SHRI SANJAY KUMAR BHAYARE, Harda V. THE ITO 2, Itarsi

ITA 306/IND/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0438 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: YASHWANT SHARMA
• Keywords: Depreciation; Principle of natural justice; Notional interest
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 306/IND/2014 A.Y. : 2007-08 SHRI SANJAY KUMAR BHAYARE, ITO, WARD 2, PROP. SONAL AGRO SERVICE CENTER, MASAGAON, HARDA VS ITARSI. APPELLANT RESPONDENT PAN NO. AGUPB6362N APPELLANT BY : SHRI YASHWANT SHARMA, C. A. RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 02 . 0 7 .201 5 DATE OF PRONOUNCEMENT : 02 . 0 7 .201 5 -: 2: - 2 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), BILASPUR, DATED 03.12.2013 FOR THE ASSE SSMENT YEAR 2007-08. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF HON'BLE CIT(A) IS BAD IN LAW, UNTENABLE AND IS LIABLE TO BE QUASHED. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE CIT(A) ERRED IN FRAMING THE APPELLATE ORDER EX-PARTE. 3. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN MAKING AND HON'BLE CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 95,670/- ON ACCOUNT OF NOTIONAL INTEREST @ 15% P.A. ON ADVANCES AND DEPOSITS FROM VARIOUS PARTIES. -: 3: - 3 4. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN MAKING AND HON'BLE CIT(A) IN CONFIRMING ADDITION OF RS. 1,440/- & RS. 8,130/- ON ACCOUNT OF DEPRECIATION ON MACHINERY & CAR RESPECTIVELY. 5. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN MAKING AND HON'BLE CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 48,572/- ON ACCOUNT OF INSUFFICIENT HOUSE HOLD WITHDRAWALS. 6. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN MAKING AND HON'BLE CIT(A) ERRED IN CONFIRMING AD HOC ADDITION OF RS 50,000/- ON ACCOUNT OF SALARY. 7. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN MAKING AND HON'BLE CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 25,663/- BEING 1/5 TH OUT OF EXPENDITURE ON ADVERTISEMENT, CONVEYANCE, ELECTRICITY, OFFICE, REPAIR & MAINTENANCE AND TELEPHONE. -: 4: - 4 8. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN MAKING AND HON'BLE CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS. 52,494/- OU T OF BANK INTEREST. 3. THE APPEAL WAS INSTITUTED ON 28.05.2010 AGAINST THE ORDER OF ITO, WARD-2, ITARSI U/S 144 OF THE INCOME -TAX ACT, 1961. DATED 17.12.2009 FOR ASSESSMENT YEAR 2007-08. THE NOTICE U/S 250 OF THE ACT WAS ISSUED BY THE LD. CIT (A) ON 25.07.2013 FIXING THE DATE OF HEARING ON 16.08.2013 . THE NOTICE WAS SERVED ON THE ADDRESS GIVEN IN THE APPEA L MEMO BY SPEED POST. THEREAFTER THE NOTICES WERE ISSUED ON 2 7.08.2013 AND 12.11.2013 FIXING THE DATES OF HEARING ON 10.09 .2013 AND 28.11.2013 RESPECTIVELY. NOTICE ISSUED EARLIER ON 2 2.11.2012 WAS ALSO NOT COMPLIED BY THE ASSESSEE. ON NONE OF T HE DATES, THE ASSESSEE OR HIS AUTHORIZED REPRESENTATIVE APPEA RED NOR ANY WRITTEN SUBMISSION WAS EVER SUBMITTED. ACCORDIN GLY, THE LD. CIT(A) DISPOSED OF THE APPEAL EX-PARTE. 4. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD . AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE OPPORT UNITY OF HEARING WAS NOT GIVEN TO THE ASSESSEE. THE LD. AUTH ORIZED -: 5: - 5 REPRESENTATIVE FILED AN AFFIDAVIT SWORN BY THE ASSE SSEE STATING ON OATH THAT HE WAS AN AGRICULTURIST AND IT WAS HIS FIRST BUSINESS VENTURE. HE HAD SOME PROBLEMS 4-5 YEARS BE TWEEN 2008 TO 2014. THE ASSESSEE BECAME DEFAULTER OF BANK AND HAD LOT OF DUES TOWARDS CREDITORS/LENDERS WHO WERE AFTE R HIM. THE ASSESSEE WAS MENTALLY, FINANCIALLY AND PHYSICALLY B ROKEN AND HAD TO LEAVE HIS PLACE AND MOST OF THE TIME WAS RES IDING AT KHANDWA TO LOOK AFTER HIS AILING MOTHER. HIS BUSINE SS WAS SHATTERED AND THAT IS WHY THE NOTICES SENT BY LD. C IT(A) AND AO WERE NOT BEING COMPLIED BY HIM. THEREFORE, LD. AUTHORIZED REPRESENTATIVE PRAYED THAT ONE OPPORTUNITY MAY BE G IVEN AND THE APPEAL MAY BE RESTORED TO THE LD. CIT(A). 5. THE LD. SENIOR D.R. DID NOT OBJECT TO IT. 6. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. I FIND THAT THE LD. CIT(A) HAS SIMPLY DISMISSED THE A PPEAL BY SERVING NOTICES AND NON-COMPLIANCE OF THEM BY THE A SSESSEE. I HAVE GONE THROUGH THE AFFIDAVIT AND FIND THAT THE A SSESSEE WAS IN TROUBLE AS HE WAS MENTALLY, FINANCIALLY AND PHYS ICALLY BROKEN, HE HAD TO LEAVE THE PLACE. THE PRINCIPLE O F AUDI -: 6: - 6 ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRESSION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN OPPORTUNITY TO DEFEND HIMSELF. THIS PRINCI PLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE, RIGHT TO REBUT ADVERSE E VIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGAL REPRESEN TATION, DISCLOSURE OF EVIDENCE TO PARTY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKI NG ORDERS. I FIND THAT THE RIGHT OF HEARING IS DECIDED BY THE HO N'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI VS. UNIO N OF INDIA, WHEREIN HON'BLE SUPREME COURT HAS HELD THAT RULE OF FAIR HEARING IS NECESSARY BEFORE PASSING ANY ORDER. I FIND THAT IT IS PRE-DECISION HEARING STANDARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. I FIND THAT IN THIS INSTANT CASE, THE ASSESSEE WAS NOT GIVEN PROPER HEARING. THEREFORE, I AM OF TH E VIEW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPORTUNITY OF HEARING AND TO REPRESENT HIS CASE. THEREFORE, I ALLOW THIS APPEAL. THE ASSESSEE IS DIRECTED TO REMAIN PRESENT BEFORE THE L D. CIT(A) WITHIN 2 MONTHS AFTER THE RECEIPT OF THIS ORDER. TH E LD. CIT(A) -: 7: - 7 SHOULD DECIDE THE APPEAL AFTER GIVING DUE OPPORTUNI TY OF HEARING TO THE ASSESSEE AS PER LAW. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTIC AL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 2 ND JULY, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 2 ND JULY, 2015. CPU* 2.7