Sri. DEEPAK P. DADLANI, MUMBAI V. ITO INT. TAX-1(1), MUMBAI

ITA 2492/MUM/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56265 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-04-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 30-03-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Notional interest; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 2492 /MUM/ 2007 I.T.A. NO. 2105/MUM/2010 (ASSESSMENT YEAR 2003 - 04 ) DEEPAK P. DADLANI C/O. MS. SHINEY BADLANI 602, AASHIRWAD CHS PL OT 675, 16 TH CROSS ROAD KHAR, MUMBAI - 400 052. VS. ITO, INT.T - 1(1) SCINDIA HOUSE BALLARD ESTATE MUMBAI - 400 038. ( APPELLANT ) .. ( RESPONDENT ) PAN NO. AACPD0104C ASSESSEE BY : SHRI M. SUBRAMANIAN DEPARTMENT BY : SHRI B.S. BIST DATE OF HEARING : 8.3 . 201 6 DATE OF PRONOUNCEMENT : 8 . 3 . 201 6 O R D E R PER B.R. BASKARAN, A M : - THE ASSESSEE HAS FILED THESE APPEALS. THE APPEAL NUMBERED AS 2492/MUM/2007 RELATES TO THE QUANTUM ASSESSMENT PROCEEDINGS AND OTHER APPEAL RELATES TO THE PENALTY PROCEEDING S. BOTH APPEALS RELATE TO A.Y. 2003 - 04. 2. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY LEARNED CIT(A) - XXXI, MUMBAI IN QUANTUM ASSESSMENT PROCEEDINGS. FOLLOWING ISSUES ARE URGED IN THIS APPEAL : - A) ADDITION OF RS. 1 .50 CRORES MADE U/S. 68 OF THE ACT B) DETERMINATION OF ANNUAL VALUE OF THE FLATS BY COMPUTING NOTIONAL INTEREST ON ADVANCES ISSUED BY THE ASSESSEE. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS A NON - RESIDENT. THE FIRST ISSUE RELATES TO THE ADDITION OF RS. 1.50 CRORES MADE BY THE ASSESSING OFFICER U/S. 68 OF THE ACT. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS INTRODUCED CAPITAL OF RS. 1.50 CRORES IN HIS BOOKS OF ACCOUNT. IT DEEPAK P. DADLANI 2 WAS NOTICED THAT THE ASSESSEE HAS INTRODUCED THE CA PITAL BY PASSING A JOURNAL ENTRY BY INVOLVING TWO COMPANIES NAMELY M/S. HAGEMEYER TRADING CO.(P) AND M/S. PINTA INTERNATIONAL LTD. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS NOT DISCHARGED INITIAL BURDEN OF PROOF PLACED UPON HIM U/S. 68 OF THE ACT. ACCORDINGLY THE ASSESSING OFFICER ASSESSED THE AMOUNT OF RS. 1.50 CRORES AS INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. LEARNED CIT(A) ALSO CONFIRMED THE SAME. 4. AT THE TIME OF HEARING, IT WAS BROUGHT TO OUR NOTICE BY LEARNED AR THAT THE ASSESS EE HAS MOVED A PETITION BEFORE THE TRIBUNAL SEEKING ADMISSION OF ADDITIONAL EVIDENCES. LEARNED COUNSEL SUBMITTED THAT THESE ADDITIONAL EVIDENCES ARE NECESSARY TO ADJUDICATE THE ISSUE IN QUESTION. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY OBJECT ION FOR ADMITTING THE ADDITIONAL EVIDENCES. ACCORDINGLY, IN THE INTEREST OF NATURAL JUSTICE, WE ADMIT THE ADDITIONAL EVIDENCES. SINCE THESE EVIDENCES REQUIRE EXAMINATION BY THE ASSESSING OFFICER AND SINCE THEY MAY HAVE EFFECT ON THE ADDITION MADE U/S. 68 OF THE ACT, WE ARE OF THE VIEW THAT THIS ISSUE SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EX AMINE THE SAME AFRESH BY DULY CONSIDERING THE ADDITIONAL EVIDENCES AND/OR ANY OTHER EVIDENCES/INFORMATION/EXPLANATION S THAT MAY BE FURNISHED BY THE ASSESSEE IN THE SET ASIDE PROCEEDINGS. AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD, THE ASSESSING OFFICER MAY TAKE AN APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 5. NEXT ISSUE RELATES TO DETERMINATION OF ANNUAL LETTING VALUE IN RESPECT OF THE PROPERTIES LET OUT BY THE ASSESSEE. THE LD A.R SUBMITTED THAT THE TAX AUTHORITIES HAVE WORKED OUT NOTION AL INTEREST ON THE ADVANCES RECEIVED BY THE ASSESSEE FOR COMPUTING ANNUAL LETTING VALUE OF FLATS LET OUT BY THE ASSESSEE . THE LEARNED COUNSEL PLACED RELIANCE ON THE DECISION RENDERED BY HON'BLE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF TIP TOP TYP OGRAPHY (368 ITR 330) AND SUBMITT ED THAT THE ACTION OF THE TAX AUTHORITIES IN ESTIMATING DEEPAK P. DADLANI 3 NOTIONAL INTEREST ON ADVANCES RECEIVE D BY THE ASSESSEE FOR DETERMINING THE ANNUAL LETTING VALUE IS AGAINST THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE A BOVE CITED CASE. WE ALSO HEARD LEARNED DEPARTMENTAL REPRESENTATIVE ON THIS ISSUE. SINCE THE ANNUAL LETTING VALUE OF THE PROPERTIES LET OUT BY THE ASSESSEE HAVE TO BE DECIDED IN ACCORDANCE WITH THE DECISION RENDERED BY HON'BLE JURISDICTIONAL HIGH COURT IN T HE ABOVE SAID CASE, WE ARE OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXAMINATION . ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE ALSO AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DETERMINE THE A NNUAL LETTING VALUE OF THE FLATS LET OUT OF BY THE ASSESSEE IN ACCORDANCE WITH THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF TIP TOP TYPOGRAPHY (SUPRA). 6. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE ASSESSEE IN THE PENALTY PROCEEDIN G. SINCE THE ADDITION S ON WHICH PENALTY WAS IMPOSED HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER, THE IMPUGNED PENALTY ORDER SHALL NOT SURVIVE. ACCORDINGLY WE SET ASIDE THE RELEVANT ORDERS OF THE TAX AUTHORITIES. HOWEVER, THE ASSESSING OFFICER MAY INITIATE PENALTY PROCEEDINGS IN THE SET ASIDE PROCEEDINGS , IF HE CONSIDER S IT NECESSARY TO DO SO, IN ACCORDANCE WITH LAW. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 08 . 3 .2016 . SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 08 / 3 /20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT DEEPAK P. DADLANI 4 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS