Nimish Sudhirchandra Shroff, Surat V. The Income Tax Officer,Ward-3(4), Surat

ITA 2924/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6076 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITA RAM MEENA
• Assessee Lawyers: S K KABRA
• Keywords: Principle of natural justice; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ./ ITA NO. 2924 /AHD/201 4 / ASSTT. YEAR: 2008 - 09 NIMISH SUDHIRCHANDRA SHROFF, A - 7, AKSHARDHAM SOCIETY, GANGESHWAR MAHADEV ROAD, ADAJAN, SURAT 395001 PAN : AHPPS 9706 B VS. INCOME TAX OFFICER, WARD - 3 (4) , SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MR. S.K. KABRA REVENUE BY : MR. SITA RAM MEENA, SR DR / DATE OF HEARING : 2 8 / 0 4 /201 7 / DATE OF PRONOUNCEMENT: 28 / 0 4 /201 7 / O R D E R PER RAJPAL YADAV , JUDICIAL MEMBER : THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF LD. CIT(A) - IV, SURAT DATED 28 .0 8 .201 4 PASSED FOR AY 200 8 - 0 9 . 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE READS AS UNDER: THE LD. CIT (A) HAS ERRED ON THE FACTS OF THE CASE AND IN LAW IN UPHOLDING THE LEVY OF PENALTY OF RS.4,22,570/ - U/S 271(1)(C) OF THE INCOME - TAX ACT. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE QUANTUM ADDITION WAS CHALLENGED BY THE ASSESSEE IN APPEAL BEFORE THE ITAT AND THE ITAT VIDE ITS ORDER DATED 22 .0 7 .2015 IN ITA NO. 2049 /AHD/2011 HAS SET ASIDE THE SAME BY FOLLOWING OB SERVATIONS: - ITA NO. 2924/AHD/ 2014 NIMISH SUDHIRCHANDRA SHROFF VS. ITO AY : 2008 - 09 2 2. ASSESSEE IS INDIVIDUAL HAVING INCOME FROM DIFFERENT SOURCES WHICH INCLUDE INCOME FROM BROKERAGE, INTEREST, RENTAL AND JOB WORK. ASSESSEE'S CASE WAS SELECTED FOR SCRUTINY AND PROCEEDINGS WERE TAKEN UP ACCORDINGLY. DURING COURSE OF ASSESSM ENT PROCEEDINGS, ASSESSEE WAS ASKED TO EXPLAIN DETAILS AND SOURCE OF FUNDS OF RS.11,90,000/ - DEPOSITED BY CASH IN SB ACCOUNT NO. 14500 WITH SURAT PEOPLE CO - OPERATIVE BANK, WHICH WAS A JOINT SB ACCOUNT IN THE NAME OF ASSESSEE AND HIS UNCLE SHRI ASHWINCHANDR A KANTILAL SHROFF. ASSESSEE SUBMITTED AN AFFIDAVIT OF HIS UNCLE INTER ALIA STATING THAT FUNDS DEPOSITED IN SB ACCOUNT AND RELATED TRANSACTION BELONG TO HIM EXCLUSIVELY. THE CONCERNED ASSESSING OFFICER DISREGARDED THE AFFIDAVIT AND REJECTED THE EXPLANATION FURNISHED ON BEHALF OF ASSESSEE SUPPORTED BY AFFIDAVIT. AS STATED ABOVE, FUNDS OF RS.11,90,000/ - DEPOSITED BY CASH IN SAID JOINT ACCOUNT IS SUBJECT MATTER BEFORE US. WE FIND THAT IN AFFIDAVIT, JOINT OWNER OF ASSESSEE'S UNCLE, SHRI ASHWINCHANDRA KANTILAL SH ROFF STATED THAT HE HAS SOLD HIS SHOP AND HOUSE IN THE YEAR 2004 FOR RA.10,11,000/ - [SHOP - RS.4,80,000/ - AND HOUSE - RS.5,30,000/ - ] AND OUT OF THE SALE PROCEEDS, A SMALL HOUSE WAS PURCHASED FOR RS.2,77,000/ - AND THE REMAINING AMOUNTS WERE GIVEN ON LOANS TO VARIOUS PERSONS TO EARN INTEREST AND FURTHER HIS NEPHEW HAVING KNOWLEDGE OF SHARES AND AT HIS ADVICE, THE FUNDS SO, AVAILABLE WITH HIM WERE DEPOSITED IN THE BANK ACCOUNT. SINCE, HE HAS NOT ANY TAXABLE INCOME, SO HE HAS NOT FILING ANY RETURN OF INCOME FO R THE LAST 8 OR 10 YEARS. CONCERNED ASSESSING OFFICER DID NOT ACCEPT THE STORY OF JOINT ACCOUNT AND DEPOSITED BY UNCLE OF ASSESSEE. EVEN THOUGH UNCLE OF ASSESSEE STATED THAT HE HAS DEPOSED BY WAY OF AFFIDAVIT, THAT SAID AMOUNT OF RS.11,90,000/ - BELONGS TO HIM BUT SAME WAS NOT ACCEPTED. THE CONTENTS OF AFFIDAVIT SHOULD NORMALLY BE REJECTED BY CONFRONTING THE SAME TO THE DEPONENT, WHICH HAS NOT BEEN DONE IN THIS CASE. IT IS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BECAUSE OPPORTUNITY OF HEARING IS ESSENCE OF PRINCIPLE OF NATURAL JUSTICE, IT SHOULD NOT BE SACRIFICED AT ANY COST. UNFORTUNATELY, SAME HAS BEEN DONE IN THIS CASE BY REJECTING THE CONTENTIONS OF AFFIDAVIT, WHICH IS NOT JUSTIFIED. TAKING OVER ALL VIEW OF SITUATION, WE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO ASSESSING OFFICER WITH DIRECTION TO DECIDE THE SAME AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO ASSESSEE. SINCE, WE ARE RESTORING THE ISSUE ON PRELIMINARY ISSUE, SO, WE ARE REFRAINING TO COMMENT ON MERIT OF ISSUE AT HAND. 4. IT IS FURTHER CONTENDED THAT IN THE CONSEQUENT ASSESSMENT PROCEEDINGS, THE LD. ASSESSING OFFICER HAS INITIATED SEPARATE PROCEEDINGS U/S 271(1)(C) OF THE ACT. SINCE THE IMPUGNED ASSESSMENT ORDER ITSELF STANDS SET ASIDE, THE PENALTY IN QUESTION BECOMES INFRUCTUOUS . ITA NO. 2924/AHD/ 2014 NIMISH SUDHIRCHANDRA SHROFF VS. ITO AY : 2008 - 09 3 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. SINCE THE ASSESSMENT IN QUESTION FROM WHICH THE IMPUGNED PENALTY AROSE HAS BEEN SET ASIDE BY THE TRIBUNAL VIDE ORDER DATED 22.07.2015 , THE PENALTY IN QUESTION BECOMES INFRUCTUOUS. IN VIEW THEREOF, THE PENALTY LEVIED U/S 271(1)(C) STANDS DELETED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. O RDER PRONOUNCED IN THE COURT ON 2 8 T H APRIL, 2017 AT CAMP SURAT . SD/ - SD/ - ( AMARJIT SINGH ) ACCOUNTANT MEMBER ( RAJPAL YADAV) JUDICIAL MEMBER SURAT ; DATED 2 8 / 0 4 /201 7 * BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE . / BY ORDER, T R U E C O P Y / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD