Magnet Trading & Chit Fund (P) Ltd., Muzaffarnagar V. ACIT, Muzaffarnagar

ITA 272/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3578 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 13-07-2011
• Assessment Year: 1985-1986
• Appeal Filed On: 17-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA SENIOR
• Assessee Lawyers: PRAKASH NARAIN
• Keywords: Opportunity of being heard; Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.272/DEL./2011 (ASSESSMENT YEAR : 1985-86) M/S. MAGNET TRADING & CHIT FUND (P) LTD., VS. ACIT, CIRCLE 1, C/O SHRI VINAY KUMAR GUPTA, MUZAFFARNAGAR (U.P.) 3, GARHI GORWAN, MOTI MAHAL, MUZAFFARNAGAR. (PAN : AAACM9620P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAKASH NARAIN, ADVOCATE REVENUE BY : SHRI A.K. MONGA, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE CIT (APPEALS), MUZAFFARNAGAR DATED 16.10.2010 FOR THE A SSESSMENT YEAR 1985- 86. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE RE AD AS UNDER :- 1. THE ORDER PASSED BY THE LEARNED C.I.T. (A), MUZ AFFARNAGAR (U.P.) IS NOT IN ACCORDANCE WITH LAW AND AGAINST TH E FACTS OF THE CASE. 2. THE LEARNED C.I.T. (A) HAS ERRED IN CONFIRMING T HE DISALLOWANCE OF RS.1,56,160.00 BEING THE LOSS SUFFE RED BY THE APPELLANT ASSESSEE IN PURCHASE/SALE OF VARIOUS SHAR ES WITHOUT GIVING ANY REASON /VALID REASONS. ITA NO.272/DEL./2011 2 3. THE LEARNED C.I.T. (A) HAS FURTHER ERRED IN CONF IRMING ABOVE ADDITION MAINLY ON THE GROUND THAT 'ONCE THE INVESTMENT IN SHARE APPLICATION HAS BEEN HELD TO BE NOT BELONG ING TO THE APPELLANT'. SIMILARLY LOSS ON SHARES, IF ANY, ALSO BELONGED TO THE THIRD PARTIES AND IN ANY CASE NOT TO THE APPELLANT. 4. THE LEARNED C.I.T. (A) HAS ALSO ERRED IN HOLDING THAT THE APPELLANT DURING THE COURSE ASSESSMENT PROCEEDINGS HAS NOT BEING ABLE TO SUBSTANTIATE ITS CLAIM OF LOSS BY WAY OF DOCUMENTARY EVIDENCE. IN ANY CASE, THE CLAIM HAS BE EN SUBSTANTIATED BEFORE C.I.T. (A). IT DOES DESERVE TO BE ALLOWED. 5. THE APPELLANT PRAYS THAT CONSEQUENTIAL RELIEFS I N LEVY OF INTEREST AND INITIATION OF PENALTY PROCEEDINGS MAY KINDLY BE ALLOWED/DROPPED. 6. THE APPELLANT SEEKS PERMISSION IN MODIFYING AND OR ADDING ANY OTHER GROUND/GROUNDS OF APPEAL AS THE CI RCUMSTANCES OF THE CASE MIGHT REQUIRE OR JUSTIFY. 2. IN THE APPEAL, THE ISSUE INVOLVED IS AGAINST THE CONFIRMATION OF ADDITION OF RS.1,56,160.00 WHICH IS CLAIMED TO BE THE LOSS S UFFERED BY THE APPELLANT IN THE PURCHASE AND SALE OF VARIOUS SHARES. LEARNED A R SUBMITTED THAT NECESSARY DOCUMENTS FILED IN THE PAPER BOOK WERE SUBMITTED BE FORE THE CIT (A) BUT HE HAS NOT TAKEN COGNIZANCE OF THE EVIDENCES SUBMITTED BEFORE HIM. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THIS IS THE SEC OND ROUND OF THE ASSESSEE AND HE HAS FAILED TO SUBSTANTIATE THE CLAIM OF LOSS BY WAY OF ANY DOCUMENTARY EVIDENCE BEFORE THE CIT (A), THEREFORE, HE HAS RIGH TLY SUSTAINED THE ADDITION. 3. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE C IT (A) HAS CONFIRMED THE ADDITION BY HOLDING AS UNDER :- 4.1 GROUND OF APPEAL NOS.11 IS AGAINST DISALLOWANC E OR LOSS CLAIMED ON SALE OF SHARES AT RS.1,56,160/-. ITA NO.272/DEL./2011 3 THE FACTS OF THE CASE AS WELL AS SUBMISSIONS MADE B Y THE APPELLANT HAS BEEN CAREFULLY CONSIDERED. IT IS OBSE RVED THAT IN THE PRECEDING PARA ADDITION MADE AT RS.3,22,000/- HAS B EEN DELETED AS THE IMPUGNED SUM REPRESENTED MONIES OF THE THIRD PARTIES AND NO ADDITION COULD BE MADE. ONCE THE INVESTMENT IN S HARE APPLICATION HAS BEEN HELD TO BE NOT BELONGING TO TH E APPELLANT, SIMILARLY LOSS ON SALE OR SHARES IF ANY ALSO BELONG ED TO THE THIRD PARTIES AND IN ANY CASE NOT TO THE APPELLANT. FURTH ER, THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM OF LOSS BY WAY OF DOCUMENTARY EVIDENCE. THUS IT IS HELD THAT THE A.O. WAS JUSTIFIED IN MAKING ADDITION AT RS.L,56,160/-. THE SAME IS HE RBY UPHELD. GROUND NO.11 IS DISMISSED. FROM THIS, WE FIND THAT THE CIT (A) HAS NOT CONSIDE RED THE EVIDENCES SUBMITTED BEFORE HIM. IN THE FIRST ROUND, THE ITAT REMANDED THE ISSUE AS UNDER :- 3. NONE HAS PUT IN APPEARANCE ON BEHALF OF THE ASS ESSEE. WE HAVE HEARD THE LEARNED D.R. AND HAVE GONE THROU GH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT WILL BE RE LEVANT THAT RATIO OF DECISION IN THE CASE OF CIT VS. MULTIPLAN INDIA (P) LTD. (SUPRA) WAS IN RELATION TO RULE 19 OF ITAT RULES AN D THAT IS NOT APPLICABLE TO THE FIRST APPELLATE AUTHORITY. T HE CIT (A) SHOULD HAVE DECIDED THE APPEAL ON MERIT IF ASSESSEE FAILED TO TURN UP. ACCORDINGLY ORDER OF THE CIT (A) IS SET A SIDE AND THE MATTER IS RESTORED TO THE FILE OF CIT (A) WITH THE DIRECTION TO DECIDE THE APPEAL AFRESH IN ACCORDANCE WITH LAW BY PASSING A SPEAKING ORDER, OF COURSE, AFTER AFFORDING AN OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. ORDER ACCORDINGLY. IN THIS ORDER, THE ITAT DIRECTED THE CIT (A) TO DEC IDE THE ISSUE AFRESH BY PASSING A SPEAKING ORDER AFTER AFFORDING AN OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THE DOCUMENTS SUBMITTED BY THE ASSESSEE BEFORE THE CIT (A) WERE ITA NO.272/DEL./2011 4 NOT CONSIDERED BY HIM IN HIS DECISION AND HE HAS SI MPLY JUSTIFIED THE ASSESSING OFFICERS ACTION. IN VIEW OF THIS MATTER , WE SET ASIDE THE ISSUE TO THE FILE OF THE CIT (A) TO PASS A SPEAKING ORDER AF TER CONSIDERING THE DOCUMENTS SUBMITTED BY THE ASSESSEE, OF COURSE AFTE R PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 15 TH DAY OF JULY, 2011. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 15 TH DAY OF JULY, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.