RASHID AHMED ABDUL S. ANSARI, MUMBAI V. ITO 18(3)(3), MUMBAI

ITA 3616/MUM/2012

• Counselvise Citation: 361619914 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 21-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA VIJAY
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Unexplained investment; Principle of natural justice; Source of fund
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER. ITA. NO. 3616/MUM/2012 (ASSESSMENT YEAR:2006-07) SHRI RASHID AHMED ABDUL S. ANSARI A-300/217, UJALA CHAWL COMMITTEE, INDIRA KHURESHI ROAD, DHARAVI, MUMBAI - 400017 APPELLANT VS. INCOME TAX OFFICER 18(3)(3), MUMBAI RESPONDENT PAN: AAEPA2465R /BY APPELLANT : SHRI SANJAY R. PARIKH, A.R. /BY RESPONDENT :SHRI CHANDRA VIJAY, D.R. /DATE OF HEARING : 21.09.2015 /DATE OF PRONOUNCEMENT : 23.09.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-29, MUMBAI, DA TED 21.02.2012 FOR A.Y. 2006-07 ON FOLLOWING GROUNDS: ITA NO.3616/MUM/12 A.Y. 06-07 [SHRI RASHID AHMED AB DUL S. ANSARI VS. ITO] PAGE 2 A) PRINCIPLES OF NATURAL JUSTICE VIOLATED 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) 29, MUMBAI [CIT(A)] ERRED ON FACTS AND IN LAW IN NO T GIVING A REASONABLE AND SUFFICIENT OPPORTUNITY OF B EING HEARD BEFORE PASSING THE ORDER CONFIRMING THE ORDER OF THE INCOME TAX OFFICER 18(3)(3), MUMBAI (AO). 2. THE LEARNED CIT(A) ERRED IN STATING THAT NO EVID ENCE EXPLAINING THE SOURCE OR CONFIRMATION WERE FILED WI TH HIM. B) ADDITION U/S.69 RS.32,11,000/- 3. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER OF THE AO MAKING AN ADDITION OF RS.32,11,000/- AS UNEXPLAINED INVESTMENT UNDER SECTION 69 WITHOUT APPRECIATING THAT THE APPELLANT HAD FILED ALL THE DETAILS IN CONNECTION THERETO WITH TH E AO DURING REMAND PROCEEDINGS, WHICH WAS NOT CONSIDERED BY THE AO. 4. THE APPELLANT PRAYS THAT YOUR HONOURS HOLD THAT THE ADDITION UNDER SECTION 69 AMOUNTING TO RS.32,11,000/- IN UNCALLED FOR AND HENCE, THE SAME MAY BE DELETED. 2. ASSESSING OFFICER MADE ADDITION OF RS.42,56,900/ -. THIS COMPRISES OF CASH DEPOSIT OF RS.10,45,900/- U/S.68 AND UNEXPLAINED INVESTMENT OF RS.32,11,000/- U/S.69. A SSESSING OFFICER PASSED ORDER U/S.144 AS ASSESSEE COULD NOT EXPLAIN THE SOURCE OF FUNDS. THE ENTIRE DEPOSIT/INVESTMENT INF ORMATION HAVE BEEN OBTAINED BY ASSESSING OFFICER FROM AIR. THE ONLY ISSUE OF INVESTMENT OF RS.32,11,000/- IS BEFORE US. OUT OF THIS, THERE IS INVESTMENT OF RS.15 LACS IN STANDARD CHART ERED MUTUAL FUND ON 09.08.2005 AND REST OF INVESTMENT AR E IN UTI ITA NO.3616/MUM/12 A.Y. 06-07 [SHRI RASHID AHMED AB DUL S. ANSARI VS. ITO] PAGE 3 MUTUAL FUNDS ON VARIOUS DATES. IN APPELLATE PROCEE DINGS, DETAILS WERE FILED BEFORE CIT(A), IN TURN, HE CALLE D REMAND REPORT, WHEREIN ASSESSING OFFICER HAS CLAIMED TO EX AMINE THIS ISSUE. HE STATED THAT ASSESSEE NEVER APPEARED TO E XPLAIN THIS ISSUE DURING REMAND PROCEEDINGS. APART FROM THIS, A SSESSING OFFICER HAS STATED THAT INVESTMENT NEVER APPEARED I N THE BALANCE SHEET OF ASSESSEE. THEREFORE, THEY WERE FO UND UNEXPLAINED. ASSESSEE CLAIMED TO HAVE MADE DETAILE D SUBMISSION IN THIS REGARD. HE HAS STATED THAT FUND S FOR INVESTMENTS ARE TRANSFERRED FROM OTHER SAVINGS BANK ACCOUNTS AND CURRENT ACCOUNT OF ASSESSEES PROPRIETARY CONCE RN, M/S. NISHAT ENTERPRISES. THEY ARE ALL FROM BANK TRANSFE RS AND COULD NOT BE HELD AS UNEXPLAINED. ASSESSING OFFICER STAT ED THAT ASSESSEE DID NOT EVEN EXPLAIN THE ISSUE IN REMAND P ROCEEDING, THEREFORE, ADDITION SHOULD BE CONFIRMED. 3. CIT(A) CONFIRMED THE ORDER BY OBSERVING AS UNDER : (I) INVESTMENTS WERE NOT REFLECTED IN BALANCE SHEET OF ASSESSEE. (II) ASSESSEE DID NOT HAVE ADEQUATE INCOME EITHER D URING YEAR OR DURING EARLIER YEARS TO EXPLAIN SUCH HUGE INVEST MENT. THE DECLARED INCOME OF ASSESSEE FOR THE YEAR IS ONL Y RS.2,82,050/-. (III) THE TENTATIVE SOURCES HAVE BEEN SAID TO BE CA SH FROM PROPRIETARY CONCERN AND/OR LOAN FROM PARTIES. NO EVIDENCE REGARDING SUCH SOURCES OR EVEN CONFIRMATIO NS ITA NO.3616/MUM/12 A.Y. 06-07 [SHRI RASHID AHMED AB DUL S. ANSARI VS. ITO] PAGE 4 HAVE BEEN FILED. THEREFORE, SOURCES OF ACQUISITIO N REMAIN UNEXPLAINED. APART FROM THIS, LD. CIT(A) OBSERVED THAT ASSESSEE DID NOT EXPLAIN THIS ISSUE IN REMAND PROCEEDINGS BEFORE CON CERNED ASSESSING OFFICER AS WELL. 4. BEFORE US, LEARNED AUTHORIZED REPRESENTATIVE SUB MITTED THAT HE HAS APPEARED BEFORE CONCERNED ASSESSING OFF ICER IN ORIGINAL PROCEEDING AS WELL AS REMAND PROCEEDINGS. ASSESSEE FILED DETAILS BEFORE THE CONCERNED ASSESSING OFFICE R IN REMAND PROCEEDINGS. IN THE FIRST APPELLATE PROCEEDINGS, L EARNED AUTHORIZED REPRESENTATIVE HAS FILED DETAILED PAPER BOOK WHICH CONTAINS; I. COPY OF LETTER DATED 12 TH AUGUST, 2010 FILED WITH THE COMMISSIONER OF INCOME TAX (APPEALS) II. COPY OF PAPER BOOK FILED WITH THE COMMISSIONER OF INCOME TAX (APPEALS) ALONG WITH LETTER DATED 12 TH AUGUST, 2010 III. COPY OF SUBMISSION VIDE LETTER DATED 4 TH MARCH, 2011 FILED WITH THE COMMISSIONER OF INCOME TAX (APPEALS) IV. COPY OF PAPER BOOK FILED WITH THE COMMISSIONER OF INCOME TAX (APPEALS) ALONG WITH LETTER DATED 4 TH MARCH, 2011 V. COPY OF SUBMISSIONS FILED WITH THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE LETTER DATED 17 TH FEBRUARY, 2012 ALONG WITH ENCLOSURES. ITA NO.3616/MUM/12 A.Y. 06-07 [SHRI RASHID AHMED AB DUL S. ANSARI VS. ITO] PAGE 5 ASSESSEE HAS CERTIFIED THAT ALL ABOVE DETAILS WERE FILED BEFORE AUTHORITIES BELOW. IN THIS BACKGROUND, LEARNED AUT HORIZED REPRESENTATIVE SUBMITTED THAT HE HAS SUBMITTED ALL DETAILS BEFORE CONCERNED ASSESSING OFFICER IN ORIGINAL PROC EEDINGS AS WELL AS REMAND PROCEEDINGS. ASSESSING OFFICER WAS N OT JUSTIFIED IN OBSERVING THAT NOTHING HAS BEEN FILED BEFORE HIM . LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT DISPUTED THE FA CTS OF FILING OF DETAILS AS FILED IN THE PAPER BOOK WHICH HAS BEEN DULY CERTIFIED BUT HE SUPPORTED THE ORDERS OF AUTHORITIE S BELOW. 5. UNDER THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT ASSESSEE HAS NOT BEEN PROVIDED REASONABLE OPPO RTUNITY OF BEING HEARD BEFORE PASSING ORDER BY FIRST APPELLATE AUTHORITY. FURTHER, EVEN IN REMAND PROCEEDINGS, DETAILS HAVE B EEN FILED BEFORE CONCERNED ASSESSING OFFICER WHICH HAS NOT BE EN CONSIDERED BY HIM. EVEN IF, ASSESSEE HAS NOT APPEA RED ON DATES OF HEARING, IT DOES NOT MEAN THAT ASSESSEE HA D NOT EXPLAINED HIS CASE. ASSESSING OFFICER HAD OPTION T O RESPOND TO DETAILS FILED BEFORE HIM IN REMAND PROCEEDING. THI S AMOUNTS TO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE WHICH CAN NOT BE ENCOURAGED. AT THE SAME TIME, WE DO NOT ENCOURAGE ANY APATHY OF ASSESSEE TOWARDS LOWER AUTHORITIES IN ANY MANNER. 6. IN SUM AND SUBSTANCE, WE ARE OF THE VIEW THAT OPPORTUNITY OF HEARING IS A BASIC ESSENCE OF PRINCI PLE OF NATURAL JUSTICE WHICH IS MISSING IN THIS CASE. SO, IN THE INTEREST OF JUSTICE, WE RESTORE THE MATTER TO ASSESSING OFFICER WITH ITA NO.3616/MUM/12 A.Y. 06-07 [SHRI RASHID AHMED AB DUL S. ANSARI VS. ITO] PAGE 6 DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AF TER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE W E ARE RESTORING THE MATTER ON PRELIMINARY ISSUE, WE ARE R EFRAINING TO COMMENT ON MERIT OF THE ISSUE AT HAND. 7. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF SEPTEMBER, 2015. SD/- SD/- ( ASHWANI TANEJA ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 23/09/2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE !# / ASSESSEE $ %&%'( ) / CONCERNED CIT * )+ / CIT (A) ,-./00'(1 '( 1 2 %& / DR, ITAT, MUMBAI 3/4567 / GUARD FILE. BY ORDER / #8 1 9: ;% 1 '( 12 %&<