH WAS A JOINT SB ACCOUNT IN THE NAME OF ASSESSEE AND HIS UNCLE SHRI ASHWINCHANDRA KANTILAL SHROFF. ASSESSEE SUBMITTED AN AFFIDAVIT OF HIS UNCLE INTER ALIA STATING THAT FUNDS DEPOSITED IN SB ACCOUNT AND RE LATED TRANSACTION BELONG TO HIM EXCLUSIVELY. THE CONCERNED ASSESSING OFFICER DISREGARDED THE AFFIDAVIT AND REJECTED THE EXPLANATION FURNISHED ON BEHALF OF ASSESSEE SUPPORTED BY AFFIDAVIT. AS STATED ABOVE, FUNDS OF RS. 11,90,000/ - DE POSI TED BY CASH IN SAID JOINT ACCOUNT IS SUBJECT MATTER BEFORE US. WE FIND THAT IN AFFIDAVIT, JOINT OWNER OF ASSESSEES UNCLE, SHRI ASHWINCHANDRA KANTILAL SHROFF STATED THAT HE HAS SOLD HIS SHOP AND HOUSE IN THE YEA R 2004 FOR RA.10,11,000/ - [SHOP RS.4,80,000/ - AND HOUSE - RS.5 ,30,000/ - ] AND OUT OF THE SALE PROCEEDS, A SMALL HOUSE WAS PURCHASED FOR RS.2,77,000/ - AND THE REMAINING AMOUNTS WERE GIVEN ON LOANS TO VARIOUS PERSONS TO EARN INTEREST AND FURTHER HIS NEPHEW HAVING KNOWLEDGE OF SHARES AND AT HIS ADVICE, THE FUNDS SO, AVA ILABLE WITH HIM WERE DEPOSITED IN THE I T A NO . 2049 /AHD/ 1 1 A.Y. 0 8 - 0 9 [ NIMISH S. SHROFF VS. IT O ] PAGE 4 BANK ACCOUNT. SINCE, HE HAS NOT ANY TAXABLE INCOME, SO HE HAS NOT FILING ANY RETURN OF INCOME FOR THE LAST 8 OR 10 YEARS. CONCERNED ASSESSING OFFICER DID NOT ACCEPT THE STORY OF JOINT ACCOUNT AND DEPOSITED BY UNCLE O F ASSESSEE. EVEN THOUGH UNCLE OF ASSESSEE STATED THAT HE HAS DEPOSED BY WAY OF AFFIDAVIT, THAT SAID AMOUNT OF RS.11,90,000/ - BELONGS TO HIM BUT SAME WAS NOT ACCEPTED. T HE CONTENTS OF AFFIDAVIT SHOULD NORMALLY BE REJECTED BY CONFRONTING THE SAME TO THE DE PONENT, W HICH HAS NOT BEEN DONE IN THIS CASE. IT IS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BECAUSE OPPORTUNITY OF HEARING IS ESSENCE OF PRINCIPLE OF NATURAL JUSTICE, IT SHOULD NOT BE SACRIFICED AT ANY COST. UNFORTUNATELY, SAME HAS BEEN DONE IN THIS CAS E BY REJECTING THE CONTENTIONS OF AFFIDAVIT, WHICH IS NOT JUSTIFIED. TAKING OVER ALL VIEW OF SITUATION, WE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO ASSESSING OFFICER WITH DIRECTION TO DECIDE THE SAME AFTER PROVIDING DUE OPPORT UNITY OF HEARING TO ASSESSEE. SINCE, WE ARE RESTORING THE ISSUE ON PRELIMINARY ISSUE, SO, WE ARE REFRAINING TO COMMENT ON MERIT OF ISSUE AT HAND. 2.1 NEXT ISSUE IS WITH REGARDS TO ADDITION OF RS.94,161/ - BEING UNDISCLOSED INCOME FROM SHARES TRANSACTION S. ASSESSEES ONLY A R G U MENT ON THIS ISSUE WAS THAT SINCE THE DEPOSITS AND INVESTMENTS PERTAIN TO HIS UNCLE, SHRI ASHWINCHANDRA KANTILAL SHROFF, THE SAME CANNOT BE ADDED TO HIS INCOME. THIS A R G U MENT WAS NOT ACCEPTED BY REVENUE AUTHORITIES BECAUSE THEY HA VE ALREADY HELD THAT UNDISCLOSED SOURCES OF ASSESSEE. SINCE, WE HAVE RESTORED THE ISSUE OF I T A NO . 2049 /AHD/ 1 1 A.Y. 0 8 - 0 9 [ NIMISH S. SHROFF VS. IT O ] PAGE 5 RS.11,90,000/ - TO ASSESSING OFFICER AS STATED ABOVE, SO, IN THIS BACKGROUND, WE RESTORE THIS TO ASSESSING OFFICER AS WELL, WITH DIRECTION TO DECIDE THE SAME AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO ASSESSEE. AS STATED EARLIER, SINCE, WE ARE RESTORING THE ISSUE ON PRELIMINARY ISSUE, SO, WE ARE REFRAINING TO COMMENT ON MERIT OF ISSUE AT HAND. 3. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSE. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF JULY , 201 5 . SD/ - SD/ - (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22 /0 7 /2015 TRUE C OPY S.K.SINHA / COPY OF ORDER FORWARDED TO: - 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. BY ORDER / , / ,