Income Tax Officer -2(2), Kanpur V. Shri Jai Narain Maurya, Kanpur

ITA 368/LKW/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3349 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-02-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 06-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Opportunity of being heard; Additional evidence
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI J SUDHAKAR REDDY , ACCOUNTANT MEMBER ITA NO. 368/LKW/2012 ASSESSMENT YEAR: 1997 - 98 INCOME TAX OFFICER 2(2) KANPUR V. JAI NARAIN M AURYA PROP. LAXMI AGENCIES 119 - 499, DARSHANPURWA KANPUR PAN: AARPM6171F (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. RANU BISWAS, D.R. RESPONDENT BY: SHRI. RAKESH GARG, ADVOCATE DATE OF HEARING: 15.03.13 DATE OF PRONOUNCEMENT: 07/06/2013 O R D E R PER S UNIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON VARIOUS GROUNDS, BUT THEY ALL RELATE TO DELETION OF ADDITION OF ` 13,63,003 MADE ON ACCOUNT OF INCOME FROM OTHER SOURCES WITHOUT APPRECIATING THE F ACT THAT THE ASSESSEE MADE THE PAYMENTS OF ` 13,63,003 TO M/S KANPUR TRADING COMPANY, KANPUR ON BEHALF OF M/S JAI PRAKASH & BROTHERS, MATHURA BY MEANS OF 23 PAY ORDERS PURCHASED BY DEPOSITING CASH IN BANK , WITHOUT ROUTING THROUGH THE BOOKS OF ACCOUNT OF THE ASSESSEE. 2 . THOUGH THE REVENUE HAS NOT RAISED A SPECIFIC GROUND WITH REGARD TO THE VIOLATION OF RULE 46A OF THE INCOME - TAX RULES (HEREINAFTER CALLED IN SHORT RULE') , BUT DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. D.R. : - 2 - : HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS TAKEN A STAND THAT PAYMENT S AGGREGATING TO ` 12,63,003 WERE MADE FROM THE FIRM OF HIS LATE FATHER M/S LAXMI NAR AIN AGENCIES AND ` 1 LAKH WAS PAID BY THE PROPRIETORSHIP CONCERN OF THE ASSESSEE, M/S LAXMI AGENCIES AND WITH REGARD TO THIS PAYMENT OF ` 1 LAKH NECESSARY ENTRIES WERE RECORDED IN THE BOOKS OF ACCOUNT. BUT BEFORE THE LD. CIT(A) THE ASSESSEE HAS TAKEN ALTOGE THER A DIFFERENT STAND THAT THE PAYMENTS WERE MADE BY HIS ELDER BROTHER, SHRI. CHANDRA NARAIN MAURYA THROUGH HIS BOGUS FIRM UNDER THE NAME AND STYLE LAXMI AGENCIES FLOATED BY HIM . BEFORE THE LD. CIT(A), SHRI. CHANDRA NARAIN MAURYA HAS ALSO ADMITTED THES E FACTS. ALL THESE NEW EVIDENCES WERE NEVER CONFRONTED TO THE ASSESSING OFFICER FOR HIS COMMENTS. 3 . THE LD. D.R. HAS ALSO INVITED OUR ATTENTION TO THE ORDER OF THE LD. CIT(A) IN WHICH HE HAS RECORDED THAT THE WRITTEN SUBMISSION RECEIVED BY HIM ON BEHALF O F THE ASSESSEE WAS SENT TO THE ASSESSING OFFICER FOR HIS COMMENTS VIDE LETTER DATED 20.4.2007 AND REMAND REPORT WAS NOT RECEIVED. THIS ORDER WAS PASSED BY THE LD. CIT(A) ON 23.3.2012. BEFORE PASSING THE ORDER, THE LD. CIT(A) DID NOT TAKE ANY PAIN TO AFFO RD OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER ON THE NEW STAND TAKEN BY THE ASSESSEE AND THE LD. CIT(A) , HAVING RELIED UPON THE CONTENTIONS OF THE ASSESSEE , DELETED THE ENTIRE ADDITION WITHOUT APPRECIATING THE FACT THAT BEFORE MAKING THE IMPUGNED ADDITION THE ASSESSING OFFICER H AS COLLECTED ENORMOUS EVIDENCES . THE LD. D.R. FURTHER CONTENDED THAT DURING THE COURSE OF HEARING, THE ASSESSEE HIMSELF HAS ADMITTED IN THE STATEMENT RECORDED BY THE ASSESSING OFFICER THAT THE AMOUNT OF ` 12,63,003 WAS PAID BY M/S LAXMI NARAIN AGENCIES WHICH WAS OWNED BY HIS FATHER, SHRI. LAXMI NARAIN MAURYA. BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE COULD NOT PLACE ANY EVIDENCE TO SUPPORT THESE CONTENTIONS AND THE ASSESSING OFFICER HAS MADE : - 3 - : THE ADDITION. THE LD. D.R. FURTHER CONTENDED THAT WHEN A NEW STAND IS TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A), THE LD. CIT(A) SHOULD HAVE AFFORDED PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER OR CALLED FOR REMAND REPORT. BUT HE HAS SIMPLY RECORDED IN THE ORDE R THAT THE ASSESSING OFFICER WAS REMINDED TELEPHONICALLY. THE LD. D.R. FURTHER CONTENDED THAT IN VIEW OF THESE FACTS , THE ADDITIONAL EVIDENCE S AND NEW STAND BY THE ASSESSEE ARE REQUIRED TO BE PROPERLY EXAMINED BY THE ASSESSING OFFICER. THER EFO RE, THE ORD ER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE. 4 . THE LD. COUNSEL FOR THE ASSESSEE , BESIDES PLACING RELIANCE UPON THE ORDER OF THE LD. CIT(A) , HAS SUBMITTED THAT THE ASSESSEE HAS PLACED ALL THE RELEVANT EVIDENCE S BEFORE THE LD. CIT(A) TO ESTABLISH THAT THE IM PUGNED PAYMENTS WERE MADE BY HIS ELDER BROTHER, SHRI. CHANDRA NARAIN MAURYA THROUGH BOGUS FIRM UNDER THE NAME AND STYLE LAXMI AGENCIES AND BY DOING SO HE HAS PLAYED A MISCHIEF WITH THE ASSESSEE. BEFORE THE LD. CIT(A) SHRI. CHANDRA NARAIN MAURYA HAS CAND IDLY ADMITTED THAT THE PAYMENTS WERE MADE BY HIM THROUGH HIS BOGUS FIRM, LAXMI AGENCIES. HAVING VERIFIED THESE FACTS, THE LD. CIT(A) DELETED THE ADDITION. 5 . HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT ON RECEIPT OF INTIMATION FROM THE INVESTIGATION WING OF THE INCOME - TAX DEPARTMENT THAT THE ASSESSEE WAS NOT ONLY MAKING BUSINESS TRANSACTIONS WITH THE FIRM, M/S JAI PRAKASH & BROTHERS, MATHURA IN RESPECT OF ITS OWN BUSINESS OF AGARBAT T I BUT ALSO MADE HUGE PAYMENT TO M/S KANPUR TRADING COMPANY, KANPUR ON BEHALF AND ON THE INSTRUCTION OF M/S JAI PRAKASH & BROTHERS, MATHURA. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR I.E. 1997 - 98 BY ISSUING NOTICE UNDER SECTION 147 OF THE ACT. ON VE RIFICATION IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE PROPRIETARY CONCERN OF THE ASSESSEE, M/S LAXMI : - 4 - : AGENCIES MADE HUGE PAYMENT S AGGREGATING TO ` 13,63,033 THROUGH PAY ORDERS ON DIFFERENT DATES DURING THE FINANCIAL YEAR 1996 - 97 RELEVANT TO THE ASSESSM ENT YEAR 1997 - 98 TO M/S KANPUR TRADING COMPANY, KANPUR ON BEHALF OF M/S JAI PRAKASH & BROTHERS, MATHURA. THE ASSESSING OFFICER HAS ALSO EXAMINED THE CORRESPONDENCE IN THE SHAPE OF LETTERS OF M/S LAXMI AGENCIES WRITTEN ON 19.4.1997 TO M/S JAI PRAKASH & BRO THERS, MATHURA AND REPLY OF M/S JAI PRAKASH & BROTHERS, MATHURA BY LETTER DATED 7.5.1997. THE ASSESSEE WAS ASKED TO EXPLAIN AND IN RESPONSE THERE TO THE ASSESSEE HAS TAKEN A STAND THAT THE PAYMENTS WERE MADE BY M/S LAXMI NARAIN AGENCIES, PROPRIETARY CONCER N OF HIS FATHER, SHRI. LAXMI NARAIN MAURYA , WHO EXPIRED ON 26.10.1998. THESE EXPLANATIONS WERE NOT ACCEPTED BY THE ASSESSING OFFICER AND HE MADE ADDITION OF THE ENTIRE SUM OF ` 13,63,003 IN THE HANDS OF THE ASSESSEE. 6 . BEFORE THE LD. CIT(A), THE ASSESSEE T OOK ALTOGETHER A NEW STAND THAT THESE PAYMENTS WERE MADE BY HIS ELDER BROTHER, SHRI. CHANDRA NARAIN MAURYA THROUGH HIS BOGUS FIRM UNDER THE NAME AND STYLE LAXMI AGENCIES. HE HAS FILED DETAILED WRITTEN SUBMISSIONS BEFORE THE LD. CIT(A) WHICH IS REPRODUCE D IN HIS ORDER AT PAGES 3 TO 17. IN THE ORDER THOUGH THE LD. CIT(A) HAS RECORDED THAT HE HAS FORWARDED THE WRITTEN SUBMISSIONS TO THE ASSESSING OFFICER VIDE LETTER DATED 20.4.2007, BUT THE REMAND REPORT WAS NOT RECEIVED TILL THE ORDER IS PASSED BY HIM ON 23.3.2012. IT IS ALSO RECORDED IN THE ORDER THAT WRITTEN SUBMISSION WAS FORWARDED BY THE PREDECESSOR OF THE LD. CIT(A) AND SUBSEQUENT REMINDERS WERE ALSO ISSUED TELEPHONICALLY. IT IS NOT CLEAR FROM THE ORDER OF THE LD. CIT(A) WHETHER HE HIMSELF TOOK ANY PAIN TO OBTAIN THE COMMENTS ON THE DETAILED WRITTEN SUBMISSIONS IN WHICH THE ASSESSEE HAS TAKEN ALTOGETHER A NEW STAND. HE SIMPLY RELIED UPON THE ASSESSEES CONTENTIONS THAT THE PAYMENTS WERE MADE BY HIS ELDER BROTHER, SHRI. CHANDRA NARAIN MAURYA THROUGH HIS BOGUS FIRM UNDER THE NAME AND STYLE LAXMI AGENCIES AND DELETED THE ADDITION : - 5 - : WITH THE DIRECTION TO EXAMINE THESE PAYMENTS IN THE HANDS OF SHRI. CHANDRA NARAIN MAURYA. WHILE DOING SO, THE LD. CIT(A) HAS NOT EXAMINED THE ORDER OF THE ASSESSING OFFICER WHO MADE ADDITION IN THE HANDS OF THE ASSESSEE HAVING RELIED UPON VARIOUS EVIDENCES COLLECTED BY HIM AND AFTER REJECTING THE STAND TAKEN BY THE ASSESSEE THAT THE PAYMENTS WERE MADE BY HIS FATHER. THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS NOT P ROPERLY EXAMINED THE ISSUE IN DISPUTE AND ALLOWED RELIEF TO THE ASSESSEE SIMPLY BY ACCEPTING HIS CONTENTIONS NARRATED IN THE WRITTEN SUBMISSIONS. THE LD. CIT(A) AT LEAST SHOULD HAVE AFFORDED AN OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER ON THE WR ITTEN SUBMISSIONS FILED BY THE ASSESSEE IN WHICH HE HAS TAKEN ALTOGETHER A NEW STAND. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS REPRODUCED THE STATEMENT OF THE ASSESSEE IN WHICH HE HAS ADMITTED THAT THE PAYMENTS WERE MADE BY HIS FATHER. UNDER TH ESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS NOT EXAMINED THE ISSUE PROPERLY IN THE LIGHT OF EVIDENCES COLLECTED BY THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REEXAMINE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE LIGHT OF THE WRITTEN SUBMISSIONS FILED BY HIM BEFORE THE LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE STANDS AL LOWED FOR STATISTICAL PURPOSE. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/06/2013 SD/. SD/. [ J SUDHAKAR REDDY ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/06 /2013 JJ: 0705 : - 6 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR