Smt Raj Rani , Tiptur V. Income Tax Officer Ward-1 , Tiptur

ITA 343/BANG/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5499 (ITAT-BANGALORE)
• Duration Of Justice: 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALAKRISHNAN N
• Assessee Lawyers: AMAN S PIRGAL
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 343 / BANG/201 8 ASSESSMENT YEAR : 2014 - 15 SMT. RAJ RANI, MADANLAL RAJKUMAR& CO., RMC YARD, TIPTUR 572 201. PAN: ACCPR0180Q THE INCOME TAX OFFICER, WARD 1, TIPTUR. APPELLANT RESPONDENT APPELLANT BY : SHRI AMAN S. PIRGAL, CA RESPONDENT BY : SHRI BALAKRISHNAN .N, ADDL. CIT (DR) DATE OF HEARING : 01 .0 3 .2018 DATE OF PRONOUNCEMENT : 01 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT(A) 7, BANGALORE DATED 08.12.2017 FOR ASSESSMENT YEAR 2014 -15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-7, BENGALURU HAS ERRED BOTH IN LAW AND ON FACTS IN UPH OLDING ADDITION OF RS.12,00,000/-REPRESENTING LOANS RECEIVED BY THE AS SESSEE AND, HELD TO BE UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 1.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-7, BENGALURU HAS FAILED TO APPRECIATE THAT UNSECURED L OANS AGGREGATING TO RS.12,00,000/- HAD BEEN RECEIVED BY ACCOUNT PAYE E CHEQUES FROM AN IDENTIFIABLE PARTY WHO HAD DULY CONFIRMED IN THE IR STATEMENT THAT LOANS HAD BEEN ADVANCED TO THE APPELLANT AND AS SUC H, ADDITION SO SUSTAINED IS INVALID AND UNTENABLE. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-7, BENGALURU HAS FURTHER FAILED TO APPRECIATE THE SUBS TANCE OF THE EVIDENCE THAT THE ASSESSEE HAS PLACED ON RECORD TO SUBSTANTIATE THE GENUINITY OF THE TRANSACTION WHICH INCLUDE AMONGST OTHERS - CONFIRMATION LETTER, BANK STATEMENT, COPY OF INCOME TAX RETURN AND EXTRACT OF BOOKS OF ACCOUNT OF THE LOAN CREDITOR. ITA NO. 343/BANG/2018 PAGE 2 OF 4 1.3 WITHOUT PREJUDICE TO GROUND 1.2, THAT THE LEARN ED COMMISSIONER OF INCOME TAX(APPEAL)-7 FAILED TO APPRECIATE THAT T HE INABILITY OF THE ASSESSEE TO EXPLAIN SOURCE-OF-SOURCE CANNOT BE A BA SIS TO CONFIRM ADDITION U/S 68 OF THE ACT. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL)-7, BENGALURU HAS ERRONEOUSLY PLACED RELIANCE ON A DISP UTED STATEMENT OF THE LOAN CREDITOR IN CONFIRMING THE ADDITION MADE B Y THE AO WITHOUT GIVING THE ASSESSEE AN OPPORTUNITY TO VERIFY A COPY OF THE STATEMENT OF THE LOAN CREDITOR (WHO HAS RETRACTED THE DISPUTED S TATEMENT AND CONFIRMED THE EXTRACTION OF THE INITIAL STATEMENT I N AN ATMOSPHERE OF FEAR AND TENSION) NOR GIVING THE ASSESSEE AN OPPORT UNITY TO CROSS- EXAMINE THE MAKER OF THE STATEMENT IN THE INTEREST OF NATURAL JUSTICE DESPITE PRAYING FOR IT IN THE GROUNDS OF APPEAL. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-7 ERRED BY NOT ADJUDICATING ON THE INCORRECT LEVY OF INTERE STED UNDER 234B AND 234C OF THE INCOME TAX ACT, 1961 THEREBY DEPICTING THE HURRY OF CONFIRMING THE ADDITION MADE BY THE AO AND ABSENT-M INDEDNESS OF THE LEARNED COMMISSIONER OF TAX (APPEALS)-7, BENGALURU 4. THAT THE VARIOUS ADVERSE FINDINGS RECORDED BY TH E LEARNED COMMISSIONER OF ACRE TAX (APPEALS) ARE CONTRARY TO RECORD AND LAW AND THUS UNSUSTAINABLE. IT IS THEREFORE PRAYED THA T THE ABOVE ADDITION MAY PLEASE BE DELETED AS LEARNED MEMBERS OF THE TRI BUNAL MAY DEEM IT PROPER 5. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE A NY GROUND(S) EITHER BEFORE OR IN THE COURSE OF THE HEARING OF THE APPEA L 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS P ER GROUNDS FILED BEFORE CIT (A), THIS WAS THE CONTENTION RAISED BEFORE CIT (A) THAT THE AO HAS DECIDED THE ISSUE WITHOUT FURNISHING A COPY OF THE STATEMENT GIVEN BY SHRI SUNIL KUMAR GUPTA TO THE ASSESSEE. HE FURTHER POINTED OUT THAT THIS CON TENTION WAS ALSO RAISED BEFORE CIT(A) THAT THE AO HAS ERRED IN THE FACTS AN D CIRCUMSTANCES OF THE CASE BY NOT GIVING THE ASSESSEE ANY OPPORTUNITY TO CONFR ONT AND CROSS EXAMINE SHRI SUNIL KUMAR GUPTA. HE SUBMITTED THAT CIT (A) HAS N OT DECIDED THESE ASPECTS AND HE HAS NOT ENSURED THAT THE COPY OF THE STATEME NT GIVEN BY SHRI SUNIL KUMAR GUPTA BE PROVIDED TO THE ASSESSEE AND THE ASS ESSEE BE ALSO PROVIDED WITH THE OPPORTUNITY TO CONFRONT AND CROSS EXAMINE SHRI SUNIL KUMAR GUPTA. HE SUBMITTED THAT UNDER THESE FACTS, THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION AFTER PROVIDING THE COPY OF S TATEMENT OF SHRI SUNIL KUMAR GUPTA TO ASSESSEE AND ALSO AFTER PROVIDING AN OPPOR TUNITY TO THE ASSESSEE TO ITA NO. 343/BANG/2018 PAGE 3 OF 4 CROSS EXAMINE SHRI SUNIL KUMAR GUPTA. THE LD. DR O F REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AS PER THE COPY OF FORM NO. 35 SUBMITTED ALONG WITH THE APPEAL MEMO, THESE TWO GROUNDS WERE VERY MUCH RAISED BEFORE CIT (A) THAT AO HAS ERRED TO DECIDE T HE ISSUE WITHOUT FURNISHING A COPY OF STATEMENT GIVEN BY SHRI SUNIL KUMAR GUPTA T O THE ASSESSEE AND THE AO HAS ALSO ERRED IN DECIDING THE ISSUE WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO CONFRONT AND CROSS EXAMINE SHRI SUNIL KUMAR GUPT A. IN SPITE OF THIS, THIS ASPECT OF THE MATTER IS NOT DECIDED BY CIT (A) AND FROM THE ASSESSMENT ORDER ALSO, IT COMES OUT THAT THE DECISION OF AO IS BASED ON THE STATEMENT OF SHRI SUNIL KUMAR GUPTA AND THERE IS NO INDICATION IN THE ASSESSMENT ORDER THAT THE COPY OF STATEMENT OF SHRI SUNIL KUMAR GUPTA WAS PRO VIDED BY THE AO TO THE ASSESSEE AND AN OPPORTUNITY WAS PROVIDED BY AO TO A SSESSEE TO CROSS EXAMINE SHRI SUNIL KUMAR GUPTA. UNDER THESE FACTS, I FEEL IT PROPER TO SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF AO FOR FRESH DECISION AFTER PROVIDING THE COPY OF STATEMENT OF S HRI SUNIL KUMAR GUPTA TO THE ASSESSEE AND IF THE ASSESSEE ASK FOR AN OPPORTUNITY TO CROSS EXAMINE SHRI SUNIL KUMAR GUPTA THEN THE AO SHOULD ALSO PROVIDE O PPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SHRI SUNIL KUMAR GUPTA AN D THEN PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR AT THIS STAGE REGARDING MERIT OF THE CASE. HENCE I DO NOT MAKE A NY COMMENT ON THE MERIT OF THE CASE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 1 ST MARCH, 2018. /MS/ ITA NO. 343/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.