DANISH MERCHANT, MUMBAI V. DCIT CEN CIR 25, MUMBAI

ITA 3614/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101008 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2015
• Court: TRIBUNAL
• Department Lawyers: NEELIMA V NADKARNI
• Assessee Lawyers: KIRIT S SANGHVI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 3614/M/2015 (AY:2009 - 20 10 ) I.T.A.NO.3616/M/2015 (AY:2011 - 2012 ) SHRI DANISH MERCHANT, 9, OPRIYA, DR. PETER DIAS ROAD, BANDRA (W), MUMBAI 400 050. / VS. DCIT, CENTRAL CIRCLE 25, MUMBAI. ./ PAN : AFYPM7292R ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI KIRIT S. SANGHVI / RESPONDENT BY : MS. NEELIMA V. NADKARNI, DR / DATE OF HEARING : 26.08 .2015 / DATE OF PRONOUNCEMENT : 11 .09 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2009 - 10 AND 2011 - 12. THESE APPEALS ARE FILED AGAINST THE SEPARATE ORDERS OF THE CIT - (OSD), MUMBAI, COMMONLY DATED 28.3.2015. SINCE, THE ISSUES RAISED IN BOTH THESE APPEALS ARE INTERCONNECTED, THE REFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED - OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. ITA NO.3614/M/2015 (AY 2009 - 2010) 2. THIS APPEAL FILED BY THE ASSESSEE ON 12.6.2015 AGAINST THE SAID ORDER OF THE CIT - (OSD), MUMBAI FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED ON FACTS AND IN LAW IN C ONFIRMING THE FOLLOWING ADDITIONS / DISALLOWANCES WITHOUT REALIZING THAT THE ASSESSMENT WAS MADE UNDER SECTION 153 2 PURSUANT TO A SEARCH OPERATION UNDER SECTION 132 ON A THIRD PARTY, AND THEREFORE, THE ADDITIONS / DISALLOWANCES SHOULD HAVE BEEN MADE ON THE BASIS OF MATERIAL FOUND IN THE COURSE OF SEARCH OPERATIONS. NATURE OF ADDITION / DISALLOWANCE AMOUNT REFERENCE INCOME FROM HOUSE PROPERTY 1,95,636/ - PARA 9 OF ASST. ORDER EXPENSES FROM INCOME 7,23,38/ - PARA 10 OF ASST. ORDER 2. WITHOUT PREJUDICE TO GROUND NO.1, THE LD CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 1,95,636/ - AS INCOME FROM HOUSE PROPERTY. 3. WITHOUT PREJUDICE TO GROUND NO.1, THE LD CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 7,23,378/ - WITHOUT APPRECIATING THAT THE EXPENSE ON INTEREST WAS INCURRED FOR THE PURPOSE OF EARNING INCOME FROM OTHER SOURCES. 3. IN THIS APPEAL, VIDE GROUND NO.1 ASSESSEE RAISED THE LEGAL GROUND MENTIONING THAT THIS IS A CASE OF NON - ABATED ASSESSMENT. IN THAT CA SE, THE ADDITIONS HAVE TO BE BASED ONLY ON THE SEIZED MATERIAL OR INCRIMINATING MATERIAL FOUND DURING THE SEARCH INVOLVING ASSESSEE. 4 . REFERRING TO THE LEGAL ISSUE RAISED IN GROUND NO.1, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT IT IS A CASE OF SUMMARY ASSESSMENT AND THE NOTICE FOR SCRUTINY ASSESSMENT IS LIABLE TO BE ISSUED BEFORE 30.9.2010 AND THE SAME WAS NOT ISSUED TILL DATE. IN THAT SENSE OF THE MATTER, THIS IS A CASE NON - ABATED ASSESSMENT. FOR THIS PROPOSITION, ASSESSEE RELIED ON V ARIOUS DECISION IN HIS FAVOUR. BRINGING OUR ATTENTION TO THE ASSESSMENT ORDER, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF INCOME FROM HOUSE PROPERTY AND ALSO THE ADDITION ON ACCOUNT OF INTEREST INCOME ARE NOT B ASED ON ANY INCRIMINATING MATERIAL. LD COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT SUCH ADDITIONS MADE WITHOUT ANY INCRIMINATING MATERIAL IS UNSUSTAINABLE IN LAW AND THEREFORE, THE ASSESSMENT MADE WITHOUT ANY INCRIMINATING MATERIAL IS REQUIRED TO BE Q UASHED. 5 . ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES, I FIND THERE IS NOT WHISPER ABOUT ANY INCRIMINATING MATERIAL BASING ON WHICH THE ABOVE ADDITIONS WERE MADE. I HAVE ALSO PERUSED THE LEGAL PROPOSITIONS ON THE I SSUE 3 OF ISSUING OF NOTICE U/S 153C OF THE ACT IN CASE OF NON - ABATED ASSESSMENT AND FIND MERIT IN THE ARGUMENT OF THE LD COUNSEL FOR THE ASSESSEE THAT ADDITIONS MADE WITHOUT ANY INCRIMINATING MATERIAL IS UNSUSTAINABLE IN LAW AND THEREFORE, THE ASSESSMENT MA DE WITHOUT ANY INCRIMINATING MATERIAL IS REQUIRED TO BE QUASHED. CONSIDERING THE SAME, THE LEGAL ISSUE RAISED BY THE ASSESSEE VIDE GROUND NO.1 IS REQUIRED TO ALLOWED IN HIS FAVOUR. ACCORDINGLY I ORDER AND ALLOWED THE GROUND NO.1 RAISED BY THE ASSESSEE. 6 . CONSIDERING MY DECISION ON THE LEGAL ISSUE RAISED IN GROUND NO.1, I FIND THE ADJUDICATION OF GROUND NOS.2 AND 3, WHICH RELATES TO THE MERITS OF THE ADDITION BECOMES ACADEMIC EXERCISE. ACCORDINGLY, GROUND NOS. 2 AND 3 ARE DISMISSED AS ACADEMIC. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.3616/M/2015 (AY 2011 - 2012) 8 . THIS APPEAL FILED BY THE ASSESSEE ON 12.6.2015 IS AGAINST THE ORDER OF THE CIT (A) - 51, MUMBAI FOR THE ASSESSMENT YEAR 2011 - 2012. IN THE SOLITARY GROUND RAISED BEFORE THE TRIBUNAL, ASSESSEE IS AGGRIEVED AGAINST THE ADDITION OF RS. 1,95,636/ - AS INCOME FROM OTHER SOURCES. 9 . REFERRING TO THE GROUND RAISED IN THIS APPEAL, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO THE STATEMENT RECORDED FROM THE ASSESSEE U/S 132(4) OF THE ACT AND SUBMITTED THAT THE SAME CONSTITUTES AN ADDITIONAL EVID ENCE. FURTHER, LD COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO THE LETTER DATED 25.8.2015 AND SUBMITTED THAT THE SAME CONSTITUTES ALSO CONSTITUTES ADDITIONAL EVIDENCES AND PRAYED FOR ADMISSION OF THE SAME. 10 . AFTER HEARING BOTH THE PARTIES AND ON PER USAL OF THE SAID STATEMENT AS WELL AS THE CITED LETTER DATED 25.8.2015, I FIND THE SAME CONSTITUTES ADDITIONAL EVIDENCES AND THEY ARE REQUIRED TO BE ADMITTED. CONSIDERING THE SAME, I ADMIT THE SAID ADDITIONAL EVIDENCES AND REMAND THIS ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF THE ISSUE AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 1 1 . IN THE RESULT, ASSESSEES APPEAL FOR THE AY 2009 - 10 IS PARTLY ALLOWED AND THE APPEAL FOR THE AY 2011 - 12 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 11 . 9 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI