Sh. Sandeep Goyal, Jalandhar V. The Income Tax Officer, Jalandhar city

ITA 295/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8725 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-01-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Depreciation; Opportunity of being heard; Principle of natural justice; Unabsorbed depreciation
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: (CIRCUIT BENCH AT JALANDHAR) BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.295/ASR/2016 (ASSESSMENT YEAR-1998-99) SH. SANDEEP GOYAL C/O DR. B.L. GOYAL, G.T. ROAD, JALANDHAR. PAN NO. (ASSESSEE) VS .. ITO-WARD-3(2), JALANDHAR. (REVENUE) ASSESSEE BY SHRI .SANDEEP VIJH, CA. REVENUE BY SHRI. BALVINDER KAUR, DR. ORDER PER, A. D. JAIN, JUDICIAL MEMBER: THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 1998- 99, TAKING THE FOLLOWING GROUNDS: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HAS ERRED IN SUSTAINING AN ORDER WHICH I S BAD IN LAW. THE ASSESSING OFFICER HAS NOT EVEN COMPLIED WITH TH E DIRECTIONS OF THE TRIBUNAL AND EVEN IGNORED THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS), HAS ERRED IN SUSTAINING THE ADDITION OF RS. 5,00,00 0/- ON DATE OF HEARING 24.01.2017 DATE OF PRONOUNCEMENT 16.03.2017 I.T.A NO.295/ASR/2016 2 ACCOUNT OF GIFT RECEIVED. THE SUBMISSIONS MADE ON T HE ISSUE HAVE NOT BEEN APPRECIATED. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND NOT FOLLOWING THE DIRECTIONS OF THE ITA T WHILE SETTING ASIDE THE ISSUE MAKE THE ADDITION BAD IN LA W WHICH SHOULD BE DELETED. 2. THE FACTS ARE THAT THE ASSESSEE, WHO IS A DOCTOR BY PROFESSION, HAD FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 31.03.1999 DECLARING THEREIN AN INCOME OF RS.3,04,990/-. HOWEVER, THE ORIGINAL A SSESSMENT IN THIS CASE WAS COMPLETED BY THE ASSESSING OFFICER VIDE ORDER UNDER SECTION 143(3) OF THE ACT DATED 20/23.03.2001 AT AN ASSESSED INCOME OF RS. 18 ,94,890/-. WHILE COMPLETING THE ORIGINAL ASSESSMENT IN THIS CASE, THE ASSESSING OFFICER HAS MADE THE FOLLOWING ADDITIONS TO THE RETURNED INCOME OF THE ASSESSEE:- (I). ADDITION ON ACCOUNT OF UNEXPLAINED GIFT S HOWN AS RECEIVED FROM SH. JAGDISH VIJH AN NRI RS. 1,82,835/ - (II). ADDITION ON ACCOUNT OF UNEXPLAINED GIFT SHOWN AS RECEIVED FROM SH. PRITAM SINGH AN NRI RS.5,00,000/- (III). ADDITION ON ACCOUNT OF UNEXPLAINED GIFT SHOW N AS RECEIVED FROM SH. PARMOD TONDON AN NRI RS.3,93,924/ - (IV). ADDITION ON ACCOUNT OF UNEXPLAINED GIFT SHOWN AS RECEIVED FROM MRS. GURPREET KAUR AN NRI RS. 1,91,00 0/- I.T.A NO.295/ASR/2016 3 (V). ADDITION ON ACCOUNT OF UNEXPLAINED GIFT SHOWN AS RECEIVED FROM MRS. MANPREET SEHDEV AN NRI RS.1,91,0 00/- (VI). ADDITION ON ACCOUNT OF INADEQUATE WITHDRAWALS FOR HOUSEHOLD EXPENSES RS. 84,000/- APART FROM THIS, THE SET OFF OF UNABSORBED DEPRECIA TION OF THE ULTRASOUND SCANNING AGAINST OTHER INCOME UNDER THE HEAD 'BUSINESS AND P ROFESSION' WAS ALSO DENIED TO THE ASSESSEE. 3 AGGRIEVED WITH THE ORDER OF ASSESSMENT DATED 20/2 3.03.2001, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A), JALANDH AR AND CHALLENGED ALL THE ADDITIONS AS MENTIONED ABOVE INCLUDING DENIAL OF SE T OFF OF UNABSORBED DEPRECIATION. THE LEARNED CIT(A), JALANDHAR VIDE HI S ORDER IN APPEAL NO. 107/01- 02/CIT(A)/JAL DATED 28.03.2002 DELETED ADDITIONS OF RS. 1,82,835/- + RS. 1,9 1,000/- + RS. 1,9 1,000/- + RS.3,93,924/- TOTALLING IN ALL TO RS.9,58,759/- AND ALSO ALLOWED THE SET OFF OF UNABSORBED DEPRECIATION TO T HE EXTENT OF RS.47,135/-. HOWEVER, THE ADDITIONS OF RS. 5,00,000/- AND RS. 84 ,000/- AS REFERRED TO ABOVE WERE CONFIRMED BY HIM. 4. AGGRIEVED WITH THE ORDER OF LEARNED CIT(A), JAL ANDHAR DATED 28.03.2002, THE ASSESSEE AS WELL AS REVENUE PREFERRED CROSS APP EALS BEFORE THE ITAT, AMRITSAR BENCH, AMRITSAR. THE ITAT, AMRITSAR BENCH, AMRITSAR VIDE ITS CONSOLIDATED ORDER IN ITA NOS. 112 & 193(ASR)/2002 DATED 30.07.2003 DI SMISSED THE APPEAL OF THE I.T.A NO.295/ASR/2016 4 REVENUE. WHILE DECIDING THE APPEAL OF ASSESSEE, THE ITAT, AMRITSAR BENCH, AMRITSAR SET ASIDE THE ISSUE WITH REGARD TO ADDITIO N OF RS. 5,00,000/- [ON ACCOUNT OF ALLEGED GIFT FROM SH. PRITAM SINGH AN NRI] TO THE F ILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION AND ALLOWED RELIEF OF RS. 34,000 /- OUT OF ADDITION OF RS.84,000/-. 5. THE SET ASIDE ASSESSMENT WAS AGAIN COMPLETED BY THE ASSESSING OFFICER VIDE ORDER UNDER SECTION 143(3) OF THE ACT DATED 31.12.2 004 AND HE AGAIN MADE ADDITION OF RS. 5, 00,000/- ON ACCOUNT OF UNEXPLAINED GIFT S TATED TO BE RECEIVED BY THE ASSESSEE FROM SH. PRITAM SINGH. 6. AGGRIEVED WITH ASSESSMENT ORDER DATED 31.12.2004 , THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND CHALLENGED THE ADDITION OF RS . 5,00,000/-. 7. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN FURT HER APPEAL BEFORE US. 8. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ASSESSMENT ORDER, WHEREIN THE AO HAS NOT COMPLIED WITH THE DIRECTIONS OF THE TRIBUNAL AND HAS IGNORED THE PRIN CIPLES OF NATURAL JUSTICE; THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.5 LAC ON ACCOUNT OF GIFT RECEIVED, WITHOUT APPRECIATING THE SUBMISSIONS MADE BY THE ASSESSEE; THAT PRINCIPLES OF NATURAL JUSTICE HAVE BEEN VIOLATED AN D THE DIRECTIONS OF THE TRIBUNAL I.T.A NO.295/ASR/2016 5 HAVE NOT BEEN FOLLOWED; AND THAT THEREFORE, THE ORD ER UNDER APPEAL BE CANCELLED AND THE APPEAL OF THE ASSESSEE BE ALLOWED. 9. THE LD. DR, ON THE OTHER HAND, PLACED STRONG REL IANCE ON THE IMPUGNED ORDER. 10. HAVING CONSIDERED THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE FIND THAT THE TRIBUNAL, VIDE ITS ORDER ( APB-13-15, RELEVANT PORTIONS), IN PARA 6.6 OF THE ORDER, ISSUED THE FOLLOWED DIRECTIO NS TO THE AO WHILE REMITTING THE MATTER: '6.6 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES, WE THINK IT APPROPRIATE TO SET-ASIDE THE I SSUE AND REMAND THE MATTER BACK TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION ON MERITS, IN ACCORDANCE WITH LAW. WE ALSO DIRECT THE ASSESSEE TO PRODUCE SHRI PRITAM SINGH IN ORDER TO ESTABLISH CAPACITY AND CREDIT WORTHINESS OF THE TRANSACTION. IN OUR VIEW, THE A.O. SHOULD HAVE EXAM INED SHRI PRITAM SINGH IN CASE HE HAD ANY DOUBT IN HIS M IND AND, THEREFORE, WE ARE OF THE OPINION THAT SH. PRIT AM SINGH MAY BE EXAMINED BEFORE REACHING ANY CONCLUSIO N. THE A.O. SHOULD GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER.' 11. THUS, THE DIRECTIONS OF THE TRIBUNAL ARE CLEAR. THE AO WAS TO EXAMINE PRITAM SINGH DONOR TO ESTABLISH HIS CAPACITY TO MAK E THE GIFT AND THE GENUINENESS OF THE TRANSACTION, ON AFFORDING ADEQUATE OPPORTUNI TY TO THE ASSESSEE. I.T.A NO.295/ASR/2016 6 12. AS PER THE AO, STATEMENT OF PRITAM SINGH WAS RE CORDED ON 29.11.2004. AT PAGE 2 OF THE ASSESSMENT ORDER, IT HAS BEEN RECORDE D THAT NOTICE UNDER SECTIONS 143(2) AND 142(1) OF THE IT ACT WAS ISSUED TO THE A SSESSEE. HOWEVER, THEREON, THE AO DOES NOT STATE ANYTHING REGARDING OPPORTUNITY TO THE ASSESSEE, BUT FOR OBSERVING THAT HE OBTAINED THE OTHER INFORMATION FROM THE AS SESSEE. THE STATEMENT OF PRITAM SINGH WAS NEVER CONFRONTED TO THE ASSESSEE. HE WAS NOT ALLOWED ANY OPPORTUNITY TO CROSS-EXAMINE PRITAM SINGH. STILL, HIS STATEMENT WA S USED AGAINST THE ASSESSEE, WHICH IS ILLEGAL. THE INFORMATION COLLECTED BY THE AO WAS NOT AS PER THE DIRECTIONS ISSUED BY THE TRIBUNAL. NO EXPLANATION WAS ASKED FO R FROM THE ASSESSEE. 13. THUS, THE SPECIFIC DIRECTIONS OF THE TRIBUNAL W ERE NOT FOLLOWED. IN FCS INTERNATIONAL MARKETING P. LTD., (APB-21-22), IT W AS HELD BY THE AMRITSAR BENCH OF THE TRIBUNAL THAT WHERE SPECIFIC DIRECTIONS ISSU ED BY THE TRIBUNAL ARE NOT FOLLOWED, THE ADDITION DESERVES TO BE DELETED. THIS ORDER HAS BEEN UPHELD (APB 120-122) BY THE HONBLE HIGH COURT IN CIT VS. FCS INTERNATIONAL MARKETING P. LTD., 283 ITR 32 (P & H). 14. BEFORE THE LD. CIT(A), VIDE WRITTEN SUBMISSIONS (IMPUGNED ORDER, PAGES 9- 15, RELEVANT PORTION AT PAGES 10-11) DATED 13.08.20 07 AND FURTHER WRITTEN SUBMISSIONS (IMPUGNED ORDER, PAGE 17-19, RELEVANT P ORTION AT PAGES 17-18) DATED 11.08.2015, THE ASSESSEE RAISED THIS ISSUE OF HAVIN G NOT BEEN PROVIDED OPPORTUNITY BY THE AO AND OF THE AO HAVING VIOLATED THE PRINCI PLES OF NATURAL JUSTICE, IN VIOLATION OF THE SPECIFIC DIRECTIONS CONTAINED IN T HE ORDER OF THE TRIBUNAL. THE LD. I.T.A NO.295/ASR/2016 7 CIT(A) FORWARDED THESE SUBMISSIONS OF THE ASSESSEE TO THE AO. THE AO, IN HIS LETTER (IMPUGNED ORDER, PAGES 19-20) DID NOT RESPON D TO THE ASSESSEES OBJECTIONS. 15. THE LD. CIT(A) HAS NOT ADJUDICATED THIS GRIEVAN CE OF THE ASSESSEE, THOUGH AT PAGE 21, IN PARA 6.5 OF HIS ORDER, HE STATES THAT H E HAS CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE VIDE LETTERS DATE D 13.08.2007, 19.08.2008, 20.08.2008 AND 11.08.2015. HOWEVER, HE HAS HELD ( IMPUGNED ORDER, PAGE 21, 19 TH LINE FROM THE BOTTOM ONWARDS) THAT: 6.5 .I AM FURTHER OF THE OPINION THAT THEASSES SEE COULD NOT PROVE THAT THE GIFT RECEIVED BY ME ASSESSEE FRO M SH. PRITAM SINGH IS GENUINE. THE STATEMENT OF THE ASSESSEE AND THAT OF PRITAM SINGH CLEARLY SHOW THAT THE ASSESSEE DO NOT HAVE ANY WITH SH. PRITAM SINGH. IT HAS ALSO BEEN NOTICED THA T THE HONOURABLE PUNJAB & HARYANA HIGH COURT HAS ALSO REV ERSED THE DECISIONS OF LOWER AUTHORITIES ON THE GENUINENE SS OF OTHER GIFTS. UNDER SUCH CIRCUMSTANCES, THE GIFT FROM SH. PRITAM SINGH CANNOT BE TREATED AS GENUINE LOOKING TO OVERALL FAC TS OF THE CASE. 6.6 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OF FICER IS FULLY JUSTIFIED IN MAKING ADDITION OF RS.5,00,000/- ON AC COUNT OF UNEXPLAINED GIFT STATED TO BE RECEIVED FROM SH. PRI TAM SINGH. THE ADDITION OF RS.5,00,000/- MADE BY THE ASSESSING OFFICER IS, THEREFORE, UPHELD. IN THE RESULT, THE GROUND NO.2 O F APPEAL TAKEN BY THE ASSESSEE IS DISMISSED. I.T.A NO.295/ASR/2016 8 16. IN THE ABOVE FACTS AND CIRCUMSTANCES, THE GRIEV ANCE OF THE ASSESSEE IS FOUND TO BE JUSTIFIED. IT IS ACCEPTED. IN KEEPING WITH TH E CIT VS. FCS (SUPRA), THE ADDITION IS DELETED. 17. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/03/2017. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUTANT MEMBER JUDICIAL MEMBER DATED: 16 /03/2017 *AKV* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT BY ORDER AR/SR.P.S./P.S.