KISHORE MOTIRAM MALANI, MUMBAI V. ITO 9(2)(2), MUMBAI

ITA 3169/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2081 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Keywords: Unexplained investment; Principle of natural justice
• Section: 143(3); 69

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 3169 /MUM/2013 ( / ASSESSMENT YEAR : 2006-07) MR. KISHORE MOTIRAM MALANI 1401-1402, HICONS ENCLAVE 14 TH ROAD, PLOT NO. 7, KHAR(WEST), MUMBAI-400 052 / V. ITO WARD 9(2)(2), MUMBAI. ./ PAN : AFOPM6618M ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY NONE REVENUE BY : SHRI A.RAMACHANDRAN / DATE OF HEARING : 06-10-2016 / DATE OF PRONOUNCEMENT : 04-11-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE BEING ITA NO. 31 69/MUM/2013, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 08 TH MARCH, 2013 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 20, M UMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2006- 07, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE PENALTY ORDER DATED 22 ND MARCH 2012 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 271(1)(C) OF THE INCOME TAX ACT,1961 (HEREINAFTER CALLED THE ACT) LEVYING PENALTY OF RS.3,28,691/- AGAINST THE ASSESSEE. ITA 3169/MUM/2013 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. THE AO HAS ERRED IN RAISING PENALTY OF RS. 3286 91/- 2. THE AO HAS ERRED IN ADDING RS. 10 LACS AS UNDIS CLOSED INCOME. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AGGRIEVED BY THE LEVY OF PENALTY OF RS.3,28,691/- BY THE AO U/S. 271(1)(C ) OF THE ACT VIDE ORDER DATED 22.03.2012 WITH RESPECT TO ADDITIONS MADE BY THE AO IN QUANTUM ASSESSMENT ON ACCOUNT OF LOAN REPAYMENT OF CREDIT C ARD BEING TOWARDS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT . THE ASS ESSEE HAVING AVAILED PERSONAL LOAN FROM CITI BANK AND REPAID THE SAME TH ROUGH EMI , WHEREBY THE CREDIT CARD PAYMENTS TO THE TUNE OF RS.10,18,266/- WERE MADE AND THE ASSESSEE SUBMITTED THAT THESE PAYMENTS WERE FROM PE RSONAL LOANS BUT , HOWEVER, NO PERSONAL BALANCE SHEET WAS SUBMITTED TO SUBSTANTIATE THE SAME. THUS , THE AO CONCLUDED FROM THE STATEMENT OF AFFAI R AND CREDIT CARD STATEMENT SUBMITTED BY THE ASSESSEE THAT RS.10,00,0 00/- HAS BEEN INVESTED IN THE FIXED ASSETS, INVESTMENTS ETC. DURING THE YE AR UNDER CONSIDERATION OUT OF UNDISCLOSED INCOME WHICH HAS BEEN UTILIZED FOR R EPAYMENT OF THE CREDIT CARDS PERSONAL LOANS. THE QUANTUM ASSESSMENT FRAME D BY THE AO U/S 143(3) OF THE ACT WAS CONFIRMED BY LEARNED CIT(A) IN FIRST APPELLATE PROCEEDINGS. IN PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT , THE ASSESSEE DID NOT SUBMIT ANY DETAILS BEFORE THE AO AND THE AO LEVIED PENALTY OF RS. 32,8,691/- U/S 271(1)(C) OF THE ACT , ON THE AMOUNT OF RS.10,0 0,000/- WHICH WAS SUBJECT MATTER OF QUANTUM ADDITIONS VIDE ASSESSMENT ORDER P ASSED U/S 143(3) OF THE ACT , WITH RESPECT TO WHICH THE AO HELD THAT THE A SSESSEE HAD FILED INACCURATE PARTICULARS OF INCOME AND PENALTY OF RS.3,28,691/- WAS LEVIED BY THE AO U/S 271(1)(C) OF THE ACT VIDE PENALTY ORDERS DATED 22. 03.2012. THE PENALTY SO ITA 3169/MUM/2013 3 LEVIED U/S 271(1)(C) OF THE ACT WAS CONFIRMED BY LE ARNED CIT(A) IN HIS APPELLATE ORDERS IN FIRST APPEAL VIDE APPELLATE OR DERS DATED 08-03-2013. IN THE APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A), TH E ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN THE PROCESS OF FILING SECOND APP EAL WITH THE TRIBUNAL AGAINST QUANTUM ASSESSMENT. 4. AGGRIEVED BY THE APPELLATE ORDERS DATED 08-03-20 13 OF LEARNED CIT(A), THE ASSESSEE FILED SECOND APPEAL WITH THE TRIBUNAL. NON E APPEARED FOR THE ASSESEE. THE LD DR BROUGHT TO OUR NOTICE THAT THE T RIBUNAL HAS DECIDED THE SECOND APPEAL OF THE ASSESSEE WITH RESPECT TO QUANT UM ASSESSMENT IN ITA NO. 2367/MUM/2013 VIDE ORDERS DATED 29.06.2015 WHEREBY THE TRIBUNAL HAS SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE T HE ISSUE RELATING TO THE ADDITION OF RS.10 LACS TO THE FILE OF LEARNED CIT(A ) FOR HIS FRESH CONSIDERATION AND ADJUDICATION OF APPEAL AFRESH , COPY OF ORDER O F THE TRIBUNAL IS PLACED IN FILE. WHILE LEARNED DR RELIED UPON THE ORDER OF LEA RNED CIT(A) BUT CONCEDED THAT THE TRIBUNAL WITH RESPECT TO QUANTUM ADDITION HAS SET ASIDE AND RESTORED THE MATTER TO THE FILE OF LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE MATERIAL ON RECORD INCLUDING THE AFIRE-STATED TRIBUNAL ORDER. W E HAVE OBSERVED THAT WITH RESPECT TO QUANTUM ADDITIONS MADE BY THE AO VIDE AS SESSMENT ORDER FRAMED U/S 143(3) OF THE ACT , THE TRIBUNAL IN ITA NO. 236 7/MUM/2013 VIDE ORDERS DATED 29.06.2015 HAS SET ASIDE THE ORDER OF LEARNED CIT(A) CONFIRMING THE ADDITION BACK TO THE FILE OF LEARNED CIT(A) FOR DE- NOVO DETERMINATION OF THE ISSUE BY HOLDING AS UNDER: 3. WE HEARD LD. D.R. AND ALSO PERUSED THE RECORD. ADMITTEDLY THE ADDITION OF RS. 10.00 LAKHS HAS BEEN MADE FOR WANT OF DETAILS RELATING TO THE SOURCES FOR MAKING PAYMENTS TOWARDS CREDIT CARD DUES AND LOAN REPAYMENTS. THE REASON CITED BY LD A.R FOR THE FAIL URE OF THE ASSESSEE TO ITA 3169/MUM/2013 4 APPEAR BEFORE LD CIT(A) APPEARS TO BE REASONABLE TO US. FURTHER, THE LD A.R SUBMITS THAT THE ASSESSEE WOULD BE IN POSITION TO FURNISH RELEVANT DETAILS, IF AN OPPORTUNITY IS GIVEN. HENCE, IN THE INTEREST OF NATURAL JUSTICE ,WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE PRO VIDED ONE MORE OPPORTUNITY , SINCE THE LD CIT(A) HAS PASSED THE OR DER WITHOUT HEARING THE ASSESSEE. 4. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE MATTER RELATING TO THE ADDITION OF RS. 10.00 LAKHS TO HIS FILE FOR HIS FRESH CONSIDERATION. THE ASSESSEE IS ALSO DIRECTED TO APP EAR BEFORE THE LD CIT(A) ON 24-08-2015 IN CONNECTION WITH HIS APPEAL AND FURNISH RELEVANT DETAILS BEFORE HIM, AFTER WHICH THE LD CIT(A) MAY P ROCEED TO DISPOSE OF THE APPEAL AS EXPEDITIOUSLY AS POSSIBLE IN ACCORDAN CE WITH LAW. IN VIEW OF AFORE-STATED ORDER OF THE TRIBUNAL, PENA LTY OF RS. 3,28,691/- LEVIED BY THE AO U/S 271(1)(C) OF THE ACT AND AS CONFIRMED BY LEARNED CIT(A) , ON THE SAME ISSUES AS ARE SUBJECT MATTER OF QUANTUM ADDITI ONS IN ASSESSMENT FRAMED U/S.143(3) OF THE ACT, WILL NOT SURVIVE AND HENCE IS ORDERED TO BE DELETED SUBJECT TO CONDITIONS STATED HEREINAFTER . SINCE THE TRIBUNAL HAS SET ASIDE AND RESTORED THE ISSUE VIDE AFORE-STATED ORDE RS DATED 29-06-2015 IN ITA NO. 2367/MUM/2013 TO THE FILE OF LEARNED CIT(A) FOR DE-NOVO ADJUDICATION OF APPEAL ON MERITS WITH RESPECT TO QUANTUM ADDITIONS , IT WILL BE APPROPRIATE THAT THE AO SHALL BE ENTITLED TO INITIATE AND LEVY THE PENALTY AFRESH U/S 271(1)(C) OF THE ACT , IF SO REQUIRED AFTER ADJUDIC ATION OF THE APPEAL BY LEARNED CIT(A) W.R.T. QUANTUM ADDITIONS WHICH WERE MADE BY THE AO VIDE ASSESSMENT FRAMED U/S 143(3) OF THE ACT , AS DIRECTED BY THE T RIBUNAL IN ITS ORDERS DATED 29.06.2015 IN ITA NO. 2367/MUM/2013. WE ORDER ACCOR DINGLY. ITA 3169/MUM/2013 5 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 3169/MUM/2013 FOR THE ASSESSMENT YEAR 2006-07 IS AL LOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH NOVEMBER, 2016. # $% &' 04-.11-2016 ( ) SD/- SD/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 04-11-2016 [ !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. 9 / CIT- CONCERNED, MUMBAI 5. <=( >>?@ , ?@ , $ / DR, ITAT, MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER, < > //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI