PRADEEP B. AGARWAL, MUMBAI V. ITO 17(2)(2), MUMBAI

ITA 3108/MUM/2010

• Counselvise Citation: 310819914 RSA 2010
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 18-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S RAWAL
• Assessee Lawyers: C V DHARKAR
• Keywords: Unexplained cash credit; Business income; Opportunity of being heard; Set aside
• Section: 68; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH ( A.M ) ITA NO.3108/MUM/2010 (ASSESSMENT YEAR: 2006-07) PRADEEP B.AGARWAL BABUBHAI TERRACE, DR.AMBEDKAR ROAD, MATUNGA (C.R.), MUMBAI-400019. PAN: AABPA2686B INCOME TAX OFFICER 17(2)(2), MUMBAI. APPELLANT V/S RESPONDENT APPELLANT BY : SHRI C .V.DHARKAR RESPONDENT BY : SHRI R.S.RAWAL O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15.1.2010 PASSED BY THE LEA RNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN INDIVIDUAL DERIVES BUSINESS INCOME ON SALES, CO MMISSION AND HIRE CHARGES, FILED RETURN DECLARING TOTAL INCO ME AT RS.1,79,976/-. THE AO OBSERVED THAT THE RETURN OF I NCOME WAS ACCOMPANIED BY COMPUTATION OF TOTAL INCOME, PR OFIT AND LOSS ACCOUNT AND OTHER RELEVANT DETAILS, HOWEVER, N O BALANCE SHEET WAS NOT FILED. DURING THE COURSE OF ASSESSM ENT, THE ASSESSEE WAS ASKED TO FURNISH THE COPY OF BALANCE S HEET AND SOURCES OF CASH DEPOSIT OF RS.16,14,400/- AS PER A IR ITA NO.3108/MUM/2010 (ASSESSMENT YEAR: 2006-07) 2 INFORMATION. IN THE ABSENCE OF ANY COMPLIANCE, THE AO ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME T AX ACT, 1961, (THE ACT) TO THE BANK I.E.DHANLAXMI BANK LI MITED, MATUNGA BRANCH, MUMBAI TO FURNISH THE BANK STATEMEN T FOR THE PERIOD 1.4.2005 TO 31.3.2006 WHICH WAS FURNISH ED BY THE BANK. ON VERIFICATION OF THE BANK STATEMENT, THE A O NOTED THAT THE ASSESSEE HAS DEPOSITED CASH AGGREGATING T O RS.16,14,400/- ON VARIOUS DATES. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF SOURCES OF ABOVE SAID DEPO SITS. IN RESPONSE, THE ASSESSEE FILED LETTER INTERALIA STAT ING THAT THE DEPOSITS OF RS.16,14,400/- WAS MADE OUT OF CASH WITHDRAWALS OF RS.10,80,660/- AND HENCE NET CASH DEPOSITS ARE OF RS.5,33,740/-/. ON FURTHER VERIFICATION OF T HE SAID BANK STATEMENT, THE AO FOUND THAT THERE ARE CASH DEPOSI TS DURING THE YEAR TO THE TUNE OF RS.34,38,816/-. IN THIS RE GARD, THE ASSESSEE SUBMITTED THAT THE SAID DEPOSITS ARE OUT O F VARIOUS BORROWINGS DURING THE YEAR. THE AO OBSERVED THAT TH E ASSESSEE COULD NOT EXPLAIN THE DEPOSITS AGGREGATING TO RS.2,41,250/-. THE AO FURTHER NOTED THAT THE ASSES SEE ALSO FAILED TO EXPLAIN THE CASH DEPOSIT OF RS.5,33,740/ - FOR WHICH THE ASSESSEE AGREED FOR ADDITION OF RS.7,00,000/-. SINCE THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF C HEQUE DEPOSITS OF RS.2,41,450/-, THE AO ADDED THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE AC T AND ACCORDINGLY COMPLETED THE ASSESSMENT AT AN INCOME OF ITA NO.3108/MUM/2010 (ASSESSMENT YEAR: 2006-07) 3 RS.11,31,040/- VIDE ORDER DATED 30.12.2008 PASSED UNDER SECTION 143(3) OF THE ACT. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (A) PROVIDED SEVERAL OPPORTUNITIES TO THE ASSESSEE, HOWEVER, THE ASSESS EE FAILED TO MAKE THE COMPLIANCE, THEREFORE, THE LEARNED COMM ISSIONER OF INCOME TAX (A) WHILE OBSERVING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL RELIED ON THE DEC ISION IN THE CASE OF CIT VS. MULTIPLAN INDIA (P) LTD., REPORTED IN 38 ITD 320 (DEL) AND DISMISSED THE APPEAL IN LIMINE. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A), THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE DISMIS SAL OF THE APPEAL INLIMINE AND SUSTENANCE OF ADDITION OF RS.2 ,41,250/-. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE MAKES AN ORAL REQUEST TO THE BENCH TO ADM IT EVIDENCE IN THE FORM OF VARIOUS STATEMENTS OF ACCO UNT ETC. TO DECIDE THE ISSUE. 5. ON THE OTHER HAND, THE LEARNED D.R. SUBMITS THA T SINCE THE SAME WAS NOT FILED BEFORE THE LEARNED COMMISSI ONER OF INCOME TAX (A) AND THE LEARNED COMMISSIONER OF INCO ME TAX (A) HAS PASSED EX-PARTE ORDER WITHOUT CONSIDERING T HE SAME, THEREFORE, IN THE INTERESTS OF JUSTICE THE MATTER M AY BE SET ITA NO.3108/MUM/2010 (ASSESSMENT YEAR: 2006-07) 4 ASIDE TO THE FILE OF THE LEARNED COMMISSIONER OF IN COME TAX (A) WHICH WAS NOT OBJECTED TO BY LEARNED COUNSEL FO R THE ASSESSEE. 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECO RD, WE FIND THAT THERE IS NO DISPUTE THAT THE LEARNED COMMISSI ONER OF INCOME TAX (A) HAS PASSED THE EX-PARTE ORDER WITHOU T CONSIDERING ANY MATERIAL AVAILABLE ON RECORD. THI S BEING SO AND KEEPING IN VIEW THAT THE ORDER PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX (A) IS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 250(6), WHEREIN IT HAS BE EN PROVIDED THAT THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME TAX (A) DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE D ECISION THEREON AND THE REASON FOR THE DECISION, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD G O BACK TO THE FILE OF THE LEARNED COMMISSIONER OF INCOME TAX (A) AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE L EARNED COMMISSIONER OF INCOME TAX (A) AND SEND BACK THE MA TTER TO HIS FILE TO DECIDE THE SAME AFRESH AND IN ACCORDAN CE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.3108/MUM/2010 (ASSESSMENT YEAR: 2006-07) 5 7. IN THE RESULT, THE ASSESSEES APPEAL STANDS PART LY ALLOWED FOR STATISTICAL PURPOSES.. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY,2011. SD SD (RAJENDRA SINGH ) (D.K.A GARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 20 TH MAY, 2011 SRL:18511 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILED. TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI