HIRALAL GOYAL, NAVI MUMBAI V. ITO WD 22(3)(1), MUMBAI

ITA 2378/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3467 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 15-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANUJ KISNADWALA SHRI V
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 50C; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI . . , , , BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I.T.A. NO.2378/M/14 ( / ASSESSMENT YEAR: 2007-08) SHRI HIRALAL GOYAL B-3-15-1-4, ASHTA BHUJA APARTMENT, SECTION-15, VASHI, NAVI MUMBAI - 400703 / VS. INCOME TAX OFFICE WARD 22(3)(1) MUMBAI. ./ ./ PAN/GIR NO. : AFAPG2215E ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 04.01.2015 /DATE OF PRONOUNCEMENT: 22.01.2016 / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED AGAINST THE ORDER DATED 29.01.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES:- ASSESSEE BY: SHRI VIJAY MEHTA & ANUJ KISNADWALA DEPARTMENT BY: SHRI VIJAY SONI ITA NO.2378/MUM/14 A.Y. 2007-08 2 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN PASSING THE IMPUGNED ORDER IN VIOLATION OF THE PRINCIPLES OF THE NATURAL JUSTICE. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT HOLDING THAT THE REOPENING OF THE ASSESSMENT BY ISSUING OF NOTICE U/S. 148 OF THE ACT WAS ILLEGAL AND BAD IN LAW. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DECIDING THE APPEAL AS PER THE PROVISION OF SECTION 250(6) OF THE ACT. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION AMOUNTING TO RS.5,00,000/- ON ACCOUNT OF UNEXPLAINED INCOME. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE AMOUNTING TO RS.30,50,146/- ON ACCOUNT OF PAYMENT MADE AS CIDCO CHARGES. 6. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADVANCES RECEIVED AMOUNTING TO RS.1,16,90,000/- AS UNEXPLAINED CASH CREDIT. 7. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION AMOUNTING TO RS.1,99,604/- ON ACCOUNT OF UNEXPLAINED INCOME. 3. THE ASSESSEE IS AN INDIVIDUAL AND DID NOT FILE HIS RETURN. THEREAFTER, DURING THE PROCEEDING OF SCRUTINY ASSESSMENT OF ONE OF THE ASSESSEE, SMT. PYARIBAI KAPURCHAND JAIN FOR THE A.Y.2007-08. IT ITA NO.2378/MUM/14 A.Y. 2007-08 3 WAS NOTICED THAT THE ASSESSEE HAS OFFERED THE TAX ON LONG TERM CAPITAL GAIN ON THE SALE OF PLOT NO.106, ADMEASURING 6349.47 SQ.MTRS. IN SECTION NO. 28, NERUL, NAVI MUMBAI OF RS.3,34,83,700/-. THE PLOT WAS SOLD TO ONE M/S. METRO DEVELOPERS OF VASHI, NAVI MUMBAI AS PER AGREEMENT DATED 03.11.2006 EXECUTED BY PYARIBAI K. JAIN AND M/S. METRO DEVELOPERS (PURCHASER) 110 PAREKH BUILDING, NEAR RLY. STATION, CHEMBUR (E), MUMBAI -71, FOR A TOTAL CONSIDERATION OF RS.4,60,37,500/-. THE ASSESSEE DID NOT FURNISH THE STAMPED DOCUMENT OF THE SALE OF LAND. ON FURTHER INVESTIGATION, THE ASSESSEE CAME UP WITH MOU DATED 20.10.2006 EXECUTED AMONG THE ASSESSEE, M/S PERFECT ASSOCIATES AND M/S. METRO DEVELOPERS WHICH SHOWS THAT THE TOTAL CONSIDERATION FOR THE LEASE WAS OF RS.9,70,37,500/- TO WHICH THE ASSESSEE WAS ENTITLED TO RECEIVE AN AMOUNT OF RS.4,60,37,500/- AND THE BALANCE AMOUNT OF RS.5,10,00,000/- WAS PAYABLE TO M/S. PERFECT ASSOCIATE AS THE CONFIRMING PARTY. THE COPY OF THE AGREEMENT DATED 03.11.2006 EXECUTED UPON THE STAMP PAPER OF RS.100/- BY THE ASSESSEE AND M/S. METRO DEVELOPERS, SPEAKS REFERENCE OF M/S. PERFECT ASSOCIATES, B0-3,15/1/4, SECTOR 15, VASHI, NAVI MUMBAI, AS THE CONFIRMING PARTY OR OTHERWISE. THIS CLEARLY SHOWED THAT BOTH THE ASSESSEE AND M/S. METRO DEVELOPERS WANTED TO HIDE THE IDENTITY OF M/S. PERFECT ASSOCIATE, THEREFORE THE ADDITION U/S 50C WAS PROPOSED. ITA NO.2378/MUM/14 A.Y. 2007-08 4 THE GENUINENESS OF THE AMOUNT PAID TO MR. HIRALAL NANDLAL GOYAL, PROP. M/S. PERFECT ASSOCIATES HAS NOT BEEN PROVED. BESIDES, ON ENQUIRY WITH THE OFFICE IT WAS ASCERTAINED THAT SHRI HIRALAL N. GOYAL, PROP. M/S. PERFECT ASSOCIATES, PAN:AFAPG2215E HAS NOT FILED RETURN OF INCOME FOR A.Y.2007-08 AND THE AMOUNT OF RS.5,10,00,000/- HAS NOT BEEN OFFERED FOR TAX. ALL THIS GOES TO PROVE THAT M/S. PERFECT ASSOCIATES, PROPRIETOR SHRI HIRALAL N. GOYAL WAS A DUMMY IDENTITY TO HIDE THE ACTUAL GAIN AND SIPHON AWAY RS.5.10 CRORES BY DIVERTING MONEY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD GIVEN PAN OF SHRI HIRALAL N. GOYAL, PROPRIETOR OF M/S. PERFECT ASSOC. AS AAFTG2215E, WHICH TURNED OUT TO BE INVALID. THEREAFTER, THE CORRECT PAN WAS OBTAINED. BOTH M/S. METRO DEVELOPERS (PAN- AANFM5380Q) AND SHRI HIRALAL NANDLAL GOYAL PROP. OF M/S. PERFECT ASSOCIATES (PAN-AAFTG2215E) AND ASSESSED IN CIT-22 CHARGES. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAS TAKEN THE NUMBER OF GROUNDS OF APPEAL BUT THE LEARNED REPRESENTATIVE OF THE ASSESSEE DID NOT ARGUE THE CASE ON MERITS BUT TOOK THE PLEA THAT THE NOTICES DATED 09.07.2013 AND 20.01.2014 WERE NOT SERVED UPON THE ASSESSEE THEREFORE, NO OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESSEE AND THE ORDER IN QUESTION HAS BEEN PASSED EX-PARTE, THEREFORE, IN THE SAID CIRCUMSTANCES THE ORDER IN QUESTION IS LIABLE TO BE SET ASIDE AND THE CIT(A) IS LIABLE TO BE DIRECTED TO PASS AN ORDER AFTER GIVING PROPER ITA NO.2378/MUM/14 A.Y. 2007-08 5 OPPORTUNITY OF BEING HEARD IN THE INTEREST OF JUSTICE. HOWEVER, ON THE OTHER HAND THE LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTIONS. ORDER DATED 29.01.2014 PERUSED WHICH SPEAKS THAT THERE IS NOTHING ON RECORD WITH REGARD TO THE SERVICE OF NOTICES DATED 09.07.2013 AND 20.01.2014. HOWEVER THE ORDER IN QUESTION ALSO SPEAKS THAT NUMBER OF NOTICES HAVE BEEN RECEIVED BY THE ASSESSEE BUT AFTER SERVICE NO ACTION WAS TAKEN. THE EX-PARTE ORDER AGAINST THE ASSESSEE IS REQUIRED TO BE PASSED AFTER THE SERVICE OF THE LAST NOTICE DATED 20.01.2014 WHEREAS THERE IS NOTHING ON RECORD WITH REGARD THE SERVICE OF NOTICE DATED 20.01.2014. EX-PARTE ORDER SEEMS TO BE EFFECTIVE OF THE LAST NOTICE MAY BE SERVED UPON THE ASSESSEE. IT IS ALSO OBSERVED THAT THE ASSESSEE WANTED TO ADDUCE THE ADDITIONAL EVIDENCE IN SUPPORT OF HIS CLAIM. ANYHOW, ORDER IN QUESTION DATED 29.01.2014 HAS BEEN PASSED BY THE CIT(A) EX-PARTE WITHOUT SERVICE OF LAST NOTICE DATED 20.01.2014. AN OPPORTUNITY OF BEING HEARD AND TO ADDUCE THE ADDITIONAL EVIDENCE IS REQUIRED TO BE GIVEN TO THE ASSESSEE IN THE INTEREST OF NATURAL JUSTICE. . SINCE THE ORDER IN QUESTION HAS BEEN PASSED IN THE ABSENCE OF REPRESENTATIVE OF THE ASSESSEE WITHOUT SERVICE OF NOTICE THEREFORE IN THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT ORDER IN QUESTION IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW. THEREFORE, WITHOUT COMMENTING UPON THE MERITS OF THE CASE WE SET ASIDE THE ORDER IN QUESTION DATED 29.01.2014 AND DIRECT THE CIT(A) TO PASS THE ORDER AFRESH AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ITA NO.2378/MUM/14 A.Y. 2007-08 6 ASSESSEE AND TO PROVIDE AN EFFECTIVE OPPORTUNITY TO ADDUCE THE ADDITIONAL EVIDENCE IN SUPPORT OF HIS CLAIM IN ACCORDANCE WITH LAW. 3. ACCORDINGLY THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY , 2016. SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 22 ND JANUARY, 2016 MP / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI