ITO 20(1)(2), MUMBAI V. BHIMSHI R KARIA, MUMBAI

ITA 3879/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0701 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 28-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2012
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEERLA SR
• Assessee Lawyers: SANJEEV M SHAH
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 68

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO.3879/M/2012 ( AY: 2007 - 2008 ) ITO 20(1)(2), R.NO.606, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI - 12 / VS. SHRI BHIMSHI R. KARIA, 5/10, CHANDAN NIWAS, TELLY GALLY X ROAD, OFF. M.V. ROAD, ANDHERI (E), MUMBAI - 69. ./ PAN : ALLPK4721C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PAVAN KUMAR BEERLA, SR. A.R / RESPONDENT BY : SHRI SANJEEV M. SHAH / DATE OF HEARING : 28.5 .2015 / DATE OF PRONOUNCEMENT :28 .5.2015 / O R D E R PER G.S. PANNU, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) - 31, MUMBAI DATED 7.3.2012 FOR THE ASSESSMENT YEAR 2007 - 2008 IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT), DATED 29.12.2009. 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING TWO MAIN GROUNDS OF APPEAL: - 1. THE LD CIT (A) HAS ERRED ON FACTS AND CIRCUMSTANCES AND IN LAW IN DELETING THE ADDITION OF RS. 16,77,040/ - BEING UNEXPLAINED UNSECURED LOANS AND INTEREST THEREON. 2. THE LD CIT (A) ERRED ON THE FACTS AND CIRCUMSTANCES AND IN LAW IN ACCEPTING THE LOANS AS FULLY EXPLAINED ONLY ON THE BASIS OF CONFIRMATION LETTERS, PAN NO AND ADDRESS OF THE CONCERNED PARTIES WITHOUT VER IFYING THE CREDITWORTHINESS OF THE LENDER, GENUINENESS OF THE TRANSACTION OF THE CONCERNED PARTIES. 3. THE LD CIT (A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES AND IN LAW IN ADMITTING FRESH EVIDENCE WITHOUT GIVING AN OPPORTUNITY TO THE AO TO VERIFY THESE EV IDENCES, THEREBY CONTRAVENING THE PROVISIONS OF RULE 46A OF THE IT RULES. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF AO BE RESTORED. 2 3. BRIEFLY STATED, RELEVANT FACTS OF THE CASE ARE THAT T HE ASSESS EE IS AN INDIVIDUAL AND E NGAGED IN THE BUSINESS OF XEROX. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,99,964/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 18,77,000/ - . IN THE ASSESSMENT, ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SHOWN UNSECURED LOAN S, ON BEING ASKED, ASSESSEE COULD NOT SUBSTANTIATE THE AFORESAID UNSECURED LOANS AND ACCORDINGLY, ASSESSING OFFICER PROCEEDED TO MADE ADDITION / DISALLOWAN CE ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN S OF RS. 16,77,040/ - U/S 68 OF THE ACT. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE CIT (A), IT WAS SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS , ASSESSEE PRODUCED ALL THE REQUISITE DETAILS, EXCEPT THE ADDRESSES AND PANS, TO SUBSTANTIATE THE LOANS AVAILED FROM THE CONCERNED SIX PARTIES. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) CAME TO THE CONCLUSION THAT THE A SSESSING O FFICER W A S NOT JUSTIFIED IN CONSIDERING THE AFORESAID AMOUNTS AS UNEXPLAINED CASH CREDITS OF THE ASSESSEE U/S 68 OF THE ACT, AND ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION / DISALLOWANCE, AND ALLOWED THE APPEAL. AGGRIEVED WITH THE AFORESAID DECISION OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE US BY RAISING THE AFOREMENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, LD DR APPEARING FOR THE REVENUE CONTENDED THAT THE CIT (A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER MEREL Y RELYING ON THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM WITHOUT CALLING FOR ANY REMAND REPORT FROM THE ASSESS ING OFFICER WITH REGARD TO THE EVIDEN CE S FURNISHED BEFORE THE CIT (A). LD DR FURTHER CONTENDED THAT T HE AFORESAID ACTION OF THE CIT (A) IN AC CEPTING THE FRESH EVIDENCES WITHOUT GIVING OPPORTUNITY TO ASSESSING OFFICER TO VERIFY THE SAME IS IN VIOLATION OF THE PROVI SIONS OF RULE 46A OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) . AT THE TIME OF HEARING, IT IS THE PLEA OF THE LD DR THAT THE ISSUE MAY BE REMANDED TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE EVIDENCES FURNISHED THE BEFORE THE CIT (A). 6. THE LD REPRESENTATIVE FOR THE ASSESSEE, DID NOT CONTROVERT THE SUBMISSIONS OF THE LD DR THAT THERE WAS A VIOLATION OF RULE 46A OF THE RULES. 3 7. ON HEARING BOTH THE PARTIES, WE FIND MER IT IN THE ARGUMENT OF THE LD DR FOR REMANDING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY UNSECURED LOANS AMOUNTING TO RS. 16,77,040/ - ONLY THE BASIS OF FRESH EVIDENCE FURNISH ED BEFORE THE CIT (A) , AND SUCH FURTHER MATERIAL, WHICH THE ASSESSEE MAY CHOOSE TO RELY UPON IN SUPPORT OF HIS STAND . WE ORDER ACCORDINGLY, AND DIRECT THE ASSESSING OFFICER TO VERIFY THE DETAILS FURNISHED BY THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, THE AFORESAID GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES, AS PRONOUNCED IN THE OPEN COURT BEFORE BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 28 TH MAY, 2015. SD/ - SD/ - ( SANJAY GARG ) ( G.S. PANNU ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 28 .5 .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