Munnalal Kadel (HUF), CHENNAI V. ITO, CHENNAI

ITA 3375/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4307 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2016
• Court: TRIBUNAL
• Department Lawyers: M MURAGA BOOPATHY
• Assessee Lawyers: K BALASUBR AMANIAN
• Keywords: Onus to prove
• Section: 143(3); 147; 148

Judgement Text

/ , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C/SMC, CHENNAI , ! ' BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ITA NO.3375/MDS/2016 # $ %&$ / ASSESSMENT YEAR : 2008-09 MUNNALAL KADEL (HUF), NO.311, PAREKH MARKET, 39, JSS ROAD, MUMBAI 400 004. [PAN: AAAHM 3432Q] VS. INCOME TAX OFFICER, NON CORPORATE WARD-5(3), CHENNAI. ( /APPELLANT ) ( / RESPONDENT ) '( ) * / APPELLANT BY : SHRI K.BALASUBRAMANIAN, ADVOCATE +,'( ) * / RESPONDENT BY : SHRI M.MURAGA BOOPATHY, ADDL. CIT - % ) . / DATE OF HEARING : 06.03.2017 /& ) . / DATE OF PRONOUNCEMENT : 05.06.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI (C IT(A) FOR SHORT) DATED 08.11.2016, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS ASSESSMENT U/S. 143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 10.02.2016 FOR THE ASSESSMENT YEAR (AY) 2008-09. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE IMPUGNED ORD ER IS AN EX PARTE ORDER, SO THAT THE ASSESSEE HAD NOT HAD AN OPPORTUNITY TO MAK E OUT THE CASE BEFORE THE LD. 2 ITA NO.3375/MDS/2016 (AY 2008-09) MUNNALAL KADEL (HUF) V. ITO FIRST APPELLATE AUTHORITY. HE, ACCORDINGLY, PRAYED FOR A REMAND BACK TO THE FIRST APPELLATE STAGE IN THE INTEREST OF JUSTICE. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) WOULD VEHEMENTLY OPPOSE THE SAME, STATING THAT THE ASSESSEE HAD BEEN ALLOWED SUFFICIENT OPPORTUNITY BY THE LD. CIT(A), D RAWING MY ATTENTION TO PARA 5 OF THE IMPUGNED ORDER RECORDING THE NUMBER OF TIMES (3) THE CASE WAS POSTED FOR HEARING, TO NONE OF WHICH THE ASSESSEE RESPONDED, S O THAT THE LD. CIT(A) WAS CONSTRAINED TO DISPOSE THE ASSESSEES APPEAL UPON T AKING INTO ACCOUNT THE MATERIAL AVAILABLE ON RECORD. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MAT ERIAL ON RECORD. THE ASSESSEE IS A DEALER IN DIAMONDS. IT FILED ITS RETURN FOR THE CURRENT YEAR ON 28.09.2008 DECLARING AN INCOME OF . 6.69 LACS, WHICH WAS PROCESSED U/S. 143(1). SUBSEQUENTLY, NOTICE U/S. 148 WAS ISSUED ON 25.03.2015 ON THE BASIS OF REASONS AS TO ESCAPEMENT OF INCOME BASED ON THE INC RIMINATING MATERIAL FOUND BY THE REVENUE DURING A SEARCH CARRIED OUT ON A SUR AT BASED GROUP OF CONCERNS (REFERRED TO AS GAUTAM JAIN & OTHERS) ON 03.10.20 13. THE MATERIAL FOUND INDICATED THE ASSESSEE TO BE A BENEFICIARY OF BOGUS TRANSACTIONS FOR PURCHASE OF DIAMONDS FROM A GROUP CONCERN, M/S. KRISHNA DIAM. I N ASSESSMENT PROCEEDINGS, WHILE THE ASSESSEE RELIED ON DOCUMENTA RY EVIDENCES, VIZ. PURCHASE BILLS; SALES-TAX RETURN, ETC. TO SUBSTANTIATE ITS C LAIM/S, THE REVENUE REJECTED THE SAME ON THE BASIS OF THE DEPOSITIONS BY THE DIRECTO RS OF THE DELINQUENT COMPANIES ADMITTING OF THEM TO BE MERELY PAPER COMP ANIES, AND THE TRANSACTIONS, CONCOMITANTLY, AS NOT GENUINE. THE IM PUGNED ORDER, DESPITE NON- REPRESENTATION BY THE ASSESSEE, MEETS THE ASSESSEE S CASE BEFORE THE ASSESSING OFFICER (AO), WHICH PRINCIPALLY REVOLVES AROUND BRE ACH OF THE PRINCIPLES OF NATIONAL JUSTICE. IN MY CLEAR VIEW, NO SUCH ALLEGATION CAN HOLD IN-A S-MUCH AS THE ASSESSEE HAS BEEN ALLOWED ADEQUATE OPPORTUNITY TO STATE ITS CASE BEFORE THE AO. HOWEVER, THE ASSESSMENT ORDER DOES NOT ADDRESS AS T O HOW THE PURCHASE OF 3 ITA NO.3375/MDS/2016 (AY 2008-09) MUNNALAL KADEL (HUF) V. ITO DIAMONDS CAN BE REGARDED AS NOT GENUINE WHEN THEY H AVE BEEN ACTUALLY SOLD? THE ENTIRE MODUS OPERANDI ADOPTED SHALL BE REQUIRED TO BE SET OUT, BRINGING FORTH THE NECESSARY IMPLICATIONS. THE QUESTION THAT COULD THOUGH ARISE IS WITH REGARD TO THE COMPONENT OF PROFIT IN-AS-MUCH AS THE PURCHASES DULY RECORDED IN BOOKS, ARE FROM A CLANDESTINE OR UNPROVED SOURCE AND, WHERE IMPORTED, AS STATED BY THE DIRECTORS IN THEIR DEPOSITIONS, WOULD INVOLVE NON-PAYMENT OF CUSTOMS DUTY. THE ASSESSEE, AFTER ALL, WOULD ONLY B E DRIVEN BY PROFIT MOTIVE TO RESORT TO SUCH TRANSACTIONS. THE ASSESSEE, WHOSE BE HAVIOR HAS NO DOUBT BEEN IRRESPONSIBLE TO SAY THE LEAST, DESERVES ONE MORE O PPORTUNITY BEFORE THE REVENUE AUTHORITIES. AS SUCH, TO MEET THE ENDS OF THE JUSTI CE, SUBJECT TO PAYMENT OF COST OF . 10,000/- BY THE ASSESSEE, THE MATTER IS RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION AFRESH AFTER ALLOWING A REA SONABLE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE BEFORE HIM. FURTHER, I N VIEW OF THE IMPOSITION OF COST, THE SAME WAS PUT ACROSS TO THE LD. AR, WHO AG REED THERETO, FURTHER STATING THAT THE PAYMENT WOULD BE MADE BY MARCH 31, 2017. N EEDLESS TO ADD, THE BURDEN TO PROVE ITS CLAIMS WOULD BE ON THE ASSESSEE AND, FURTHER, THIS IS TO BE CONSTRUED AS A LAST OPPORTUNITY THERETO. IN THE EVE NT OF NON OR IMPROPER REPRESENTATION BEFORE THE FIRST APPELLATE AUTHORITY , THE SAID AUTHORITY WOULD BE ENTITLED TO DRAW SUCH INFERENCE IN THE MATTER AS AD MISSIBLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND, BESIDES, MAY REQUIRE FURTHER EXAMINATION BY THE ASSESSING AUTHORITY. I DECIDE ACCORDINGLY. 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES ON THE AFORESAID TERMS. ORDER PRONOUNCED ON JUNE 05, 2017 AT CHENNAI . SD/- ( ) (SANJAY ARORA) ! /ACCOUNTANT MEMBER 4 ITA NO.3375/MDS/2016 (AY 2008-09) MUNNALAL KADEL (HUF) V. ITO /CHENNAI, 0 /DATED, JUNE 05, 2017. EDN 1 ) +#.23 43&. /COPY TO: 1. '( /APPELLANT 2. +,'( /RESPONDENT 3. - 5. ( )/CIT(A) 4. - 5. /CIT 5. 3%67 +#.# /DR 6. 78$ 9 /GF