Rajesh Kumar Drolia (HUF), Kolkata V. JCIT(OSD), Central Circle-XX,Kolkata, Kolkata

ITA 2737/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4564 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2013
• Court: TRIBUNAL
• Department Lawyers: K K TRIPATHI
• Assessee Lawyers: DILIP LOYALKA
• Keywords: Unexplained investment; Opportunity of being heard; Source of fund; Additional evidence

Judgement Text

1 ITA NO.2737/KOL/2013-RAJESH KUMAR DROLIA (HUF)A.Y.2 009-10 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.2737/KOL/2013 ASSESSMENT YEAR : 2009-10 RAJESH KUMAR DROLIA (HUF) -VERSUS- J.C.I.T. (OSD), CENTRAL CIRCLE-XX, KOLKATA KOLKATA (PAN:AACHR 8294 R) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI DILIP LOYALKA & MS.SHRE YA LOYALKA, AR FOR THE RESPONDENT: SHRI K.K.TRIPATHI, JCIT, SR.DR DATE OF HEARING : 10.06..2016. DATE OF PRONOUNCEMENT : 08.07.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 24.10.2012 OF CIT(A) CENTRAL-III, KOLKATA, RELATING TO AY 2009-10. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE ADS THUS: 1) FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN NO T GIVING OPPORTUNITY FOR REPRESENTATION. 2) FOR THAT UPON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN ADDING A SUM OF RS. 3,75,00,000/- AS UNDISCLOSED INVESTMENT. 3) FOR THAT UPON THE FACTS AND CIRCUMSTANCES OF THE CASE, INVESTMENT OF RS. 3,75,00,000/- WAS MADE BY M/S KAMANWALA LAKSHACHANDI TODAYS DEVEL OPERS NOT BY ASSESSEE,HOWEVER THE AO AND THE LD CIT(A) COULD NOT APPRECIATE THE SAID FACTS. 4) FOR THAT ANY GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF APPEAL. 3. THE ASSESSEE IS A HUF. THE ASSESSEE FILED RETU RN OF INCOME FOR AY 2009-10, DECLARING TOTAL INCOME OF RS.6,59,973. IN THE COUR SE OF ASSESSMENT PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961 (ACT), THE A O HAD INFORMATION FROM THE ANNUAL INFORMATION RETURN OF SUB-REGISTRAR, MUMBAI, DETAILS OF WHICH SHOWED THAT THE ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY VALUE D AT RS.3,75,00,000/- DURING THE PREVIOUS YEAR. THE AO CALLED UPON THE ASSESSEE VID E ITS LETTER DATED 14.11.2011, TO FURNISH THE DETAILS AND DOCUMENTS REGARDING THE AFO RESAID PURCHASE AND PROVE THE 2 ITA NO.2737/KOL/2013-RAJESH KUMAR DROLIA (HUF)A.Y.2 009-10 SOURCE OF FUNDS OUT OF WHICH THE AFORESAID INVESTME NTS WERE MADE. THE ASSESSEE DID NOT PROVIDE THE DETAILS OR EXPLAIN THE SOURCE. THE AO THEREFORE ADDED A SUM OF RS.3.75 CRORES TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENTS U/S.69/69-A OF THE ACT. THE AO PASSED THE ORDER OF ASSESSMENT ON 26.12.2011. 4. THE ASSESSEE FILED APPEAL AGAINST THE AFORESAID ORDER OF THE AO BEFORE CIT(A). IN THE STATEMENT OF FACTS AS WELL AS GROUNDS OF APPEAL FILED BEFORE THE CIT(A), THE ASSESSEE HAD SPECIFICALLY CONTENDED THAT THE PROPER TY IN QUESTION ACTUALLY BELONGED TO SOME OTHER PERSON AND THAT THE ASSESSEE WAS ONLY A NOMINEE AND NAME LENDER. THE ASSESSEE ALSO CONTENDED THAT THE ASSESSMENT ORDER W AS PASSED WITHOUT AFFORDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSEE HAD FURNISHED THE REQUIR ED DETAILS CALLED FOR BY THE AO ON 27.12.2011, VIDE ASSESSEES LETTER DATED 22.12.2011 , WELL BEFORE THE TIME ALLOWED BY THE AO (WHICH WAS UP TO 30.12.2011), BUT THE AO FAI LED TO CONSIDER THE REPLY OF THE ASSESSEE DATED 27.12.2011 AND THE PASSED THE ORDER OF ASSESSMENT ON 26.12.2011 ITSELF. 5. THE APPEAL BEFORE THE CIT(A) WAS FIXED FOR HEAR ING ON 23.8.2012. THE ASSESSEE VIDE ITS APPLICATION FOR ADJOURNMENT DATED 21.8.201 2 FILED ON 22.8.2012 BEFORE THE CIT(A) PRAYED FOR ADJOURNMENT ON THE GROUND OF ILLN ESS OF THE ACCOUNTANT OF THE ASSESSEE. THE CASE WAS ADJOURNED TO 20.9.2012. ON 18.9.2012, THE ASSESSEE FILED ANOTHER PETITION FOR ADJOURNMENT SEEKING TWO MONTHS TIME ON THE SAME GROUND OF ILLNESS OF ACCOUNTANT OF THE ASSESSEE. THE CIT(A) INFORMED THE ASSESSEE THAT THE ASSESSEES CASE WAS A HIGH DEMAND CASE AND HENCE LO NGER PERIOD OF TWO MONTHS TIME CANNOT BE ALLOWED AND FIXED THE HEARING FOR 5.10.20 12, SPECIFICALLY MENTIONING IN THE NOTICE OF HEARING THAT NO FURTHER TIME WILL BE ALLO WED AND IN THE ABSENCE OF COMPLIANCE, THE APPEAL WOULD BE HEARD AND DECIDED O N THE BASIS OF MATERIAL AVAILABLE ON RECORD. ON 5.10.2012, NONE APPEARED ON BEHALF O F THE ASSESSEE. THE CIT(A) THEREFORE PROCEEDED TO DECIDE THE APPEAL OF THE ASS ESSEE ON MERITS EX-PARTE. HE FOUND NO MATERIAL BEFORE HIM TO COME TO A CONCLUSION CONT RARY TO THE ONE ARRIVED AT BY THE AO AND THEREFORE CONFIRMED THE ORDER OF THE AO. 3 ITA NO.2737/KOL/2013-RAJESH KUMAR DROLIA (HUF)A.Y.2 009-10 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FO R THE ASSESSEE DREW OUR ATTENTION TO THE LETTER DATED 22.12.2011 FILED BEFORE THE AO, THE RECEIPT OF WAS ACKNOWLEDGED BY THE AO, WHEREIN THE ASSESSEE HAS SPECIFICALLY POINT ED OUT THAT THE PROPERTY REFERRED BY THE AO WAS A PROPERTY BEING FLAT NO.12, ASHA KIRAN CHS LTD., PLOT NO.17-C, LINKING ROAD EXTENSION, SANTACRUZ (WEST), MUMBAI-40 0054. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN AND BY ITS LETTER DA TED 22.12.2011, IT HAD INFORMED THE AO THAT THE AFORESAID PROPERTY WAS PURCHASED IN THE NAME OF THE ASSESSEE AND AS NOMINEE OF ONE M/S.KAMANWALA LAKSHACHANDI TODAYS D EVELOPERS, A PARTNERSHIP FIRM HAVING OFFICE AT 405/406, NEW UDYOG MANDIR-2, MOGUL LANE, MAHIM (W), MUMBAI-400016 AND THE ENTIRE CONSIDERATION OF RS.3. 75 CRORES WAS PAID BY THE SAID PARTNERSHIP FIRM. ALONG WITH THE LETTER DATED 22.1 2.2011, THE ASSESSEE HAD ALSO ENCLOSED COPIES OF THE DEED OF TRANSFER DATED 5.7.2 008 UNDER WHICH THE PROPERTY IN QUESTION WAS PURCHASED UNDER A REGISTERED DEED IN T HE NAME OF THE ASSESSEE, DECLARATION OF NOMINEE DATED 13.10.2010 BY THE ASSE SSEE ACKNOWLEDGING THAT HE WAS ONLY A NOMINEE OF THE PARTNERSHIP FIRM, DECLARATION BY THE FIRM THAT THE FIRM IN FACT INVESTED RS.3.75 CRORES FOR PURCHASE OF THE FLAT IN QUESTION IN THE NAME OF HUF AND THAT IT WAS THE REAL OWNER OF THE SAID PROPERTY, A COPY OF THE BANK ACCOUNT OF THE FIRM WITH INDIAN OVERSEAS, SANTACRUZ BRANCH AND PUNJAB N ATIONAL BANK, FORT BRANCH, FROM AND OUT OF WHICH THE SUM OF RS.3.75 CRORES WAS PAID TO THE VENDOR OF THE PROPERTY IN QUESTION, M/S.VICTORIA DEVELOPERS AND THE COPY OF T HE ACCOUNT OF M/S.VICTORIA DEVELOPERS AS PER THE BOOKS OF ACCOUNTS OF THE FIRM . SINCE THE AFORESAID DOCUMENTS WERE NOT CONSIDERED BY EITHER AO/CIT(A), THE LEARNE D COUNSEL FOR THE ASSESSEE PRAYED THAT THE SAID DOCUMENTS WHICH WERE FILED IN A PAPER BOOK FILED BEFORE US, BE ADMITTED AS ADDITIONAL EVIDENCE INVOKING THE POWERS OF THE TRIBUNAL UNDER RULE 29 OF THE ITAT RULES AND ALSO FILED A WRITTEN APPLICATION IN THIS REGARD. 7. THE LEARNED DR COULD NOT CONTROVERT THE CONTEN TIONS PUT FORTH BY THE LEARNED COUNSEL FOR THE ASSESSEE BUT RELIED ON THE ORDER OF THE CIT(A). 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE MATERIAL PRODUCED BEFORE US, WE ARE OF THE VIEW THAT THE ASSESSEE WAS NOT AFFORDED PROPER AND REASONABLE 4 ITA NO.2737/KOL/2013-RAJESH KUMAR DROLIA (HUF)A.Y.2 009-10 OPPORTUNITY OF PUTTING FORTH ITS CASE BEFORE THE AO AS WELL AS CIT(A). WE ARE ALSO OF THE VIEW THAT THE DOCUMENTS FILED BEFORE US AS ADDI TIONAL EVIDENCE CONTAINED IN THE PAPER BOOK PAGES 1 TO 35 ARE RELEVANT EVIDENCE FOR RENDERING A PROPER DECISION ON THE ISSUES INVOLVED IN THE APPEAL AND ARE THEREFORE REQ UIRE TO BE ADMITTED AS ADDITIONAL EVIDENCE. SINCE NEITHER THE AO OR THE CIT(A) HAD O PPORTUNITY TO EXAMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE ADDITIONAL EVID ENCE, WE ARE OF THE VIEW THAT IT WOULD BE JUST AND APPROPRIATE TO SET ASIDE THE ORDER OF T HE CIT(A) AND REMAND FOR FRESH CONSIDERATION BY THE AO, THE ISSUE WITH REGARD TO T HE ADDITION OF RS.3.75 CRORES, DE NOVO. WE ALSO ALLOW OPPORTUNITY TO THE ASSESSEE TO FILE SUCH OTHER EVIDENCE THAT MAY BE REQUIRED TO PROVE ITS CASE BEFORE THE AO. THE A O WILL CONSIDER THE EVIDENCE ADMITTED AS ADDITIONAL EVIDENCE AND SUCH OTHER EVID ENCE THAT THE ASSESSEE MAY FILED AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER AFFORDING THE ASSESSEE OPPORTUNITY OF BEING HEARD. THE APPEAL OF THE ASSE SSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 9. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. O RDER PRONOUNCED IN THE COURT ON 08.07.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 08.07.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.RAJESH KUMAR DROLIA (HUF), 13, BRABOURNE ROAD, 4 TH FLOOR, KOLKATA-700001. 2. J.C.I.T. (OSD), CENTRAL CIRCLE-XX, KOLKATA. 3. CIT(A)-CENTRAL-III, KOLKATA 4. CIT-CENTRAL -III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES 5 ITA NO.2737/KOL/2013-RAJESH KUMAR DROLIA (HUF)A.Y.2 009-10