R.C.Udayakumar, CHENNAI V. ITO, Dindigul

ITA 2206/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9179 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: B SIVARAMAN
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , #'$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.2206/MDS/2015 # % &% / ASSESSMENT YEAR : 2008-09 SHRI. R.C. UDAYAKUMAR, PROP. R.C. JEWELLERS, NO.17, MAIN ROAD, DINDIGUL 624 001. VS. THE INCOME TAX OFFICER, WARD I(2), DINDIGUL. [PAN AADPU 9498H] ( / APPELLANT) ( /RESPONDENT) '( ) * / APPELLANT BY : SHRI. B. SIVARAMAN, ADVOCATE +,'( ) * /RESPONDENT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. ! ) - / DATE OF HEARING : 31-05-2016 ./& ) - / DATE OF PRONOUNCEMENT : 08-06-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, MADU RAI, IN ITA NO.310/2010-11, DT 21.09.2015 FOR THE ASSESSMENT YE AR 2008-2009 ITA NO.2206/MDS/2015. :- 2 -: PASSED U/S.143(3) R.W.S. 147 AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE HAS RAISED THE GROUNDS AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN WRONG LY CONSIDERING THE ADDITION UNDER THE HEAD OTHER SOURCES AND OVERLOOKED WEIGHTED AVERAGE METHOD OF VALUATION OF STOCK AND ALSO ERRED ON QUANTUM VALUATION WITHOUT ANY CREDIBLE EVIDENCE AND FURTHER VIOLATED THE PRINCIPLES OF NATURAL JUSTICE WITHOUT CONSIDERING A DJOURNMENT REQUEST OF THE ASSESSEE FOR SUBMITTING THE INFORMATION. 3. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A PROPRIETOR OF M/S. R.C. JEWELERS. THERE WAS A SURVEY OPERATIO N CONDUCTED ON 26.03.2008. SUBSEQUENT TO SURVEY, NOTICES U/S.142( 1) AND 148 OF THE ACT WERE ISSUED. IN RESPONSE TO ABOVE NOTICES, THE ASSESSEE FILED RETURN OF INCOME ON 01.12.2009 WITH TOAL INCOME OF >11,02,480/-. THE LD. AUTHORISED REPRESENTATIVE APPEARED FROM TIME TO TIME AND THE CASE WAS DISCUSSED. THE LD. ASSESSING OFFICER FOUND THA T ASSESSEE HAS OFFERED DIFFERENCE IN STOCK TO THE EXTENT OF 1185 G RAMS IN GOLD JEWELLERY AND 18817 GRAMS IN SILVER ARTICLES, VALUE D AT >9,50,000/- AND >4,42,000/- RESPECTIVELY AS PER THE PREVAILING MARK ET RATE ON THE DATE OF SURVEY AND THE ASSESSEE HAS ADOPTED THE VALUE OF ARTICLES BASED ON MONTHLY SALES AND PURCHASES FOR CALCULATION OF WEI GHTAGE AVERAGE ITA NO.2206/MDS/2015. :- 3 -: METHOD IN VALUING CLOSING STOCK FROM EARLIER YEARS AND THERE IS NO CHANGE IN ACCOUNTING SYSTEM AND PRODUCED BILLS, IN VOICES OF PURCHASES FOR VERIFICATION. THE LD. AUTHORISED REP RESENTATIVE EXPLAINED THE METHOD ADOPTED FOR VALUATION OF GOLD JEWELLERY AND SILVER ARTICLES. THE LD. ASSESSING OFFICER CONSIDERED ASSESSEE SUBMI SSIONS AND EXAMINED BOOKS OF ACCOUNT, PURCHASE BILLS AND RELIE D ON THE SWORN STATEMENT RECORDED IN SURVEY OPERATIONS AND FOUND DIFFERENCE IN VALUE OF GOLD JEWELLERY AND SILVER ARTICLES AND CALCULAT ED DIFFERENTIAL VALUE OF STOCK IN COMPARISON WITH SURVEY STATEMENT >5,23,833 /- ADDED TO THE RETURNED INCOME AND PASSED ASSESSMENT ORDER U/S.143 (3) R.W.S. 147 OF THE ACT DATED 29.12.2010. AGGRIEVED BY THE ORDE R, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX ( APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE ALLEGED THAT LD. ASSESSING OFFICER MADE ADDITION OF UNEXPLAINED INVESTMENT OF >5,23,833/- WITHOUT CONSI DERING THE METHOD ADOPTED BY THE ASSESSEE AND REITERATED THE SUBMISS IONS OF THE ASSESSMENT PROCEEDINGS. FURTHER THE APPEAL WAS POS TED FOR HEARING ON 22.07.2015 AND THE LD. AUTHORISED REPRESENTATIVE REQUESTED FOR SOME TIME TO VERIFY THE STATEMENT RECORDED IN SURVE Y OPERATIONS AND THE CASE WAS ADJOURNED TO 26.08.2015. THE LD. AUTH ORISED REPRESENTATIVE WAS PROVIDED WITH COPY OF SWORN STA TEMENT ON THE ITA NO.2206/MDS/2015. :- 4 -: SAID DATE OF HEARING. THE LD. AUTHORISED REPRESENT ATIVE AGAIN SOUGHT TIME TO CHECK THE RATES ADOPTED BY LD. ASSESSING OF FICER IN VALUATION AND FINALLY ON 16.09.2015, ASSESSEE REQUESTED TIME FOR SUBMISSION AND FILED ADJOURNMENT LETTER STATING THAT THE LD. AUTHORISED REPRESENTATIVE WAS BUSY WITH PROFESSIONAL WORK. BUT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) RELIED ON THE INFORMATION ON RECORD AND OBSERVATION OF THE ASSESSING OFFICER AN D SWORN STATEMENT ON VALUE OF STOCK AND FINALLY CONCURRED WITH FINDIN GS OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL WITHOUT PROVIDING AN OPPORTUNITY TO THE ASSESSEE. AGGRIEVED BY THE COMMISSIONER OF IN COME TAX (APPEALS) ORDER, THE ASSESSEE ASSAILED AN APPEAL BE FORE TRIBUNAL. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE REITER ATED THE SUBMISSIONS MADE BEFORE ASSESSING OFFICER AND APPEL LATE PROCEEDINGS AND EVIDENCE FILED BEFORE COMMISSIONER OF INCOME T AX (APPEALS). THE LD. AUTHORISED REPRESENTATIVE REQUESTED TIME FO R ONE MORE HEARING ON CLARIFICATIONS OF THE SWORN STATEMENT P ROVIDED IN THE APPELLATE PROCEEDINGS. THE LD. COMMISSIONER OF IN COME TAX (APPEALS) HAS NOT CONSIDERED THE ADJOURNMENT REQUE ST AND PROCEEDED RELYING ON THE OBSERVATION OF ASSESSING OFFICER AN D FURTHER NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO SUBMIT DETAILS WHICH ARE IN THE NATURE OF CLARIFICATORY EXPLANATION ON THE F INDINGS OF THE SWORN ITA NO.2206/MDS/2015. :- 5 -: STATEMENT. THE ASSESSEE WAS DENIED OPPORTUNITY OF HEARING AND IT IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND PRAY ED FOR ALLOWING THE APPEAL. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) AND OPPOSED THE GROUNDS. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD. BEFORE GOING INTO THE MERITS, WE FIND THAT THE LD AUTHORISED REPRESENTATIVE MADE A REQUEST BEFORE COMMISSIONER OF INCOME TAX (APPEALS) ON THE DATE OF HEARING FOR A COPY OF SWOR N STATEMENT AND FURTHER REQUESTED FOR ONE MORE OPPORTUNITY FOR HEAR ING FOR SUBMITTING THE CLARIFICATIONS ON THE RATES ADOPTED BY THE LD. ASSESSING OFFICER. ON THE DATE OF HEARING ON 16.09.2015 THE ASSESSEE FIL ED A LETTER FOR ADJOURNMENT OF CASE AS THE LD. AUTHORISED REPRESEN TATIVE WAS BUSY IN PROFESSIONAL WORK, BUT LD. COMMISSIONER OF INCOME T AX (APPEALS) DENIED THE ADJOURNMENT REQUEST AND PROCEEDED WITH THE DISPOSAL OF THE APPEAL. WE ARE OF THE OPINION THAT PRINCIPLES O F NATURAL JUSTICE IS A CONCEPT OF COMMON LAW AND REPRESENTS HIGHER PROCEDU RAL PRINCIPLES DEVELOPED BY THE COURTS, WHICH EVERY JUDICIAL, QUAS IJUDICIAL AND ADMINISTRATIVE AGENCY MUST FOLLOW IN TAKING ANY DEC ISION ADVERSELY AFFECTING THE RIGHTS OF ASSESSEE AND OPPORTUNITY OF BEING HEARD IS THE ITA NO.2206/MDS/2015. :- 6 -: MOST IMPORTANT COMPONENT OF THE PRINCIPLES OF NATUR AL JUSTICE WERE ADEQUATE AND PROPER OPPORTUNITY OF HEARING SHOULD B E PROVIDED TO ENSURE FAIR HEARING AND FAIR DEAL TO THE ASSESSEE . THEREFORE, ASSESSEE SHOULD BE PROVIDED WITH ONE MORE OPPORTUNI TY BEFORE COMMISSIONER OF INCOME TAX (APPEALS) TO SUBSTANTIAT E HIS CASE WITH FACTUAL EVIDENCE AND CLARIFICATIONS, AND WE REMIT T HE ENTIRE DISPUTED ISSUE TO THE FILE OF COMMISSIONER OF INCOME TAX (A PPEALS) FOR FRESH ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 8TH DAY OF JU NE, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' ) (G. PAVAN KUMAR) / JUDICIAL MEMBER / CHENNAI 1 / DATED:8.06.2016 KV 2 ) +#-34 54&- / COPY TO: 1 . '( / APPELLANT 3. ! 6- () / CIT(A) 5. 4 9: +#-# / DR 2. +,'( / RESPONDENT 4. ! 6- / CIT 6. :;% < / GF