SHRI. DINESH KHEMABHAI PATEL, MUMBAI V. INCOME TAX OFFICER, WARD 25(3)(2), MUMBAI

ITA 2131/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1550 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 20-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 06-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Assessee Lawyers: KASHYAP VAIDYA
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D,MUMBAI BEFORE SHRI D. MANMOHAN (VICE-PRESIDENT) & SHRI RAJANDRA SINGH (ACCOUNTANT MEMBER) I.T.A. NO.2131/MUM/2009 (A.Y. :2005-06 ) SHRI DINESH KHEMABHAI PATEL, A-104, PLUTO APARTMENTS, RAM MANDIR COMPOUND, SVP RD., BORIVLI(W),MUMBAI-400 092. PAN: AACPP6815A VS. INCOME-TAX OFFICER, WARD 25(3)(2), C-11 BLDG., 3 RD FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400 051. APPELLANT RESPONDENT APPELLANT BY SHR I KASHYAP VAIDYA. RESPONDENT BY SHRI D URGESH SUMROTT. O R D E R PER D. MANMOHAN, VICE-PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT PER TAINS TO ASST. YEAR 2005-06. 2. AT THE TIME OF HEARING, LD. COUNSEL APPEARING O N BEHALF OF THE ASSESSEE SUBMITTED THAT ONLY GROUND NO. 2 IS THE MATERIAL GR OUND WHICH READS AS UNDER : (2) THE LEARNED CIT(APPEALS) HAS ERRED IN SUSTAINI NG, PARTLY, THE DISALLOWANCES MADE BY THE ASSESSING OFFICER ON ACCOUNT OF : (A) A SUM OF RS.17,29,508/- U/S.68 OF THE INC OME-TAX ACT, 1961 BY WAY OF TREATING LOANS TAKEN AS UNEXPLA INED CASH CREDITS WITHOUT CONSIDERING THE ADDITIONAL EVIDENCE FILED BEFORE THE LEARNED COMMISSIONER OF INCOME-TAX (APPE ALS). (B) A SUM OF RS.19,090/- ON ACCOUNT OF DIFFE RENCE BETWEEN THE AMOUNT OF TDS CERTIFICATES ENCLOSED AND THE AMOUNT OF LABOUR CHARGES RECEIVED. 3. THE LD. COUNSEL DID NOT PRESS GROUND NO.2(B) AND HENCE THE ORDER OF THE CIT(A) ON THAT ISSUE IS UPHELD. 4. AS REGARDS GROUND NO.2(A), THE CASE OF THE LD. COUNSEL IS THAT AN ADDITION U/S.68 OF THE ACT WAS MADE BY THE AO WITHOUT GIVING THE ITA 2131/M/09 DINESH K.PATEL 2 ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD T O PROVE HIS CASE THAT MOST OF THE CREDITS PERTAIN TO EARLIER YEARS AND OTHER CRED ITS DO NOT CALL FOR CONSIDERATION U/S.68 OF THE ACT. FOR EXAMPLE, ADVANCE RECEIVED AG AINST SALE OF FLAT CANNOT BE ADDED U/S.68. HE FURNISHED ADDITIONAL EVIDENCE BEFO RE LD. CIT(A) VIDE LETTER DATED 15-12-2008 WHEREIN HE EXPLAINED AS UNDER : THE APPELLANT HAS OBTAINED LOAN CONFIRMATION FROM ALL THE PERSONS MENTIONED IN THE STATEMENT. MOST OF THE LENDERS ARE ASSESSED TO INCOME-TAX. MOREOVER, A SUM OF RS.3,60,000/- HAS B EEN RECEIVED AS ADVANCE TOWARDS SALE OF FLAT, WHICH IS SHOWN UND ER LOANS & ADVANCES BUT IS NOT A LOAN. WE ENCLOSE HEREWITH THE COPY OF AGREEMENT OF SALE OF FLAT FOR YOUR KIND CONSIDERATI ON. THE ABOVE LOAN CONFIRMATIONS COULD NOT BE PRODUCED BEFORE THE LEARNED AO BECAUSE OF THE CIRCUMSTANCES WHICH WERE BEYOND THE CONTROL OF THE APPELLANT AND WHICH ARE NARRATED IN THE LETTER OF WRITTEN SUBMISSIONS TO BE FILED ALONG WITH THIS. WE ON BEHALF OF THE APPELLANT, MOST HUMBLY PRAY YOU R HONOUR TO KINDLY ADMIT, ADJUDICATE UPON AND ALLOW THE ABOVE A DDITIONAL EVIDENCE AND OBLIGE. HOWEVER, THE LD. CIT(A) IGNORED THE REQUEST OF THE ASSESSEE AND WITHOUT ADMITTING THE ADDITIONAL EVIDENCE MERELY DIRECTED T HE AO TO LOOK INTO THE BALANCE SHEET OF THE PRECEDING YEAR IN RESPECT OF THE CLAIM OF LOANS TAKEN IN THE EARLIER YEAR AND THUS DID NOT ADJUDICATE THE OTHER ISSUES S UCH AS AVAILABILITY OF CONFIRMATION LETTER, ETC. 5. ON THE OTHER HAND, THE LD. D.R. SUBMITTED THAT T HE ASSESSEE HAS NOT CO- OPERATED WITH THE AO AND THUS THERE IS NO NEED FOR THE LD. CIT(A) TO ADMIT FRESH EVIDENCE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. IT IS NOT THE CASE OF THE ASSESSEE, AT THIS STAGE, THAT THE AO HAS NOT GIVEN SUFFICIENT OPPORTUNITY; THE CASE OF THE ASSESSEE IS THAT THE ITA 2131/M/09 DINESH K.PATEL 3 ADDITIONAL EVIDENCE PRODUCED BEFORE THE CIT(A) OUGH T TO HAVE BEEN ADMITTED UNDER RULE 46A. IF ADDITIONAL EVIDENCE IS NOT ADMIT TED, THE LD. CIT(A) OUGHT TO HAVE FURNISHED REASONS FOR NON-ADMISSION SO THAT TH E ASSESSEE COULD EXPLAIN PROPERLY AS TO WHETHER THE REASONS FOR NON-ADMISSIO N OF ADDITIONAL EVIDENCE ARE IN ACCORDANCE WITH LAW OR NOT. IN THE INSTANT CASE, THE LD. CIT(A) COMPLETELY IGNORED TO TAKE NOTICE OF THE ADDITIONAL EVIDENCE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IN THE INTERESTS OF SUBSTANTIA L JUSTICE THE MATTER REQUIRES TO BE SENT BACK TO THE CIT(A), WHO IS DIRECTED TO GIVE THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARD. SUFFICE TO SAY THAT THE LD. C IT(A) SHOULD CONSIDER THE ADDITIONAL EVIDENCE IN ACCORDANCE WITH LAW. IF THER E ARE NO JUSTIFIABLE REASONS FOR ADMISSION OF THE ADDITIONAL EVIDENCE, THE LD. CIT(A ) HAS TO PASS A SPEAKING ORDER SO THAT A SUPERIOR FORUM CAN CONSIDER THE CORRECTNE SS OF THE REASONS MENTIONED THEREIN. WITH THESE OBSERVATIONS, THE ISSUE CONCERN ING THE DISALLOWANCE U/S.68 OF THE ACT, OTHER THAN RS.6,97,688/-, IS HEREBY SET AS IDE TO THE FILE OF CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 4TH DAY OF JUNE, 2010. SD/- SD/- (RAJENDRA SINGH) (D. MANMOHAN) ACCOUNTANT MEMBER VICE-PRESIDENT MUMBAI: 4TH JUNE, 2010. NG: ITA 2131/M/09 DINESH K.PATEL 4 COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-XXV,,MUMBAI. 4 CIT, MC-25,MUMBAI. 5.DR,D BENCH,MUMBAI. 5. MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA 2131/M/09 DINESH K.PATEL 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 31-05-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 02-06-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER