Alpaben Vikrambhai Mavani, Surat V. The Income tax Officer,Ward-9(1), Surat

ITA 2929/AHD/2009

• Counselvise Citation: 292920514 RSA 2009
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 27-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S SOORYAWANSHI
• Keywords: Unexplained investment; Principle of natural justice
• Section: 133A; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI A N PAHUJA, ACCOUNTANT MEMBER ITA NO.2929/AHD/2009 (ASSESSMENT YEAR:-2004-05) ALPABEN VIKRAMBHAI MAVANI, 27, NANDESHWARI SOCIETY, L H ROAD, SURAT V/S INCOME-TAX OFFICER, WARD- 9(1), AAYAKAR BHAVAN, MAJURA GATE,SURAT PAN: AHUPM7946 A [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI HARDIK VORA, AR REVENUE BY:- SHRI G S SOORYAWANSHI, DR DATE OF HEARING:- 09-08-2011 DATE OF PRONOUNCEMENT:- 09-08-2011 O R D E R A N PAHUJA: THIS APPEAL FILED ON 27.10.2009 BY THE ASSESSEE AGAINST AN ORDER DATED 21-02-2008 OF THE LD. CIT(AP PEALS)-V, SURAT, FOR THE ASSESSMENT YEAR 2004-05, RAISES THE FOLLO WING GROUNDS:- [1] ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WEL L AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN PASSING THE EX PARTE ORDER WITHOUT PROVIDING SU FFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. [2] ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF ENTIRE RECEIPTS OF RS.6,56,529/- ON ACCOUNT OF JOB WORK WITHOUT ALLOWING DEDUCTION OF ANY EXPENSES DEBITED TO TR ADING ACCOUNT AND PROFIT & LOSS ACCOUNT. [3] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LA W ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF RS.50,900/- FOR ALLEGED UNEXPLAINED INVES TMENT IN MACHINERY PURCHASED. [4] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LA W ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS 2 ITA NO.2929/AHD/2009 ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF RS.3,20,000/- FOR ALLEGED UNSECURED LOANS U/S. 68 OF THE ACT. [5] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LA W ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF RS.44,504/- ON ACCOUNT OF INTEREST INCOME. [6] IT IS THEREFORE PRAYED THAT THE ABOVE ADDITIONS / DISALLOWANCES MADE BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME-T AX (APPEALS) MAY PLEASE BE DELETED. [7] APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE AN Y GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2 FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING LOSS OF RS.67,960/- FILED ON 30-12-2004 BY THE ASSE SSEE, AFTER BEING PROCESSED ON 28-03-2005 U/S 143(1) OF THE INCOME-TA X ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT], WAS SELECTE D FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ON 25 -07-2005,SINCE A SURVEY U/S 133A OF THE ACT WAS UNDERTAKEN IN THE CA SE OF ONE SHRI PANKAJ DANAWALA,CA ON 11-03-2005. AFTER PERUSING T HE P&L ACCOUNT AND BALANCE-SHEET ANNEXED WITH THE RETURN A ND IN THE LIGHT OF STATEMENT OF SHRI PANKAJ DANAWALA RECORDED U/S 131 OF THE ACT, THE ASSESSING OFFICER [AO FOR SHORT] BROUGHT TO T AX AN AMOUNT OF RS.5,13,936/- BY WAY OF JOB WORK RECEIPTS FROM M/S KIRAN WEAVING, SURAT ON PROTECTIVE BASIS IN THE HANDS OF THE ASSES SEE AND ON SUBSTANTIVE BASIS IN THE HANDS OF KIRAN WEAVING, SU RAT. BESIDES, AN AMOUNT OF RS.1,42,593/- WAS ALSO ADDED IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS AND IN THE CASE OF SHR I GOPALBHAI MAVANI ON SUBSTANTIVE BASIS, SINCE FICTITIOUS CAPIT AL WAS UTILISED IN RESPECT OF MACHINERY AND ASSETS BY SHRI GOPALBHAI M AVANO, IN THE NAME OF THE ASSESSEE. INTER ALIA, AN AMOUNT OF RS.5 0,900/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MACHINERY AND RS.44,504/- BY WAY OF INTEREST REFLECTED IN THE P&L ACCOUNT OF M/S ALPA TEXTILE, A PROPRIETARY CONCERN OF THE ASSESSEE, WAS ALSO ADDED BESIDES AN 3 ITA NO.2929/AHD/2009 AMOUNT OF RS.3,20,000/- ON ACCOUNT OF UNEXPLAINED C APITAL AS MENTIONED IN PARA-12 OF THE ASSESSMENT ORDER. 3. ON APPEAL, NONE APPEARED BEFORE THE LEARNED CIT( A) ON BEHALF OF THE ASSESSEE OR THE REVENUE. ACCORDINGLY, THE LE ARNED CIT(A) DISMISSED THE APPEAL IN THE FOLLOWING TERMS:- THE CASE WAS FIXED MANY A TIMES BUT NO ONE ATTENDED. AL THOUGH ONE ADJOURNMENT WAS SOUGHT, NO WRITTEN SUBMISSIONS OR ORAL ARGUMENTS WERE MADE. THIS CASE RELATES TO DANAWALA GROUP OF CASES. IN THIS GROU PS ONE CA SHRI PANKAJ DANAWALA WAS SURVEYED AND HE ADMITTED THAT HE HAD CREATED BOGUS CAPITAL IN APPELLANTS HAND WHICH HAS BEEN UTILIZE D BY CERTAIN BENEFICIARIES. THE ASSESSMENT ORDER IS FAIRLY DETAILED AND ASSESSING OFFICERS REASONING SEEMS TO BE PRIMA-FACIE JUSTIFIED. NOT HING CONTRARY TO THE SAME HAS BEEN BROUGHT BEFORE ME DURING APPELLATE PROCEEDINGS. IN THE LIGHT OF THE ABOVE, I AM CONSTRAINED TO UPHOLD THE ORDER OF THE AO, AND DISMISS THE PRESENT APPEAL. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED AR ON BEHALF OF THE ASSESSEE WHILE RELYING UPON THE DECISION OF THE ITA T AHMEDABAD BENCH-C IN THE CASE OF GUJARAT THEMIS BIOSYN LTD. VS. JOINT CIT [2000] 74 ITD 339 (AHD) , CONTENDED THAT THE LEARNED CIT(A) HAVING UPHELD THE FINDINGS OF THE AO WITHOUT ANY REASONS, THE MATTER IS REQUIRED TO BE RESTORED TO HIS FILE WITH DIRECTION TO PASS A SPEAKING ORDER. THE LEARNED DR DID NOT OPPOSE THESE SUBMISSI ONS ON BEHALF OF THE ASSESSEE. 5 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE AS ALSO THE AFORESAID DECISION OF THE ITAT IN GUJARAT THEMIS BIOSYN LTD.(SUPRA). INDISPUTABLY, DESPITE VARIOUS OPPORTUNITIES ALLOWED BY THE LD. CIT(A) FOR HEARING , NONE APPEARED ON BEHALF OF ASSESSEE BEFORE THE LD. CIT(A) EXCEPT FOR SEEKING ADJOURNMENT ON ONE OCCASION . THE LD. AR DID NOT I NFORM US ANY REASONS FOR ABSENCE OF THE ASSESSEE ON VARIOUS DATE S OF HEARING BEFORE THE LD. CIT(A). THUS, PLEA OF THE ASSESSEE IN GROUND NO.1 OF 4 ITA NO.2929/AHD/2009 THEIR APPEAL THAT THE LD. CIT(A) DISPOSED OF THE A PPEAL EXPARTE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESS EE IS BASELESS AND IS, THEREFORE, REJECTED. THE LD. AR APPEARING BEFOR E US DID NOT MAKE ANY SUBMISSIONS ON THIS GROUND NOR PLACED ANY MATER IAL, EVIDENCING THAT THE ASSESSEE EVER ATTEMPTED TO APPEAR BEFORE T HE LD. CIT(A) .IN THESE CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN GR OUND NO.1 IN THE APPEAL. 5.1. AS REGARDS GROUND NOS.2 TO 5 IN THE APPEAL, A S IS APPARENT, THE AFORESAID ORDER OF THE LD. CIT(A) IS NOT A SPEA KING ORDER. THE LD. CIT(A) WHILE UPHOLDING THE ADDITIONS MADE BY THE A O DID NOT ANALYSE THE ISSUES NOR ASSIGNED ANY REASONS. A MERE GLANCE AT THE IMPUGNED ORDER REVEALS THAT THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE, NAMELY, THAT EVERY JUDICIAL/QUASI- JUDICIAL BODY/AUTHORITY MUST PASS REASONED ORDER, WHICH SHOU LD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO T HE ISSUES/POINTS RAISED BEFORE IT. THE APPLICATION OF MIND TO THE MA TERIAL FACTS AND THE ARGUMENTS SHOULD MANIFEST ITSELF IN THE ORDER. SECT ION 250(6) OF THE ACT MANDATES THAT THE ORDER OF THE CIT(A) WHILE DIS POSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POIN TS FOR DETERMINATION, THE DECISION THEREON AND THE REASONS FOR THE DECISION. THE REQUIREMENT OF RECORDING OF REASONS A ND COMMUNICATION THEREOF HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PROCEDURE. THE REQUIREMENT OF RECOR DING OF REASONS BY THE QUASI-JUDICIAL AUTHORITIES IS AN IMPORTANT S AFEGUARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARIT Y, CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERAT IONS AND MINIMIZES ARBITRARINESS IN THE DECISION-MAKING PROC ESS. WE MAY REITERATE THAT A DECISION DOES NOT MERELY MEAN TH E CONCLUSION. IT EMBRACES WITHIN ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSION.[MUKHTIAR SINGH VS. STATE OF PUNJAB,(199 5)1SCC 760(SC)]. AS IS APPARENT, THE IMPUGNED ORDER SUFFER S FROM LACK OF 5 ITA NO.2929/AHD/2009 REASONING AND IS NOT A SPEAKING ORDER. IN VIEW O F THE FOREGOING, ESPECIALLY WHEN THE LD. CIT(A) HAS NOT PASSED A SPE AKING ORDER ON VARIOUS ISSUES RAISED IN GROUND NOS. 1 TO 4 IN THE APPEAL BEFORE HIM, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE TH E ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECID ING THE ISSUES RAISED IN THE GROUNDS RAISED BEFORE HIM BY THE ASS ESSEE AFRESH IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPO RTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECIDING THE APPEAL, THE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6) OF T HE ACT. WE MAY CLARIFY THAT AS UNDERTAKEN BY THE LD. AR APPEARING BEFORE US ,THE ASSESSEE SHALL APPROACH THE LD. CIT(A) FOR EXPEDIT IOUS DISPOSAL OF APPEAL WITHIN 15 DAYS OF THE RECEIPT OF THIS ORDER AND SHALL NOT SEEK ANY ADJOURNMENT WITHOUT VALID REASONS. WITH THESE O BSERVATIONS, GROUND NOS. 2 TO 5 IN THE APPEAL ARE DISPOSED OF. 6. GROUND NO. 6 IN THE APPEAL BEING GENERAL IN N ATURE NOR ANY SUBMISSIONS HAVING BEEN MADE BEFORE US ON THIS GROU ND, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITION AL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF THE RESIDUARY GRO UND NO. 7 IN THE APPEAL, ACCORDINGLY, THESE GROUNDS ARE DISMISSED. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 9 -08-2011 SD/- SD/- ( MUKUL SHRAWAT ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 9-08-2011 COPY OF THE ORDER FORWARDED TO: 1. ALPABEN VIKRAMBHAI MAVANI, 27, NANDESHWARI SOCIE TY, L H ROAD, SURAT 6 ITA NO.2929/AHD/2009 2. INCOME-TAX OFFICER, WARD-9(1), AAYAKAR BHAVAN, M AJURA GATE,SURAT 3. CIT CONCERNED 4. CIT(A)-IV, SURAT 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD