Sh. Dinesh Chand Gupta, Prop, New Delhi V. ITO, New Delhi

ITA 3991/DEL/2013

• Counselvise Citation: 399120114 RSA 2013
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-01-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 26-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINIVAS KUMAR
• Assessee Lawyers: SHYAM MOHAN
• Keywords: Principle of natural justice; Assessment record; Onus to prove
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I/SMC NEW DELHI BEFORE SHRI R.S.SYAL, ACCOUNTANT MEMBER AND SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-3991/DEL/ 2013 (ASSESSMENT YEAR-2001-02) SH.DINESH CHAND GUPTA, PROP., M/S AGGARWAL DUPLEX BOARD CO., E-2/260, SHASTRI NAGAR, NEW DELHI PAN-AAKPG7886N (APPELLANT) VS ITO, WARD-19(3), NEW DELHI. (RESPONDENT) APPELLANT BY SH. SHYAM MOHAN, ADV. RESPONDENT BY SH. SRINIVAS KUMAR, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 25.02.2013 OF CIT(A)-XXII, NEW DELHI PERTAINING TO 2001-02 ASS ESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THAT CIT APPEALS XXII NEW DELHI HAS ERRED AND ACTE D ARBITRARILY IN CONFIRMING THE DISALLOWANCE OF LOAN CREDIT OF RS .200000.00 RECEIVED FROM SMT. SEEMA GUPTA WHO IS ALSO AN EXIST ING ASSESSEE AND HAD SHOWN THIS AMOUNT IN HIS STATEMENT OF AFFAI RS FILED ALONG WITH HER RETURN OF INCOME FILED BY HER. 2. THE LEARNED C.I.T APPEAL FAILED TO APPRECIATE THE W RITTEN SUBMISSIONS/ARGUMENTS AND COPIES OF DOCUMENTS FILED BY THE APPELLANT. 3. THAT THE LEARNED C.I.T HAS NOT FOLLOWED THE PRINCIP LE OF NATURAL JUSTICE WHILE DECIDING THE APPEAL. 4. THE LEARNED C.I.T. APPEAL HAS WRONGLY APPLIED THE P ROVISIONS OF SECTION 68 OF THE INCOME TAX ACT AND WRONGLY APPLIE D THE RATIO OF THE JUDGEMENT OF THE CALCUTTA HIGH COURT REPORTED I N I.T.R. 208 PAGE 265 AND PUNJAB & HARYANA HIGH COURT REPORTED I N 140 I.T.R. PAGE 149. I.T.A .NO.-3991/DEL/2013 2 5. THAT THE LEARNED C.I.T. APPEAL HAD NOT ALLOWED ANY OPPORTUNITY TO THE TO PRESENT HIS CASE. NO NOTICE FOR 17.10.2012, FOR 21.1.2013 AND FOR 22.2.2013 WAS EVER SERVED ON THE ASSESSEE. NO NOTICE WAS EVER SERVED ON THE COUNSEL OF THE ASSESSEE. 2. AT THE TIME OF HEARING THE LD. AR REQUESTED FOR TIME STATING THAT HE NEEDS TIME TO FILE A PAPER BOOK. A PERUSAL OF THE RECORD SHOWS THAT AN ADJOURNMENT FOR SIMILAR REASONS WAS SOUGHT ON 19.12 .2013. ACCORDINGLY CONSIDERING THE GROUND NO-3 RAISED IN THE PRESENT A PPEAL AND THE MATERIAL AVAILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL ON MERIT AFTER HEARING THE PARTIES. THE REC ORD SHOWS THAT THIS IS THE SECOND ROUND BEFORE THE TRIBUNAL. IT IS SEEN THAT IN THE FIRST ROUND AGGRIEVED BY THE ACTION OF THE CIT(A) VIDE HIS ORDER DATED 22.08 .2003 THE SMC BENCH OF THE TRIBUNAL IN ITA NO-1637/DEL/2004 APPRECIATED THE FA CTS IN THE FOLLOWING MANNER:- THE APPELLANTS AUTHORIZED REPRESENTATIVE HAS EXPL AINED BEFORE ME THAT NO SUMMONS WERE SERVED ON SMT. SEEMA GUPTA. THE AO NE VER INFORMED THE APPELLANT THAT SUMMONS HAD BEEN SENT AND THERE HAD BEEN NO COMPLIANCE. THE APPELLANT WAS NEVER ASKED BY THE AO TO PRODUCE SMT. SEEMA GUPTA BEFORE HIM. PHOTO COPIES OF SOME HAND WRITTEN PAGE S HAVE BEEN PRODUCED BEFORE ME, WHICH ARE SAID TO BE THE ACCOUNTS KEPT B Y SMT. SEEMA GUPTA. IT IS STATED THAT SMT. SEEMA GUPTA WAS ASSESSED BY THE SAME AO IN THE SAME WARD. THE FACTS CLAIMED BY THE APPELLANT COULD BE VERIFIED BY THE AO BY LOOKING AT HER ASSESSMENT RECORDS. HOWEVER, THIS H AS NOT BEEN DONE. THE APPELLANTS COUNSEL HAS REFERRED TO TWO COURT DECIS IONS IN ORDER TO ASSERT THAT THE APPELLANT HAD DISCHARGED THE ONUS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENES S OF THE TRANSACTION. THE AO HAD BROUGHT NO EVIDENCE ON RECORD TO PROVE THE A PPELLANT WRONG. I HAVE GONE THROUGH THE FACTS OF THE CASE. SMT. S EEMA GUPTA HAS DEPOSITED A LARGE NUMBER OF CASH AMOUNTS BETWEEN 10.4.2000 TO 1.12.2000 IN ORDER TO BUILD UP A BALANCE OF RS.2,02,000 IN HER BANK ACCO UNT. THE LOAN OF RS.2,00,000 HAS BEEN GIVEN ON 1.12.2000 BY ISSUING A CHEQUE. THERE IS NO OTHER WITHDRAWAL IN THIS BANK ACCOUNT. THE EXPLANA TION GIVEN BY THE APPELLANTS COUNSEL, AND THE HAND WRITTEN PAGES, ST ATED TO BE HER BOOKS OF ACCOUNT, ARE NOT INDEPENDENTLY VERIFIABLE WITH REFE RENCE TO ANY RELATED SOURCE. THEREFORE, THE SOURCES OF THE CASH DEPOSIT S IN THE BANK ACCOUNT OF SMT. SEEMA GUPTA CANNOT BE TREATED AS SATISFACTORY EXPLAINED. THIS LOAN HAS BEEN SHOWN IN THE NAME OF THE APPELLANTS WIFE WHO IS A CLOSE RELATIVE. IN SUCH A SITUATION, THE CASE LAW QUOTED BY THE APP ELLANT IS NOT APPLICABLE. I.T.A .NO.-3991/DEL/2013 3 ON THE OTHER HAND, THE HON. PATNA HIGH COURT HAVE H ELD THE FOLLOWING OPINION IN THE CASE OF SAROGI TRADING CORPN. VS CIT REPORTED IN 103 ITR 344 (PATNA). 2.1. CONSIDERING THE SAME, THE SMC BENCH CAME TO TH E FOLLOWING CONCLUSIONS:- I HAVE HEARD THE LEARNED D.R. IN THIS APPEAL. IT IS CLEAR FROM ABOVE OBSERVATIONS THAT SUMMONS SENT U/S 131 OF I.T. ACT ON CREDITOR SMT. SEEMA GUPTA WERE NOT SERVED ON HER. THE A.O. ALSO DID NO T CONSIDER RECORD OF SMT. SEEMA GUPTA WHO WAS BEING ASSESSED BY THE SAME A.O. YET HE REACHED THE CONCLUSION THAT CASH CREDITS COULD NOT BE TREATED AS SATISFACTORY EXPLAINED. IN MY CONSIDERED VIEW THE LEARNED CIT(A PPEALS) FAILED TO CONSIDER MATERIAL EVIDENCE AVAILABLE ON RECORD. HE IGNORED CONFIRMATION FILED FROM THE CREDITOR, DID NOT ENFORCE THE ATTEND ANCE OF SMT. GUPTA TO VERIFY THE CLAIM OF THE ASSESSEE NOR REFERRED TO AS SESSMENT RECORD OF SMT. SEEMA GUPTA. ON THE FACTS OF THE CASE, I HOLD THAT CONCLUSION ARRIVED BY THE LEARNED CIT(APPEALS) IS UNTENABLE. THE MATTER IS R EQUIRED TO BE RESTORED TO THE FILE OF THE LEARNED CIT(APPEALS) WITH A DIRECTI ON TO CONSIDER MATERIAL REFERRED TO ABOVE AND THEN RE-DECIDE THE ISSUE IN A CCORDANCE WITH LAW. 3. PURSUANT TO THE ABOVE DIRECTION, THE IMPUGNED OR DER HAS BEEN PASSED. A PERUSAL OF THE SAME SHOWS THAT TO THE NOTICES SENT NO COMPLIANCE WAS MADE BY THE ASSESSEE. THE CIT(A) RECORDS THESE FACTS IN PA RAS 7, 8 & 9 AND CONCLUDES THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL AND THE APPEAL CAN BE DISMISSED AT THE OUTSET. HOWEVER THEREAFTER HE ON CONSIDERING THE FACTS AVAILABLE ON RECORD CONFIRMED THE ACTION OF THE AO. IN THE LIGHT OF THESE PECULIAR FACTS AND CIRCUMSTANCES WHEREIN LD. AR HAS BEEN PETITIONING FOR TIME IN ORDER TO FILE PAPER BOOK, ADMITTEDLY THE RELEVAN T FACTS HAVE NOT BEEN TAKEN NOTE OF. CONSIDERING THE PLEA RAISED IN GROUND NO- 3 AND TAKING NOTE OF THE FACT THAT THE IMPUGNED ORDER WAS PASSED WITHOUT HEARING THE ASSESSEE, ACCORDINGLY AFTER HEARING THE LD. SR DR, WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE AO. THE AO SHALL PASS A SPEAKING ORDER AFRESH TAKING RELEVANT FACTS INTO CONSIDERATION AFTER HEARING THE ASSESSEE. THE ASSE SSEE IS ALSO DIRECTED TO ENSURE THAT THE OPPORTUNITY GRANTED IS NOT FRITTERED AWAY AND IS FULLY UTILIZED PROPERLY I.T.A .NO.-3991/DEL/2013 4 BY ENSURING FULL AND COMPLETE PARTICIPATION IN THE ASSESSMENT PROCEEDINGS. IN THE EVENTUALITY THE OPPORTUNITY SO GRANTED IS ABUSE D BY REMAINING ABSENT FOR UNJUSTIFIED REASONS OR NOT PLACING FULL FACTS ON RE CORD THE AO WOULD BE AT LIBERTY TO PASS AN ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE SAID ORDER WAS PRONOUNCED IN THE PRESENCE OF THE PARTIES IN THE O PEN COURT AT THE TIME OF HEARING. 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH OF JANUARY 2014. SD/- SD/- (R.S.SYAL) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/01/2014 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSIS TANT REGISTRAR ITAT, NEW DELHI