Shri Vijaybhai Damodardas Soni, Ahmedabad V. The Dy.CIT.,Circle-2, Ahmedabad

ITA 2805/AHD/2010

• Counselvise Citation: 280520514 RSA 2010
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 29-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: U S BHATIAR
• Keywords: Opportunity of being heard; Principle of natural justice; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. K. GARODIA , AM) ITA NO.2805/AHD/2010 (AY: 2007-08) SHRI VIJAYBHAI DAMODARDAS SONI, PROP. OF DHANUSHI JEWELLERS, 108, NATIIONAL PLAZA, C. G. ROAD, AHMEDABAD P. A. NO. AJCPS 9164 N VS THE D. C. I. T., CIRCLE- 2, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI U. S. BHATI,AR RESPONDENT BY SHRI K. C. MATHEWS, SR. DR DATE OF HEARING: 29-08-2013 DATE OF PRONOUNCEMENT: 03-09-2013 ORDER PER A. K. GARODIA : THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A) VII, AHMEDABAD DATED 0 5-08-2010, FOR THE ASSESSMENT YEAR 2007-08. 2. THE SOLE EFFECTIVE GROUND RAISED BY THE ASSESSEE IS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN NOT CANCELING THE IMPUG NED ASSESSMENT ORDER ON THE BASIS OF BAD IN LAW AND AGA INST THE PRINCIPLES OF NATURAL JUSTICE. THE APPELLANT HAS NO T BEEN ISSUED A SHOW-CAUSE NOTICE AND THE ADDITION MADE DI RECTLY IN THE IMPUGNED ASSESSMENT ORDER BY THE A. O. THE BASI C REQUIREMENT OF LAW THAT A PERSON, WHO IS LIKELY TO BE ADVERSELY AFFECTED BY AN ORDER, SHOULD HAVE AN OPPORTUNITY TO SHOW CAUSE WHY SUCH ADVERSE ORDER SHOULD NOT BE MADE. IF THE SAME HAS NOT BEEN OBSERVED BY THE A. O., THE ASSESS MENT ORDER SHALL BE ANNULLED. AS THE LD. C. I. T. (APPEA LS) ERRED IN LAW AND ON FACTS IN NOT CANCELING THE IMPUGNED ASSE SSMENT ORDER, YOUR HONOUR MAY ANNUL THE ORDER AND RESTORE THE ORIGINAL INCOME SHOWN IN THE RETURN OF INCOME. IT A NO.2805/AHD/2010 (AY- 2007-08) SHRI VIJAYBHAI DAMODARDAS SONI VS DCIT, CIR-2, AHMED ABAD 2 3. IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESS EE BEFORE US THAT THE AO HAD NOT PROVIDED ANY OPPORTUNITY TO THE ASSESSEE BE FORE MAKING THE IMPUGNED ADDITION BY DISALLOWING THE CLAIM OF THE ASSESSEE F OR SET OFF OF BROUGHT FORWARD BUSINESS LOSS BY HOLDING THAT SUCH BROUGHT FORWARD BUSINESS LOSS IS NOT BUSINESS LOSS BUT CAPITAL LOSS. HE SUBMITTED THAT SINCE NO O PPORTUNITY WAS PROVIDED BY THE AO BEFORE MAKING THE ADDITION, THE ASSESSMENT ORDER SHOULD BE ANNULLED. HE PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF TIN BOX. CO. VS CIT REPORTED IN 249 ITR 216 (SC) . AS AGAINST THIS, THE LEARNED DR FOR THE REVENUE SUPPORTED THE ORDERS OF THE AUTH ORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT AS PER THE ASSESSMENT ORDER, THERE IS NO MENTION THAT ANY OPPO RTUNITY WAS PROVIDED BY THE AO ON THIS ASPECT OF THE MATTER THAT THE CLAIM OF T HE ASSESSEE REGARDING SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS.3,74,870/- WAS IN FACT NOT BUSINESS LOSS BUT CAPITAL LOSS. WE ALSO FIND THAT THE DECISION IS TAK EN BY THE LEARNED CIT(A) ON THIS BASIS ALONE THAT HE HAS VERIFIED THE ASSESSMENT RE CORDS OF PRECEDING TWO YEARS AS PER WHICH IT WAS CLAIMED BY THE ASSESSEE THAT TH ERE WAS A BROUGHT FORWARD CAPITAL LOSS. IT MAY BE THAT THERE WAS A WRONG MONI TION IN THE RETURNS OF THOSE TWO PRECEEDING YEARS ABOUT THE NATURE OF BROUGHT FORWAR D LOSS AND HENCE, IT IS IMPORTANT TO EXAMINE THE ASSESSMENT RECORDS OF THE RELEVANT ASSESSMENT YEAR I.E. 1999-2000 AND THE ASSESSEE SHOULD BE ALLOWED A N OPPORTUNITY TO BRING THE EVIDENCES ON RECORD IN SUPPORT OF HIS CONTENTIONS T HAT IN FACT, BUSINESS LOSS WAS INCURRED IN THAT YEAR AND THAT WAS ELIGIBLE TO BE C ARRIED FORWARD AS PER THE ASSESSMENT ORDER OF THAT YEAR OR INTIMATION OF THAT YEAR OR EVEN AS PER THE CERTIFIED COPY OF RETURN OF INCOME FILED IN THAT YE AR WHICH MUST HAVE BEEN FILED BEFORE THE DUE DATE OF FILING OF RETURN. THERE IS N O FINDING OF THE LEARNED CIT(A) ALSO ON THESE ASPECTS. AS PER THIS JUDGMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF TIN BOX CO. VS CIT, (SUPRA), THE ASS ESSMENT ORDER ALONG WITH THE ORDER OF THE LEARNED CIT(A) AND OF THE TRIBUNAL WER E SET ASIDE AND THE MATTER WAS REMANDED TO THE ASSESSING AUTHORITY FOR FRESH C ONSIDERATION BECAUSE IN THAT CASE ALSO, THE ASSESSMENT ORDER WAS FRAMED WITHOUT PROVIDING REASONABLE IT A NO.2805/AHD/2010 (AY- 2007-08) SHRI VIJAYBHAI DAMODARDAS SONI VS DCIT, CIR-2, AHMED ABAD 3 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BY THE A O. ACCORDINGLY, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF THE HONBLE APEX COURT, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MAT TER BACK TO THE FILE OF THE AO FOR A FRESH DECISION AFTER PROVIDING REASONABLE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. WE WANT TO MAKE IT CLEAR THAT WITHIN THRE E MONTHS FROM THE DATE OF RECEIPT OF THIS TRIBUNAL ORDER BY THE ASSESSEE, THE ASSESSEE SHOULD APPEAR SUO MOTO BEFORE THE PRESENT AO OF THE ASSESSEE AND FURN ISH EVIDENCES IN SUPPORT OF THE ASSESSEES CLAIM THAT THERE WAS ANY CARRIED FOR WARD BUSINESS LOSS IN THE ASSESSMENT YEAR 1999-2000 WHICH IS ELIGIBLE FOR SET OFF IN THE PRESENT YEAR. THEREAFTER, THE AO SHOULD DECIDE THE ISSUE AFRESH A ND PASS NECESSARY ORDER AS PER LAW AFTER ALLOWING REASONABLE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. IF THE ASSESSEE DOES NOT BRING THE EVIDENCES ON RECORD BEFORE THE AO, AS DIRECTED BY US ABOVE, THEN THE AO IS AT LIBERTY TO PASS NECE SSARY ORDER AS PER LAW ON THE BASIS OF EVIDENCES AVAILABLE ON RECORD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03-09-2013. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. K. GARODIA) ACCOUNTANT MEMBER LAKSHMIKANTA DEKA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD IT A NO.2805/AHD/2010 (AY- 2007-08) SHRI VIJAYBHAI DAMODARDAS SONI VS DCIT, CIR-2, AHMED ABAD 4 1. DATE OF DICTATION: 30-08-2013 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 30--06-2013/02-09-13 OTHER MEMBE R: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: