JYOTI H. MEHTA, MUMBAI V. DCIT CC-23, MUMBAI

ITA 3211/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75863 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 12-03-2014
• Assessment Year: 1992-1993
• Appeal Filed On: 09-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Opportunity of being heard
• Section: 131

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J B ENCH, MUMBAI , , ! '#$ , % & BEFORE SHRI VIJAY PALO RAO AND SHRI N.K. BILLAIY A, AM ./ I.T.A. NO.3211/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR :1992-93 SMT. JYOTI H. MEHTA, 32, MADHULI, DR. A.B. ROAD, WORLI, MUMBAI-400 018 / VS. THE ACIT, CC-23, AAYAKAR BHAVAN, MUMBAI-400 020 ./ I.T.A. NO.3172/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR :1992-93 THE ACIT, CC-23, AAYAKAR BHAVAN, MUMBAI-400 020 / VS. SMT. JYOTI H. MEHTA, 32, MADHULI, DR. A.B. ROAD, WORLI, MUMBAI-400 018 ( % ./ ) ./ PAN/GIR NO. : ABNPM 8233B ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / ASSESSEE BY: SHRI DHARMESH SHAH +,(* . - / REVENUE BY: DR. P. DANIEL . /0% / DATE OF HEARING :12.03.2014 12' . /0% / DATE OF PRONOUNCEMENT :21.03.2014 3 / O R D E R PER N.K. BILLAIYA, AM: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-40, M UMBAI DT.29.02.2012 PERTAINING TO A.Y. 1992-93. ITA NOS. 3172 & 3211/M/12 2 ITA NO. 3211/MUM/2012 ASSESSEES APPEAL 2. THE ASSESSEE HAS RAISED 26 SUBSTANTIVE GROUNDS OF APPEAL AND ONE ADDITIONAL GROUND. HOWEVER, AT THE VERY OUTSET, TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUND NO. 2 IS THE MOST RE LEVANT GROUND FOR THE CONSIDERATION. GROUND NO. 2 READS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN NO T DETERMINING THE INCOME BASED ON THE FINAL BOOKS OF ACCOUNT THEREBY CONFIRMING THE MANNER OF DETERMINATION OF INCOME BY THE AO. THE LD. CIT(A) OUGHT TO HAVE ACCEPTED B OOK RESULTS SHOWN BY THE APPELLANT. 3. IT IS THE SAY OF THE LD. COUNSEL THAT THE ISSUE S INVOLVED IN THIS APPEAL ARE COVERED BY THE DECISION OF THE TRIBUNAL IN HARSHAD MEHTA GROUP OF CASES. THE LD. COUNSEL DREW OUR ATTENTION TO PAGE-3 OF THE ORDER OF THE LD. CIT(A) AND REFERRING TO POINT-B, THE ISSUE TO BE DECIDED BY THE LD. CIT(A). POINT-B READS AS UNDER: WHETHER THE INCOME OUGHT TO HAVE BEEN DETERMINED B ASED ON THE BOOKS OF ACCOUNTS AND WHETHER THE REJECTION OF BOOKS OF ACCOUNT IS PROPER 4. WHILE DECIDING THIS ISSUE, THE LD. CIT(A) AT PAR A-7.3 ON PAGE-5 OF HIS ORDER FOLLOWED THE FINDINGS IN THE CASE OF SHRI ASHWIN S. MEHTA FOR A.Y. 1992-93 AND REPRODUCED THE FINDINGS GIVEN BY T HE LD. CIT(A) IN THAT CASE. THE LD. COUNSEL ALSO DREW OUR ATTENTION TO THE ORDER OF THE LD. CIT(A) IN THE CASE OF SHRI HITESH MEHTA FOR A.Y. 19 92-93 WHICH IS AT PAGE-10 OF THE PAPER BOOK AND AT PAGE-11 UNDER THE HEADING ISSUES TO BE DECIDED. ITA NOS. 3172 & 3211/M/12 3 5. AN IDENTICAL ISSUE HAS BEEN FRAMED IN THE CASE O F THE IMPUGNED ASSESSEE AS GIVEN AT PARA 7.3 OF THE ORDER OF THE L D. CIT(A), IDENTICAL FINDINGS ARE GIVEN BY THE LD. CIT(A). THE LD. COUN SEL TOOK US TO THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI HITESH MEHTA IN ITA NO. 538/M/2012. THE TRIBUNAL AT PARA-5 ON PAGE-5 OF IT S ORDER HELD AS UNDER: AFTER CONSIDERING ALL THE RELEVANT MATERIAL, WE FO UND THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE ASSESS ING OFFICER TO PASS A FRESH ORDER. IT IS SEEN THAT FOR REJECTING T HE BOOKS OF ACCOUNT, THE AO HAS NOT GIVEN ANY VALID REASONS AS NO SPECIFIC DEFECT HAS BEEN POINTED OUT IN THE BOOKS OF ACCOUNT , THEREFORE IN OUR VIEW THE ASSESSING OFFICER SHOULD GO THROUGH TH E BOOKS FOR DETERMINING THE INCOME ON THE BASIS OF BOOKS ACCOUN TS. THE ASSESSING OFFICER HAS TO BRING ON RECORD SPECIFIC E VIDENCE OR DEFECT TO PROVE FALSITY OF BOOKS OF ACCOUNT AS NO F ALSITY HAS BEEN PROVED IN THE ASSESSMENT ORDER PASSED BY THE AO. BE SIDES THIS THE DEPARTMENT HAS TO PROVIDE ALL THE DETAILS AND M ATERIAL ON WHICH BASIS THE ADDITION HAVE BEEN MADE EARLIER. IF SUCH MATERIAL IS DISPUTED BY THE ASSESSEE THEN IN OUR VIEW CORREC TNESS OF SUCH MATERIAL HAS TO BE EXAMINED AS PER PROVISION OF LAW . WE ARE NOT CONVINCED WITH THE ARGUMENT OF LD.DR THAT ASSESSEE CAN COLLECT INFORMATION FROM PARTIES FROM WHERE ASSESSING OFFIC ER HAS OBTAINED THE COPIES ON WHICH BASIS THE ADDITION HAV E BEEN MADE. THEREFORE, ASSESSING OFFICER IS DIRECTED TO PROVIDE THE COPIES OF ALL INFORMATION ON WHICH BASIS, THE AO WANTED TO MA DE ADDITIONS IN THE HANDS OF THE ASSESSEE. IF THE AO DOES NOT PR OVIDE THE MATERIAL THEN IN OUR VIEW ADDITION CAN NOT BE MADE. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE SET ASIDE ORDER O F THE AUTHORITIES BELOW AND RESTORE THE ISSUES TO THE FIL E OF THE ASSESSING OFFICER TO PASS ASSESSMENT DE NOVO AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AND AS PER OBSERVATIONS OF OURS MADE IN THE ORDER AS ABOVE. WE ORDER ACCORDINGLY. 6. IT IS THE SAY OF THE LD. COUNSEL THAT FACTS AND ISSUES BEING IDENTICAL A SIMILAR DECISION SHOULD BE TAKEN. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPP OSED TO THIS STATING THAT THE BOOKS OF ACCOUNTS ARE PREPARED AFT ER 20 YEARS WITHOUT ANY INDEPENDENT VERIFICATION BY C.A. IT IS THE SAY OF THE LD. DR THAT THE AO ITA NOS. 3172 & 3211/M/12 4 HAS PROVIDED THE NECESSARY DETAILS TO THE ASSESSEE AS AND WHEN ASKED FOR. THE LD. DR ALSO SUBMITTED THAT THE ASSESSEE HAS NEV ER PIN-POINTED WHICH DETAIL WAS NOT PROVIDED TO HIM. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE DECISIO NS BROUGHT TO OUR NOTICE WHICH ARE PLACED IN THE PAPER BOOK BEFORE US. WE F IND FORCE IN THE CONTENTION OF THE LD. COUNSEL, FOLLOWING THE JUDICI AL DECISIONS, FINDINGS OF THE TRIBUNAL IN THE CASE OF HITESH MEHTA MENTION ED HEREINABOVE DESERVES TO BE FOLLOWED. RESPECTFULLY FOLLOWING TH E FINDINGS OF THE TRIBUNAL, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE TO THE FILES OF THE AO TO PASS ASSESSMENT DEN OVO IN THE LINE OF THE DIRECTIONS GIVEN BY THE TRIBUNAL IN THE CASE OF HIT ESH S. MEHTA VIDE ITA NO. 538/M/2012. THE AO IS FURTHER DIRECTED TO DECI DE THE ISSUE IN THE LIGHT OF THE FOLLOWING LINES. (I) THE ASSESSING AUTHORITY HAS TO STRICTLY FOLLOW THE EARLIER ORDERS OF THE TRIBUNAL ON RESPECTIVE SUBJECTS. (II) WHEREVER THE ADDITIONS ARE PROPOSED ON THE BA SIS OF SIZED MATERIAL OR MATERIALS COLLECTED FROM THIRD PARTIES, THE COPIES THEREOF NEED TO BE PROVIDED TO THE ASSESSEE. IF RE QUESTED FOR, THE ASSESSEE MUST BE GIVEN AN OPPORTUNITY TO CROSS- EXAMINE THE CONCERNED PARTIES. (III) ADDITIONS SHOULD NOT BE REPEATED ON THE BASIS OF THE PRESUMPTIONS AND INFERENCES. ADDITIONS MUST BE MAD E ONLY ON THE BASIS OF MATERIALS AND EVIDENCES AVAILABLE O N RECORD. (IV) BOOKS OF ACCOUNT SHOULD NOT BE REJECTED ON FLI MSY GROUNDS AND SHOULD BE ACTED UPON. (V) THE AO HAS TO ACCEPT THE REQUEST OF THE ASSESSE E FOR OBTAINING MATERIALS FROM THE CUSTODIAN, BANKS AND COMPANIES ETC. FOR THAT MATTER, WHEREVER NECESSARY , THE AO MAY ISSUE SUMMONS U/S. 131 AND THE INQUIRIES MUS T BE MADE EFFECTIVE AND FRUITFUL. THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSE. ITA NOS. 3172 & 3211/M/12 5 9. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE REA DS AS UNDER: THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS P ER THE DECISION OF HONBLE SPECIAL COURT DT. 30.4.2010 IN MP NO. 41 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEH TA AND HENCE THE INCOME ASSESSED BY THE AO OUGHT TO HAVE B EEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NO T IN THE HANDS OF THE APPELLANT. 10. AN IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN THE CASE OF SHRI HITESH S. MEHTA VIDE ITA NOS. 5587 TO 5589/M/2011 A ND 5068/M/2011. 10. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONC EDED TO THIS. 11. WE HAVE THE BENEFIT OF THE ORDER OF THE TRIBUNA L IN THE CASE OF HITESH S. MEHTA (SUPRA). WE FIND THAT A SIMILAR AD DITIONAL GROUND WAS RAISED WHICH HAS BEEN CONSIDERED BY THE TRIBUNAL AT PARA-4 ON PAGE-4 OF ITS ORDER AND AT PARA-5, THE TRIBUNAL HAS HELD THAT THIS ADDITIONAL GROUND IS FULLY ACADEMIC IN NATURE FOR THE REASON THAT IF THE HONBLE SUPREME COURT DECIDES SOMETHING THAT HAS TO BE FOLLOWED WITHOUT A NY DISPUTE. THE DECISION OF THE HONBLE SUPREME COURT BECOMES THE L AW OF THE LAND WHICH HAS TO BE FOLLOWED BY EVERY AUTHORITY. THE T RIBUNAL FURTHER OBSERVED THAT NO DIRECTION IS REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT BECAUSE IF THE HONBLE APEX COURT DECIDES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD MEHTA, THEN THE INCOME HAS TO BE ASSE SSED IN THE HANDS OF SHRI HARSHAD S MEHTA NOT IN THE HANDS OF ANY OTHER PERSON. RESPECTFULLY FOLLOWING THE AFORESTATED FINDINGS, WE TREAT THE AD DITIONAL GROUND AS ACADEMIC IN NATURE. ITA NOS. 3172 & 3211/M/12 6 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 3172/M/2012 REVENUES APPEAL 13. THE GRIEVANCE OF THE REVENUE READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING TO WORK OUT THE AMOUNT OF ENHANCEMENT AFTER TAKING INTO CONSIDERATI ON ALL THE ACCOUNTS EXCEPT THE LEDGER ACCOUNT OF SMT. JYOT I H. MEHTA HAVING BALANCE OF RS. 531.90 CRORES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO R ECONCILE DIFFERENCE IN LEDGER BALANCE ON THE BASIS OF WHICH ENHANCEMENT PROPOSAL WAS MOVED. 14. SINCE WE HAVE RESTORED ASSESSEES APPEAL BACK T O THE FILES OF THE AO FOR DENOVO ASSESSMENT, THIS GRIEVANCE OF THE REV ENUE IS ALSO RESTORED BACK TO THE FILES OF THE AO TO BE DECIDED AFRESH IN THE LINE OF THE DIRECTIONS GIVEN BY THE TRIBUNAL IN ASSESSEES APPE AL. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 21.03.2014 . 3 . 2' % 4 5 6 21.3.2014 2 . = SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 5 DATED 21.3.2014 . . ./ RJ , SR. PS ITA NOS. 3172 & 3211/M/12 7 3 . +/ >'/ 3 . +/ >'/ 3 . +/ >'/ 3 . +/ >'/ / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. ? ( ) / THE CIT(A)- 4. ? / CIT 5. @= +/ , , / DR, ITAT, MUMBAI 6. =A B / GUARD FILE. 3 3 3 3 / BY ORDER, ,/ +/ //TRUE COPY// C CC C / D D D D (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI