SHABNAM S. GULATI, MUMBAI V. JCIT CEN CIR 39, MUMBAI

ITA 2778/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3797 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 23-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of being heard
• Section: 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.2778/MUM/14 ( / ASSESSMENT YEAR: 2003-04) SHABNAM S. GULATI 603, ELCO RESIDENCY, ALMEDA PARK, BEHIND ELCO MARKET, BANDRA (WEST), MUMBAI - 400050 / VS. JCIT CENTRAL CIRCLE 39 GROUND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, CHURCHGATE, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AFRPG0718F ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 28.04.2016 !' /DATE OF PRONOUNCEMENT:10.08.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 28.02.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 39, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y. 2003-04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUE: ASSESSEE BY: SHRI HITESH M. SHAH DEPARTMENT BY: SHRI MANJUNATHA SWAMY (CIT-DR) ITA NO.2778 /M/14 A.Y. 2003-04 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 39, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT(A)) HA S ERRED IN CONFIRMING THE ADDITION MADE IN RESPECT OF OPENING CAPITAL ACCOUNT BALANCE TO THE EXTENT OF RS.23,56,524/- BY TREATING THEM AS UNEXPLAINED CAPITAL. THE APPELLANT BEING AGGRIEVED, PRAYS THAT THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CAPITAL BEING UNJUSTIFIED, UNWARRANTED, BAD IN LAW AND ILLE GAL BE DELETED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED THE ORIGINAL RETURN OF INCOME U/S.139 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) FOR A.Y.2003-04 ON 27.11.2003 DECLARING TOTAL INCOME TO THE TUNE OF RS.3,38,345/-. THE ASSESSEE WAS ENGAGED IN THE BUS INESS OF BEAUTY PARLOUR UNDER THE NAME AND STYLE OF SHABNAM BEAUTY WHICH IS A PROPRIETARY CONCERN. SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS CO NDUCTED IN THE CASE OF ONE SHRI MADAN S. KOLAMBEKAR WHO WAS DEALING IN LAN D. THE EVIDENCES GATHERED DURING THE COURSE OF THE SEARCH IN HIS CAS E INDICATED CASH PAYMENT OF RS.3.50 CRORE TO SHRI SUNIL GULATHI, THE ASSESSE ES HUSBAND. THEREAFTER, SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS CA RRIED OUT IN THE CASE OF SHRI SUNIL GULATI AND THE ASSESSEE ON 18.02.2009. ON SEARCH, IT WAS FOUND THAT SHRI SUNIL GULATI HAD NOT FILED HIS RETURN OF INCOME AFTER A.Y.2006-07 AND HIS WIFE SMT. SHABNAM HAD NOT FILED HER RETURN OF INCOME AFTER A.Y.2005-06. NOTICE U/S.153A OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE, THEREAFTER, THE FURTHER NOTICES U/S.143(2 ) AND 142(1) ALONG WITH QUESTIONNAIRE WERE ISSUE AND SERVED UPON THE ASSESS EE. THE PROPER REPLY WAS TAKEN FROM THE ASSESSEE AND INCOME OF THE ASSES SEE WAS ASSESSED TO THE TUNE OF RS.28,95,685/-. THE OPENING INCOME OF THE ASSESSEE AS ON ITA NO.2778 /M/14 A.Y. 2003-04 3 01.04.2002 WAS ASKED WHICH WAS TO THE TUNE OF RS.23 ,56,521/-, THEREFORE THE SAID OPENING INCOME WAS TREATED AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT AND TREATED AS INCOME OF THE ASSESSEE. THE ASS ESSEE FILED THE APPEAL BEFORE THE CIT(A) BUT THE CIT(A) HAS CONFIRMED THE SAID ORDER OF THE ASSESSING OFFICER HENCE THE ASSESSEE FILED THE PRES ENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE ONLY PO INT WHICH HAS BEEN RAISED BEFORE US IS IN CONNECTION WITH THE ADDITION OF RS. 23,56,524/-U/S 69 OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT THE AS SESSEE IS FILING HER RETURN OF INCOME FOR THE PERIOD SINCE 1888-89, 1990-91, 1991- 92, 1993-94, 1995-96, 1998-99, 1999-2000 AND 2000-2001 BUT NO OPPORTUNITY OF BEING HEARD WAS GIVEN, THEREFORE THE DECISION BASED UPON THE RETURN FOR THE PERIOD W.E.F.2001- 02 TO 2002-03 IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESENTATI VE STRONGLY RELIED UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. 5. ON PERUSAL OF THE OF THE ASSESSMENT ORDER DATED 29.12.2011,IT WAS FOUND THAT AN OPPORTUNITY OF BEING HEARD WAS NOT GI VEN TO THE ASSESSEE WHILE FINALIZING THE ASSESSMENT IN THE YEAR OF 2003-04. SUBSEQUENTLY, WHEN THE APPEAL HAS BEEN FILED BEFORE CIT(A) AND OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WAS ALSO NOT GIVEN TO THE ASSESSEE. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WAS FILING THE RETURN FOR PERI OD 1888-89, 1990-91, 1991- 92, 1993-94, 1995-96, 1998-99, 1999-2000 AND 2000-2 001 CONTINUOUSLY BUT DUE TO ENABLE TO FILE THE RETURN AND SHORTAGE OF TI ME SHE FAILED TO FILE THE SAID RETURN BEFORE THE CIT(A). TO SHOW THE OPENING CAPI TAL OF RS.23,56,521/-, ITA NO.2778 /M/14 A.Y. 2003-04 4 SHE HAS CONTENDED BEFORE THE CIT(A) THAT SHE WAS RE ADY TO PRODUCED THE EVIDENCE BEFORE CIT(A) TO SUBSTANTIATE HER CLAIM. ON PERUSAL OF THE ORDER OF THE ASSESSING OFFICER DATED 29.12.2011 AND ON PE RUSAL OF THIS ORDER OF CIT(A) IN QUESTION WE FIND THAT NO OPPORTUNITY OF A NY KIND WAS GIVEN TO THE ASSESSEE TO RAISE HER CLAIM BEFORE THE AUTHORITY. 6. IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER IN QUESTION IS WRONG AGAINST LAW AND FACTS AND IS HERE BY LIABLE TO BE SET ASIDE THEREFORE WE ORDERED ACCORDINGLY. WE REMAND THE CA SE TO THE ASSESSING OFFICER TO DECIDE THE MATTER AFRESH BY GIVING AN OP PORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST , 2016. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 10 TH AUGUST, 2016 MP MP MP MP ITA NO.2778 /M/14 A.Y. 2003-04 5 ! '#$% &%# / COPY OF THE ORDER FORWARDED TO :- 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// (/') * (DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI