M/s. Ram Kishan Mittal, Noida V. ITO, Uttar Pradesh

ITA 3330/DEL/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69578 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEEHAR RANJAN
• Assessee Lawyers: ANS HUM JAIN
• Keywords: Opportunity of being heard; Principle of natural justice; Source of fund
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.-3330/DEL/2013 (ASSESSMENT YEAR-2007-08) M/S RAM KISHAN MITTAL, 59A, SUPER MIG, SECTOR-93, NOIDA, UTTAR PRADESH PAN-AJRPM7901Q (APPELLANT) VS ITO, BARAUT(BAGHPAT) (RESPONDENT) APPELLANT BY SH. ANSHUM JAIN, ADV. RESPONDENT BY SH. NEEHAR RANJAN PANDEY, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 12.03.2013 OF CIT(A), MEERUT PERTAINING TO 2007-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THA T THE ORDER OF CIT(A) IS AGAINST THE ORDER OF CIT(A) IS AGAINST TH E LAW, FACTS, CIRCUMSTANCES NATURAL JUSTICE AND ALL OTHER PRINCIP LE AND RULES OF LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THAT THE ORDER U/S 143(3)/144 IS PASSED EX PARTE WITHOUT PROVIDING ANY OPPORTUNITY OF BEING HEARD WHICH IS AGAINST THE PRINCIPLE OF NATUR AL JUSTICE AND HENCE THE ASSESSMENT THEREON MUST BE QUASHED AS ERR ONEOUS AND VOID. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING AN ADDITION O F RS.15,26,800/- AND RS.30,450 AS UNEXPLAINED LOAN U/S 68 WHICH IS B ASED ON SURMISES AND CONJECTURES, CONTRARY TO PRINCIPLES OF NATURAL JUSTICE, ITA NO. 3330/DEL/13 2 FACTS AND PROVISION OF LAW AS SUCH THE ACTION OF CI T(A) NEED TO BE UNDONE AND THE ADDITION CONFIRMED BY HIM NEEDS TO B E DELETED. 2. AT THE TIME OF HEARING AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE REQUESTING FOR TIME. HOWEVER ON A CONSIDE RATION ON THE MATERIAL AVAILABLE ON RECORD IT WAS CONSIDERED APPROPRIATE T O REJECT THE SAME. THE RELEVANT FACTS OF THE CASE AS BORNE OUT FROM THE ASSESSMENT ORDER PASSED U/S 143(2)/144 OF THE ACT ARE THAT THE ASSESSEE WHO HAD DECLARED AN INCOME OF RS.1,00,946/- IN SCRUTINY ASSESSMENT WAS CONCLUDED AT AN INCOME OF R S.16,58,196 AS ADDITION OF RS. 15,26,800/- AND RS. 30,450 WERE MADE WHEREIN N OTICES WERE SENT TO THE LAST KNOWN ADDRESS OF THE ASSESSEE IN A BEST JUDGMENT AS SESSMENT EX-PARTE ORDER U/S144. THE REASONING OF THE AO FOR MAKING THE ADD ITION IS EXTRACTED HEREUNDER:- THE ASSESSSEE HAS SHOWN A LOAN OF RS.15,26,800/- F ROM ONE SHRI RAVINDRA FOR INVESTING IN A PROPERTY IN GREATER NOIDA. THE NATURE OF THE LOAN, MODE OF ACCEPTANCE, THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR I.E. SH. RAVINDRA COULD NOT ESTABLISHED AS THE QUERIES IN TH IS REGARD REMAINED UNANSWERED AND THE ASSESSEE REMAINED UNTRACEABLE. SIMILARLY A SUM OF RS.30,450/- FROM SH. AKASH SHARMA REMAINS UNEXPLAIN ED. HENCE CONSIDERING THESE LOANS TO BE UNEXPLAINED U/S 68 OF I.T ACT, 1961, THESE WERE PROPOSED TO BE ADDED TO THE RETURNED INCOME OF THE ASSESSEE. THEREAFTER THE ASSESSEE WAS SERVED BY AFFIXTURE ON THE LAST KNOWN ADDRESS, THE PROPOSED ASSESSMENT ORDER BRING OUT THE ASSESSE D INCOME AS RS.16,58,196/- AND CONSEQUENT TAX LIABILITY AT RS.6 ,62,580/- SINCE THE ASSESSEE DID NOT MAKE ANY COMPLIANCE DESP ITE AFFORDING CONSISTENT OPPORTUNITY AND CONCEALED THE PARTICULAR S OF HIS INCOME, HE IS LIABLE FOR THE PENALTY U/S 271(1)(C) OF IT ACT, 196 1. THERFORE THE ASSESSMENT IS COMPLETED AT RS,16,58,19 6/- AS GIVEN BELOW:- RETURNED INCOME :RS. 1,00,946/- ADD: UNEXPLAINED LOAN FROM SH. RAVINDRA, U/S68 :RS. 15,26,800/- ADD: UNEXPLAINED LOAN FROM SH. AKASH SHARMA,U/S 68: RS. 30,450 TOTAL :RS. 16,58,196/- ITA NO. 3330/DEL/13 3 3. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY I T WAS EXPLAINED BEFORE THE CIT(A) THAT THE ASSESSEE HAD BEEN ALLOTTED A PLOT O F LAND BY THE GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY ON 07.12.2006 FOR WHICH HE HAD PAID REGISTRATION AMOUNT OF RS.1,50,000/- AND WAS FURTHE R REQUIRED TO PAY RS.14,20,800/- ON OR BEFORE 07.03.2007. IT WAS CLAI MED THAT SINCE THE ASSESSEE WAS NOT IN A POSITION TO MAKE FURTHER PAYMENTS, HE ENTERED INTO AN AGREEMENT TO SELL THE PLOT TO SH. SANJAY TYAGI AND SH. RAVINDRA TYAGI FOR RS.18,01,000/-. OUT OF THIS AMOUNT RS.1,51,000/- WAS CLAIMED TO HAVE BE EN PAID TO THE ASSESSEE VIDE CHEQUE NO-542340 DATED 20.12.2006 BY THE VENDEE WHI CH WAS CREDITED TO THE BANK OF THE ASSESSEE. THE BALANCE PAYMENT OF RS.9, 70,800/- WAS CLAIMED TO HAVE BEEN PAID BY PAY ORDER AND RS.4,05,000/- BY DEMAND DRAFT DIRECTLY TO NOIDA AUTHROITY BY THE VENDEE I.E SH. RAVINDRA TYAGI. IN SUPPORT OF THE SAID CLAIM AS PER PARA 3.3 OF THE IMPUGNED ORDER BANK ACCOUNT OF THE SAID PERSON WITH THE ORIENTAL BANK OF COMMERCE FROM WHICH PAY ORDER HAD BEEN PURCHASED AND WITH ICICI BANK FROM WHICH DEMAND DRAFT HAD BEEN PURCHA SED WERE FURNISHED ON BEHALF OF THE ASSESSEE. ALONG WITH THAT THE AFFIDAV IT OF SH. RAVINDRA TYAGI WAS ALSO FURNISHED WHO AS PER THE IMPUGNED ORDER STATED THAT HE HAD RECEIVED COMPENSATION FOR LAND WHICH HAD BEEN DEPOSITED IN O RIENTAL BANK OF COMMERCE AND ICICI AND HE HAD ALSO ENTERED INTO AN AGREEMENT TO PURCHASE THE NOIDA PLOT OF THE ASSESSEE AND THE PAYMENTS WERE MADE FROM THA T COMPENSATION RECEIVED. 3.2. ADDRESSING THE LOAN RECEIVED FROM SH. AKASH SH ARMA IT WAS STATED THAT THE LOAN HAD BEEN RECEIVED BY THE CHEQUE, AFFIDAVIT BY SH. AKASH SHARMA CONFIRMING THE TRANSACTION WAS ALSO PLACED ON RECORD ALONGWITH COPY OF ASSESSEES BANK ACCOUNT IN WHICH THE AMOUNT HAD BEEN DEPOSITED WAS ALSO FURNISHED. ITA NO. 3330/DEL/13 4 4. AS PER PARA 3.4, THE EVIDENCE WAS CONSIDERED TO BE FRESH EVIDENCE AS SUCH IT WAS FORWARDED TO THE AO FOR HIS COMMENTS. THE F RESH EVIDENCES WERE OBJECTED TO BY THE AO. 4.1. CONSIDERING THE ARGUMENTS AND THE REMAND REPOR T THE CIT(A) DECIDED THE ISSUE IN THE FOLLOWING MANNER:- 3.5 THE FACTS OF THE CASES HAVE BEEN PERUSED. WH ILE THE CONTENTION THAT SHRI RAVINDRA HAD ENTERED INTO AGREEMENT WITH THE ASSESSEE AND PAYMENTS HAD BEEN MADE BY SHRI RAVINDRA TO NOIDA AU THORITY CAN BE ACCEPTED, IT STILL LEAVES THE ISSUE OF THE CAPACITY OF SHRI RAVINDRA TO MOBILIZE, SUCH FUNDS QUESTIONABLE. IN THE BANK ACC OUNT FROM WHICH THE PAYMENTS HAVE BEEN MADE. IT IS OBSERVED THAT THERE ARE SUBSTANTIAL CASH DEPOSITS. IT IS ALSO NOTED THAT A SPECIFIC RE QUEST WAS MADE DURING THE APPEALPROCEEDINGS TO FURNISH THE BANK STATEMENT S OF THE PART AT LEST 3 MONTHS PRIOR TO THE PAYMENTS MADE TO NOIDA TO EXA MINE THE SOURCE OF FUNDS FOR MAKING SUCH AYMENTS. THIS HAS NOT BEEN P RODUCED TO EVIDENCE THE EXECUTION OF A SALE DEED IN FAVOUR OF SHRI RAVINDRA, IN THE SUBSEQUENT YEARS. IF THAT PARTY HAD INDEED MADE PA YMENT OF OVER 80% OF THE SALE CONSIDERATION, HE WILL NOT FOREGO THE R IGHT TO HAVE THE PROPERTY LEGALLY TRANSFERRED TO HIM. THUS THE GENU INENESS OF THE TRANSACTION IS NOT PROVED. THEREFORE, THE ADDITION MADE BY THE A.O IS SUSTAINED. THE RESPECT OF THE LOAN FROM SH. AKASH SHARMA ONLY AN AFFIDAVIT OF THE PARTY HAS BEEN FILED AND THIS AFFI DAVIT ALSO DOES NOT SPECIFY THE PURPOSE FOR WHICH THE LOAN HAD BEEN ADV ANCED. THE BANK ACCOUNT FROM WHICH THE LOAN HAD BEEN ADVANCED HAS ALSO NOT BEEN FURNISHED. THEREFORE, THE CAPACITY OF THE PARTY AD VANCING THE LOAN HAS NOT BEEN PROVED. THEREFORE, THE ADDITION MADE OF R S.30,450/- IS ALSO SUSTAINED. 5. AFTER HEARING THE LD. AR AND THE SR. DR, WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, IT WO ULD BE APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE AO GIVING THE ASSESSE E LIBERTY TO FILE FRESH EVIDENCES IN SUPPORT OF ITS CLAIM WHICH EVIDENCES THE AO SHAL L CONSIDER BEFORE PASSING THE ORDER. IT IS SEEN THAT IN THE FACTS OF THE PRESENT CASE THAT THE ASSESSMENT WAS MADE U/S 144 AND THE NECESSARY EVIDENCE HAS NOT BEEN PLA CED ON RECORD. THE NECESSARY ITA NO. 3330/DEL/13 5 EVIDENCES OF SHRI. RAVINDRA TYAGIS CAPACITY AT THE RELEVANT POINT OF TIME AND/OR FINALLY THE TRANSFER OF THE PLOT IN HIS FAVOUR BY T HE GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY ETC CAN BE PLACED ON RECORD O R WHATEVER EVIDENCE THE ASSESSSEE HAS IN ITS POSSESSION TO PROVE ITS CLAIM SHALL BE ALLOWED TO BE FILED. ACCORDINGLY THE ISSUE IS RESTORED BACK TO THE AO WI TH THE ABOVE DIRECTION TO ENTERTAIN FRESH EVIDENCE AND PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW ON THE ISSUES INVOLVED AFTER GIVING THE ASSESSEE A REASON ABLE OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES AS PER THE PRONOUNCEMENT MADE IN THE OPEN COURT THE TI ME OF HEARING. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON DECEMB ER 6 TH 2013. SD/- SD/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 06/12/2013 *AMIT KUMAR/R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT RE GISTRAR ITAT NEW DELHI