MADHAVPRASAD GOVINDRAM JALAN , Mumbai V. ITO 10(1)(3), Mumbai

ITA 2914/MUM/2022

AI Insights

The case involves Madhavprasad Govindram Jalan, the appellant, who contested the additions made to his income by the Income Tax Officer (ITO) under section 68 of the Income Tax Act, 1961, for the assessment year 2011-12. The additions included bank credits aggregating to Rs. 1,08,00,000 and peak cash deposits of Rs. 4,75,000. The appellant argued that these amounts were either repayments of loans or already declared as income under different heads. The NFAC, after several opportunities for the appellant to present his case, upheld the ITO's additions due to lack of substantial evidence. The Tribunal found that the NFAC did not adequately consider the additional evidence submitted by the appellant and thus restored the matter back to the NFAC for a comprehensive re-evaluation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123348 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 29-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 15-11-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHESHANK MEHTA
• Keywords: Principle of natural justice; Additional evidence
• Section: 147; 68; 139(1); 139(4)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 2914/MUM/2022 Assessment Year: 2011-12 Madhavprasad Govindram Jalan, A/1305, 13 th floor Oberoi Exquisite, Oberoi Garden City Goregaon-E, Mumbai-400063. Vs. ITO-10(1)(3), 206, 2 nd floor, Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020. PAN No. AAKPM 0750 F Appellant Respondent Assessee by : Mr. Sheshank Mehta, AR Revenue by : Smt. Mahita Nair, DR Date of Hearing : 30/01/2023 Date of pronouncement : 23/02/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 23.09.2022 passed by the Ld. National Faceless Appeal Centre, Delhi [in short ‘the Ld. ‘NFAC’] for assessment year 2011-12, raising following grounds: 1. In the facts and circumstances of the case and in law, the Ld. erred in upholding the action of the Ld. Assessing O making addition of bank credits aggregating to Rs. 1,08,00,000/ factual and legal matrix of the case; inter a) that the amount aggregating to Rs. 1,00,00,000/ credited in amount of short term transfer from a listed public company; which was immediately repaid back to the said company. b) that the amount aggregating to Rs. 7,00,000/ represented the amount of repayment of loan by a li public company, which was earlier advanced by the Appellant to the said company. c) that the amount aggregating to Rs. 1,00,000/ already offered as income under the head of Salary by the Appellant. 2. In the facts and circumstances of the case an the Ld. Commissioner of Income Tax (Appeals) has erred upholding the action of the Id. Assessing Officer in making addition of bank credits aggregating to Rs. 1,08.00,000/ under section 68 disregarding the fact and law that in absence of Books Of can be made under section 68 of the Act. 3. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making addition of peak credit of cash deposits of Rs. 4,75,000/ under section 68 of the Act disregarding the Factual and Legal matrix of the case. 4. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making addition of peak credit of cash deposit of Rs. 4,75,000/ under section 68 of the Act disregarding the fact and law that in absence of Books Of Accounts of the Assessee, no addition can be made under se Madhavprasad Govindram Jalan 1. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing O making addition of bank credits aggregating to Rs. 1,08,00,000/-under section 68 of the Act; disregarding the factual and legal matrix of the case; inter-alia the following: a) that the amount aggregating to Rs. 1,00,00,000/ credited in Appellant's bank account represented the amount of short term transfer from a listed public company; which was immediately repaid back to the said company. b) that the amount aggregating to Rs. 7,00,000/ represented the amount of repayment of loan by a li public company, which was earlier advanced by the Appellant to the said company. c) that the amount aggregating to Rs. 1,00,000/ already offered as income under the head of Salary by the 2. In the facts and circumstances of the case an Commissioner of Income Tax (Appeals) has erred upholding the action of the Id. Assessing Officer in making addition of bank credits aggregating to Rs. 1,08.00,000/ under section 68 disregarding the fact and law that in absence of Books Of Accounts of the Assessee, no addition can be made under section 68 of the Act. 3. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making ition of peak credit of cash deposits of Rs. 4,75,000/ under section 68 of the Act disregarding the Factual and Legal matrix of the case. 4. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred ding the action of the Ld. Assessing Officer in making addition of peak credit of cash deposit of Rs. 4,75,000/ under section 68 of the Act disregarding the fact and law that in absence of Books Of Accounts of the Assessee, no addition can be made under section 68 of the Act. Madhavprasad Govindram Jalan 2 ITA No. 2914/M/2022 1. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in making addition of bank credits aggregating to Rs. under section 68 of the Act; disregarding the alia the following: a) that the amount aggregating to Rs. 1,00,00,000/- Appellant's bank account represented the amount of short term transfer from a listed public company; which was immediately repaid back to the said company. b) that the amount aggregating to Rs. 7,00,000/- represented the amount of repayment of loan by a listed public company, which was earlier advanced by the c) that the amount aggregating to Rs. 1,00,000/- was already offered as income under the head of Salary by the 2. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred upholding the action of the Id. Assessing Officer in making addition of bank credits aggregating to Rs. 1,08.00,000/- under section 68 disregarding the fact and law that in Accounts of the Assessee, no addition 3. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making ition of peak credit of cash deposits of Rs. 4,75,000/- under section 68 of the Act disregarding the Factual and 4. In the facts and circumstances of the case and in law, Commissioner of Income Tax (Appeals) has erred ding the action of the Ld. Assessing Officer in making addition of peak credit of cash deposit of Rs. 4,75,000/- under section 68 of the Act disregarding the fact and law that in absence of Books Of Accounts of the Assessee, no 5. In the facts and circumstances of the case and in law, the Ld.Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making addition of Rs. 1,08,00,000/ reason recorded. 6. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) and the Ld. Assessing Officer has erred in passing the respective impugned orders a) without providing adequate and sufficient opportunity of being heard to the Appellant; thereby violating the principles of natural justice; and b) by disregarding the submissions/explanations and documentary evidences on record. 2. Briefly stated facts of the case are that the assessee did not file regular return of income for the year under consideration within the time limit prescribed u/s 139(1) or 139(4) of the Income 1961 (in short ‘the Act’). The Ld. Assessing Officer on verification of the data available on the Income had deposited of Rs.14,00,000/ received salary of Rs.4,50,000/ however did not file return of income and therefore, he issued notice u/s 148 of the Act on 28.12.2017 competent authority u/s 151 of the Act reassessment proceedings u/s 147 of the Act. In response, the assessee filed return of income declaring salary from Mahalaxmi Seamless Ltd. during the assessment proceedings. On veri the submission of the assessee, the Assessing Officer made addition for cash deposit of Rs.4,50,000/ Madhavprasad Govindram Jalan 5. In the facts and circumstances of the case and in law, the Ld.Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making addition of Rs. 1,08,00,000/- by travelling beyond the ecorded. 6. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) and the Ld. Assessing Officer has erred in passing the respective impugned orders - a) without providing adequate and sufficient opportunity of being heard to the Appellant; thereby violating the principles of natural justice; and b) by disregarding the submissions/explanations and documentary evidences on record. Briefly stated facts of the case are that the assessee did not file return of income for the year under consideration within the time limit prescribed u/s 139(1) or 139(4) of the Income 1961 (in short ‘the Act’). The Ld. Assessing Officer on verification of the data available on the Income-tax Portal, found that t had deposited of Rs.14,00,000/- in his saving account received salary of Rs.4,50,000/- from Mahalaxmi Seamless Ltd. however did not file return of income and therefore, he issued notice u/s 148 of the Act on 28.12.2017 after seeking approval from the competent authority u/s 151 of the Act and initiated the reassessment proceedings u/s 147 of the Act. In response, the assessee filed return of income declaring salary from Mahalaxmi during the assessment proceedings. On veri the submission of the assessee, the Assessing Officer made addition for cash deposit of Rs.4,50,000/- taking a peak of cash transaction Madhavprasad Govindram Jalan 3 ITA No. 2914/M/2022 5. In the facts and circumstances of the case and in law, the Ld.Commissioner of Income Tax (Appeals) has erred upholding the action of the Ld. Assessing Officer in making by travelling beyond the 6. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) and the Ld. Assessing Officer has erred in passing the respective a) without providing adequate and sufficient opportunity of being heard to the Appellant; thereby violating the b) by disregarding the submissions/explanations and Briefly stated facts of the case are that the assessee did not file return of income for the year under consideration within the time limit prescribed u/s 139(1) or 139(4) of the Income-tax Act, 1961 (in short ‘the Act’). The Ld. Assessing Officer on verification of tax Portal, found that the assessee in his saving accounts and also from Mahalaxmi Seamless Ltd. however did not file return of income and therefore, he issued notice pproval from the and initiated the reassessment proceedings u/s 147 of the Act. In response, the assessee filed return of income declaring salary from Mahalaxmi during the assessment proceedings. On verification of the submission of the assessee, the Assessing Officer made addition taking a peak of cash transaction in the bank account. He also made addition for the credit of Rs.1,08,00,000/- appearing in the bank statemen 3. Aggrieved, the assessee filed appeal before the Appellate Authority having jurisdiction over the assessee [i.e. ‘ CIT(A)’]. The appeal was ‘NFAC’ noted that despite several opportunitie not comply and therefore available document and dismiss observing as under: “5. Before me also the assessee has not produced any substantial evidence in support of his contention following has not been produced: 1. Books of accounts of MIs Mahalaxmi Seamless Ltd. showing loan transactions 2. Copy of IT of MIs Mahalaxmi Seamless Lid. to show the creditworthiness and mode of payment. 3. Proof of IT and bank account of family members showing the receipt of money 4. Copy of his previous years ITs 5. Audit report of M/s Mahalaxmi Seamless Ltd. 6. After giving several opportunities, the assessee did not comply with the /appeal notices, the assessee did not prove anything neither before the assessi appellate authority. Despite giving opportunity at every proceeding he always claimed lack of opportunity. It is clear that the assessee has been unable to submit documents and evidences since the filing of the return of income. the sources of the impugned cash credits. He has not let in any material/evidence either before the assessing officer or before me to establish that his claim is genuine. The source of the impugned deposits are not explained by the assessee with the help of documents. Madhavprasad Govindram Jalan in the bank account. He also made addition for the credit of appearing in the bank statement. Aggrieved, the assessee filed appeal before the Appellate Authority having jurisdiction over the assessee [i.e. ‘ The appeal was then transferred to NFAC. However, the Ld. noted that despite several opportunities, the assess and therefore, he passed the order on the basis of the available document and dismissed the appeal of the assessee 5. Before me also the assessee has not produced any substantial evidence in support of his contention following has not been produced: Books of accounts of MIs Mahalaxmi Seamless Ltd. showing loan transactions Copy of IT of MIs Mahalaxmi Seamless Lid. to show the creditworthiness and mode of payment. Proof of IT and bank account of family members wing the receipt of money Copy of his previous years ITs Audit report of M/s Mahalaxmi Seamless Ltd. After giving several opportunities, the assessee did not comply with the /appeal notices, the assessee did not prove anything neither before the assessing officer nor before first appellate authority. Despite giving opportunity at every proceeding he always claimed lack of opportunity. It is clear that the assessee has been unable to submit documents and evidences since the filing of the return of income. the sources of the impugned cash credits. He has not let in any material/evidence either before the assessing officer or before me to establish that his claim is genuine. The source of the impugned deposits are not explained by the assessee help of documents.” Madhavprasad Govindram Jalan 4 ITA No. 2914/M/2022 in the bank account. He also made addition for the credit of Aggrieved, the assessee filed appeal before the Ld. First Appellate Authority having jurisdiction over the assessee [i.e. ‘Ld. However, the Ld. s, the assessee did he passed the order on the basis of the the appeal of the assessee, 5. Before me also the assessee has not produced any substantial evidence in support of his contention. The Books of accounts of MIs Mahalaxmi Seamless Ltd. Copy of IT of MIs Mahalaxmi Seamless Lid. to show Proof of IT and bank account of family members Audit report of M/s Mahalaxmi Seamless Ltd. After giving several opportunities, the assessee did not comply with the /appeal notices, the assessee did not prove ng officer nor before first appellate authority. Despite giving opportunity at every proceeding he always claimed lack of opportunity. It is clear that the assessee has been unable to submit documents and evidences since the filing of the return of income. About the sources of the impugned cash credits. He has not let in any material/evidence either before the assessing officer or before me to establish that his claim is genuine. The source of the impugned deposits are not explained by the assessee 4. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that the Ld. NFAC has not taken into consideration submission of the assessee. Before us, the Ld. Counsel of during the course of the hearing before the Ld. CIT(A), predecessor to NFAC evidence in the form of additional evidence to substantiate the receipts from the company. The Ld. CIT(A) vi 12.09.2019 called for the comment of the Assessing Officer on the additional evidence. During the course of remand proceedings, the assessee filed detailed submission along with the documentary evidence to substantiate receipts from the com respect of the cash deposit. The Assessing Officer issued notice u/s 133(6) of the Act to company. Thereafter, the Assessing Officer after verification has sent copy of the said remand report w Ld. CIT(A). Thereafter, appeal of the assessee was transferred to the Ld. NFAC. Before the all the documents but the Ld. failed to produce substantial evidence additional evidences, which were filed before the Commissioner of Income-tax (Appeals) and Assesisng Officer, have Faceless Appeal Centre and order has been passed in manner. Madhavprasad Govindram Jalan We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that has not taken into consideration submission of the assessee. Before us, the Ld. Counsel of the assessee submitted that during the course of the hearing before the Ld. CIT(A), predecessor to NFAC, the assessee filed various documentary evidence in the form of additional evidence to substantiate the receipts from the company. The Ld. CIT(A) vide letter dated 12.09.2019 called for the comment of the Assessing Officer on the additional evidence. During the course of remand proceedings, the assessee filed detailed submission along with the documentary evidence to substantiate receipts from the company and also in respect of the cash deposit. The Assessing Officer issued notice u/s 133(6) of the Act to company. Thereafter, the Assessing Officer after remand report vide letter dated 23.01.2020 copy of the said remand report was provided to the assessee by the Ld. CIT(A). Thereafter, appeal of the assessee was transferred to the . Before the Ld. NFAC, the assessee claimed to all the documents but the Ld. NFAC has noted that the assessee failed to produce substantial evidence. Thus it is evident that additional evidences, which were filed before the Commissioner of tax (Appeals) and remand report thereon filed by the have not been considered by the National Faceless Appeal Centre and order has been passed in Madhavprasad Govindram Jalan 5 ITA No. 2914/M/2022 We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that has not taken into consideration submission of the the assessee submitted that during the course of the hearing before the Ld. CIT(A), i.e. the assessee filed various documentary evidence in the form of additional evidence to substantiate the de letter dated 12.09.2019 called for the comment of the Assessing Officer on the additional evidence. During the course of remand proceedings, the assessee filed detailed submission along with the documentary pany and also in respect of the cash deposit. The Assessing Officer issued notice u/s 133(6) of the Act to company. Thereafter, the Assessing Officer after remand report vide letter dated 23.01.2020. A as provided to the assessee by the Ld. CIT(A). Thereafter, appeal of the assessee was transferred to the assessee claimed to have filed has noted that the assessee . Thus it is evident that additional evidences, which were filed before the Commissioner of remand report thereon filed by the dered by the National Faceless Appeal Centre and order has been passed in ex-parte 4.1 In the facts and circumstances, we feel it appropriate to restore the matter back to the Ld. for deciding afresh after by the assessee and following due procedure under Rule 46 of the Income-tax Rules. The ground accordingly allowed for statistical purposes. 5. In the result, the appeal filed statistical purposes. Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 23/02/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// Madhavprasad Govindram Jalan In the facts and circumstances, we feel it appropriate to restore the matter back to the Ld. National Faceless Appeal Centre for deciding afresh after considering the additional evidence by the assessee and following due procedure under Rule 46 of the tax Rules. The grounds of appeal raised by the assessee are accordingly allowed for statistical purposes. In the result, the appeal filed by the assessee is allowed for Order pronounced in the open Court on 23/ Sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Madhavprasad Govindram Jalan 6 ITA No. 2914/M/2022 In the facts and circumstances, we feel it appropriate to National Faceless Appeal Centre considering the additional evidences filed by the assessee and following due procedure under Rule 46 of the of appeal raised by the assessee are by the assessee is allowed for 23/02/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai