RHEEMA HASSAN ALI KHAN, PUNE V. DCIT CEN CIR 2, MUMBAI

ITA 3571/MUM/2009

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3496 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 17-02-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 01-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KADAMBARI DAVE
• Section: 147; 148

Judgement Text

ITA NOS. 3571 /M/ 20 09 (A.Y. 2000 - 01) RHEEMA HASSAN ALI KHAN VS. DY. CIT 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . , , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM ./ I.T.A. NO. 3571 /M UM / 20 09 ( / ASSESSMENT YEAR: 2000 - 01 ) RHEEMA HASSAN ALI KHAN VALENTINE SOCIETY, 1 TULIP, NORTH MAIN ROAD, KOREGAON PARK, PUNE - 411 0 01 / VS. DY. CIT, CENTRAL CIRCLE - 2, MUMBAI ./ ./ PAN/GIR NO. AOMPK 815 6 M ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI GIRISH DAVE & MS. KADAMBARI DAVE / DATE OF HEARING : 1 7 .0 2 .201 6 / DATE OF PRONOUNCEMENT : 29 .02.2016 / O R D E R PER SANJAY ARORA, A. M.: VIDE THIS APPEAL THE ASSESSEE AGITATES THE ORDER BY THE COM MISSIONER OF INCOME TAX (APPEAL ) CENTRAL - I , MUMBAI (CIT(A) FOR SHORT) DATED 26.11.2008 , DISMISSING THE ASSESSEES AP PEAL CONTESTING ITS ASSESSMENT U/S.143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2000 - 01 DATED 19/3/2008 . 2. NONE APPEARED FOR AND ON BEHALF OF ASSESSEE WHEN HER APPEAL WAS CALLED OUT FOR HEARING, NOR IS THERE ANY ADJOURNMENT MOTION. THIS, DESPITE SERVICE OF NOTICE OF ITA NOS. 3571 /M/ 20 09 (A.Y. 2000 - 01) RHEEMA HASSAN ALI KHAN VS. DY. CIT 2 HEARING, A COMBINED ONE FOR APPEALS FOR AYS. 2001 - 01 TO 2007 - 08, IN - AS - MUCH AS THE SAME, ISSUED ON 10/4/2015, PER RPAD (REGISTERED POST, ACKNOWLEDGMENT DUE), STANDS NOT RETURNED. IN FACT, EARLIER TOO, SIMILAR NOTICE, SENT BY REGISTERED POST ON 13 - 04 - 2015 (REGISTRATION NO. 2362/PO, CENTRAL, MUMBAI), SENT SIMILARLY TO THE ASSESSEES PUNE ADDRESS, HAD RETURNED UN - SERVED, WITH A POSTAL REMARK NOT CLAIMED, ON 23 - 04 - 2015. A PHOTO COPY OF A GEN ERAL POWER OF ATTORNEY DATED 02 - 02 - 2010 BY THE ASSESSEE IN FAVOUR OF SHRI SUNIL VITHAL SHINDEY, CA (M. NO. 39639) WAS OBSERVED TO BE ON RECORD. THE SAME DOES NOT MENTION ANY PARTICULAR YEAR. A VAKALAT NAMA FAVOURING DR. P. DANIEL DATED 31 - 05 - 2010 (FOR AY . 2000 - 01), STANDS SUBSEQUENTLY WITHDRAWN VIDE HIS LETTER DATED 21 - 03 - 2011; THE TRIBUNAL ISSUING A FRESH NOTICE OF HEARING (THROUGH RPAD) FOR 14 - 06 - 2011. ON 14 - 06 - 2011, SHRI SHINDEY, VIDE HIS LETTER OF EVEN DATE, INFORMED THAT BOTH THE ASSESSEE AND HER HUS BAND HAD WITHDRAWN THEIR VAKALAT NAMA ON 21 - 03 - 2011. FURTHER, AS THE ASSESSEE WAS NOT TRACEABLE, WITH HER HUSBAND BEING ALSO IN JUDICIAL CUSTODY, THE HEARING WAS REQUESTED FOR BEING ADJOURNED FOR LONG. THERE WAS NO REPRESENTATION IN THE MATTER SUBSEQUENTL Y, WITH NOTICES OF HEARING, INTER ALIA , DATED 20 - 07 - 2011 AND 26 - 07 - 2013, FIXING THE DATE OF HEARING FOR 13 - 09 - 2011 AND 01 - 10 - 2013 RESPECTIVELY, BEING UN - RESPONDED. IN FACT, NO FRESH VAKALAT NAMA IN FAVOUR OF ANY COUNSEL STANDS SUBMITTED. A PAPER - BOOK HAD EARLIER BEEN FILED BY ONE, MOHAN P. MAKHIJA, ADVOCATE, VIDE HIS LETTER DATED 26 - 07 - 2010, EVEN AS THERE IS NO VAKALAT NAMA IN HIS FAVOUR ON RECORD. THE APPEAL IS TAGGED WITH APPEALS FOR OTHER YEARS AS WELL AS WITH THAT BY OTHER PERSONS SUBJECT TO THE SEARC H BY THE REVENUE AND ED ON 05/01/2007. THE HEARING IN THE MATTERS HAS ALREADY BEEN DELAYED FOR LONG; THE REVENUE ALSO SEEKING TIME FOR ENGAGING A SPECIAL COUNSEL IN VIEW OF THESE BEING HIGH DEMAND CASES. UNDER THE CIRCUMSTANCES, IT WAS ONLY CONSIDERED PROP ER THAT THE HEARING OF THE APPEAL BE PROCEEDED WITH EX - PARTE , AND DISPOSED OF AFTER HEARING THE PARTY BEFORE US AND CONSIDERING THE MATERIAL ON RECORD. 2. THE FIRST GROUND IMPUGNS THE ASSESSMENT IN - AS - MUCH AS THE LD. CIT(A) HAS CONFIRMED THE ASSESSMENT, A S FRAMED BY THE ASSESSING OFFICER (AO), WITHOUT ITA NOS. 3571 /M/ 20 09 (A.Y. 2000 - 01) RHEEMA HASSAN ALI KHAN VS. DY. CIT 3 GRANTING ADJOURNMENT TO THE ASSESSEES COUNSEL. SURELY, ADJOURNMENT CANNOT BE CLAIMED AS A MATTER OF RIGHT, THOUGH DISCRETION IN ITS RESPECT IS TO BE JUDICIALLY EXERCISED. TOWARD THIS, WE FIND THE LD. CIT(A) ALLOWED THE ASSESSEE, REPRESENTED BY HER AUTHORIZED REPRESENTATIVE (AR), ADJOURNMENT ON FIVE OCCASIONS, I.E., 03 - 07 - 2008, 05 - 08 - 2008, 04 - 09 - 2008, 06 - 10 - 2008 AND 04 - 11 - 2008. IN FACT, FOR THE LAST TWO DATES, DESPITE BEING CONVEYED (ON CONSIDERING THE APPLIC ATION MOVED FOR ADJOURNMENT), THAT NO FURTHER ADJOURNMENT SHALL BE GIVEN. REFERENCE IN THIS CONTEXT MAY BE MADE TO PARA 2.3 OF THE IMPUGNED ORDER. IN FACT, PRIOR THERETO, EVEN BEFORE THE AO, THE ASSESSEE, THOUGH REPRESENTED BY A COUNSEL, SHRI ARVIND I. PAT EL, CA DID NOT FURNISH THE RELEVANT MATERIAL, SEEKING ADJOURNMENT/S, ON WHICH NONE ATTENDED; THE ISSUE OF SUMMONS DATED 21 - 02 - 2008 (FOR 04 - 03 - 2008) ALSO BEING UN - COMPLIED WITH (REFER PARAS 6.1 AND 6.2 OF THE ASSESSMENT ORDER). THE ASSESSEES GROUND, UNDER THE CIRCUMSTANCES, ONLY NEEDS TO BE STATED TO BE REJECTED. WE DECIDE ACCORDINGLY. 3. GROUND NO. 2 IS IN RESPECT OF UN - EXPLAINED EXPENDITURE ON LIVING AND LIFESTYLE EXPENSES, ESTIMATED AT RS. 2.50 LAKHS, IN VIEW OF THE STATEMENT U/S. 132(4) DT. 05 - 01 - 2007 BY HER HUSBAND, HASSAN ALI KHAN (HAK), ADMITTING HIS ANNUAL INCOME, AND THAT OF HIS WIFE, TO BE TO THE TUNE OF RS. 30 LACS AND RS. 3 LACS RESPECTIVELY. THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME EARLIER, AND THE RETURN U/S. 148 FOR THE CURRENT YEAR, FILED ON 23 - 05 - 2007, IS HER FIRST RETURN, DECLARING INCOME AT RS. 58,150/ - . THE ASSESSEES MARRIAGE WITH HAK WAS SOLEMNI Z ED ON 24 - 12 - 2000. HOW, WE WONDER, THEN, HIS STATEMENT COULD BE RELATED TO A PERIOD WHEN THEY WERE NOT MARRIED, THE RELEVANT PREVIOUS YEAR BEING F.Y. 1999 - 2000. CONTINUING FURTHER, THE ASSESSEE FILED AN APPLICATION U/S. 245 - C OF THE ACT FOR AYS. 2000 - 01 TO 2007 - 08 ON 28 - 05 - 2007, I.E., IMMEDIATELY AFTER FILING THE RETURN OF INCOME FOR THE CURRENT YEAR. THE INCOME DECLARED THEREIN, DULY VERIFIED AND AFFIRMED BY THE ASSESSEE, COULD THOUGH FORM A VALID BASIS FOR THE ASSESSMENT OF INCOME. THE ADDITIONAL INCOME OFFERED, I.E., OVER AND ABOVE THAT RETURNED, IN THE APPLICATION TO THE HONBLE SETTLEMENT COMMISSION FOR THE CURRENT YEAR, IS NOT ITA NOS. 3571 /M/ 20 09 (A.Y. 2000 - 01) RHEEMA HASSAN ALI KHAN VS. DY. CIT 4 MEN TIONED IN THE ORDERS BY THE REVENUE AUTHORITIES. ADDITIONS QUA SUCH INCOME, MADE BY THE REVENUE IN THE CASE OF HAK, HER HUSBAND, HAVE BEEN CONFIRMED BY US VIDE A COMBINED ORDER (FOR AYS. 2001 - 02 TO 2007 - 08) DATED 29.02.2016 . WE, ACCORDINGLY, ONLY CONSI DER IT PROPER TO RESTRICT THE IMPUGNED ADDITION TO THE ADDITIONAL INCOME OFFERED TO THE SETTLEMENT COMMISSION FOR THE CURRENT YEAR, OR RS. 2.50 LAKHS, WHICHEVER IS LESS. THE ASSESSEE SHALL, HOWEVER, AS IN THE CASE OF HAK, BE ALLOWED DUE CREDIT FOR THE SAME WHILE WORKING THE AVAILABILITY OF CASH (FOR THE CURRENT AND/OR FUTURE YEARS), WHICH MAY BE RELEVANT QUA ADDITIONS BASED THEREON, AS TOWARD DEPOSIT OF CASH IN BANK, ETC. THE DATE OF CASH INFLOW/S AND OUTFLOW/S, THOUGH, WOULD NEED TO BE GIVEN REGARD TO. FUR THER, FOR INCOME (OR EXPENDITURE) TAKEN ON AN ANNUALI Z ED BASIS, IT WOULD ONLY BE APPROPRIATE TO CONSIDER THE INCOME (OR EXPENDITURE) TO ACCRUE UNIFORMLY, I.E., PROPORTIONATELY, DURING THE YEAR. WE DECIDE ACCORDINGLY. 4. GROUND NO. 3 IS IN RELATION TO AN ADDITION, SINCE CONFIRMED, TOWARD OPENING CAPITAL (RS. 5,57,751/ - ) AND CLOSING STOCK OF HORSES (RS. 46,000), I.E., ON THE BASIS OF THE BALANCE SHEET AS ON 31 - 03 - 2000, FURNISHED BY THE ASSESSEE ALONG WITH HER RETURN OF INCOME. 5. WE HAVE PERUSED THE BALANC E SHEET AS ON 31 - 03 - 2000, FORMING PART OF THE ASSESSEES PAPER - BOOK (APB). OUR FIRST OBSERVATION IN THE MATTER IS THAT THE INVENTORY OF HORSES, FORMS PART OF THE RACING A/C, BALANCE - SHEET OF WHICH ACTIVITY/BUSINESS, SEPARATELY PREPARED, IS INCLUD ED IN THE PERSONAL BALANCE SHEET, UNDER THE HEAD INVESTMENT (ON RACE HORSES). THAT IS, NO ADDITION TOWARDS CLOSING STOCK OF HORSES COULD BE MADE IN - AS - MUCH AS THE PERSONAL BALANCE SHEET SUBSUMES THAT OF HER BUSINESS. SECONDLY, IT IS INCORRECT TO SAY TH AT THE ADDITION HAS BEEN MADE FOR THE OPENING CAPITAL. THE ADDITION HAS IN FACT BEEN MADE FOR THE ENTIRE ACCUMULATED CAPITAL, INTRODUCED FOR THE FIRST TIME BY THE ASSESSEE, A NON - ASSESSEE WITH THE REVENUE, FILING HER FIRST RETURN OF INCOME FOR THE CURRENT YEAR ON 23 - 05 - 2007. REFERENCE FOR THIS MAY BE MADE TO PARA 7.1 OF THE ASSESSMENT ORDER, STATING THAT NO ITA NOS. 3571 /M/ 20 09 (A.Y. 2000 - 01) RHEEMA HASSAN ALI KHAN VS. DY. CIT 5 BOOKS OF ACCOUNT OR OTHER DETAILS WERE FURNISHED. THE ASSESSEE HAS OFFERED NO EXPLANATION IN RESPECT OF THE OPENING CAPITAL OR, FOR THAT MATTER, THAT I NTRODUCED DURING THE YEAR, AND WHICH POSITION CONTINUED BEFORE THE FIRST APPELLATE AUTHORITY AS WELL, LEADING TO HIS CONFIRMATION OF THE ASSESSMENT. THE ASSESSEES CASE BEFORE US, REMAINS, EQUALLY UN - SUBSTANTIATED. IN THIS REGARD, WE OBSERVE THAT ASSESSEE HAS PRODUCED A NOC (FOR THE ISSUE OF A DUPLICATE RC BOOK) DT. 15 - 02 - 2001 FROM MARUTI COUNTRY WIDE AUTO FINANCIAL SERVICES LTD. (APB PG.6), TO EXHIBIT THAT THE VEHICLE, BEING A MOTOR - CAR ESTEEM (REGISTRATION NO. MH 12 AF 1817), BOOKED IN ACCOUNTS AS MARUT I CAR, IS FINANCED BY A LOAN. THE SAID DOCUMENT, FIRSTLY, DOES NOT EXHIBIT THE SAME; THE NOC ONLY STATING THE ISSUERS NON - OBJECTION (TO THE RTO, PUNE) FOR THE ISSUE OF A FRESH REGISTRATION CERTIFICATE (RC) BOOK IN - AS - MUCH AS THE ORIGINAL HAD BEEN MIS - PLA CED. TWO, EVEN ASSUMING THE VEHICLE TO BE BANK FINANCED, THE ADDITION, IT NEEDS TO BE APPRECIATED, IS TOWARD UNEXPLAINED CAPITAL IN BOOKS, I.E., ONLY SEEKS TO BRING TO TAX THE OWN CAPITAL INVESTED IN CAR, AND NOT THE ENTIRE INVESTMENT IN CAR (ACQUIRED, AS IT APPEARS, AT A COST OF RS. 4.95 LAKHS). AGAIN, THE INCOME FROM BUSINESS HAS NOT BEEN DISTURBED, SO THAT THE PROFIT DISCLOSED THERE - FROM HAS BEEN ACCEPTED. AS SUCH, NO ADDITION IS MADE TOWARD PROFIT, IRRESPECTIVE OF ITS APPLICATION, WHICH MAY BE TOWARD CAR - THE DATE OF ACQUISITION OF WHICH IS NOT KNOWN, AS WELL. WE, ACCORDINGLY, CONFIRM THE ADDITION. 6. GROUND NOS. 4 TO 6 ARE GENERAL IN NATURE, WARRANTING NO ADJUDICATION. 7. BEFORE PARTING WITH THIS ORDER, IT MAY BE PERTINENT TO STATE THAT THIS AP PEAL, TAGGED ALONG WITH OTHER APPEALS, WAS POSTED FOR 17.2.2016 FOR THE PURPOSE OF SEEKING CLARIFICATIONS. A JUNIOR ADVOCATE, SHRI RAMANATH PRABHU, FOR HSA ADVOCATES, WHO ARE NOT ADVOCATES ON RECORD, APPEARED AND SOUGHT ADJOURNMENT. THERE IS ALSO NO VAKALA TNAMA IN HIS FAVOUR. THE QUESTION OF ADJOURNMENT UNDER THE CIRCUMSTANCES DOES NOT ARISE. WRITTEN SUBMISSIONS, ALLOWED TO BE FILED FOR THE YEARS (APPEALS) FOR WHICH THEY STAND AUTHORIZED, WERE FILED ON 22.2.2016, WHICH BEAR REFERENCE TO THIS APPEAL (NUMBER) AS WELL. THE SAME STAND THOUGH PERUSED, TO FIND NO REFERENCE TO THE MATTER/S IN ISSUE. ITA NOS. 3571 /M/ 20 09 (A.Y. 2000 - 01) RHEEMA HASSAN ALI KHAN VS. DY. CIT 6 8. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED ON THE AFORE - SAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 29 , 201 6 SD/ - SD/ - ( D. MANMOHAN ) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED : 29 .02.2016 SR. PS MURLI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI