VINODINI VYAS, MUMBAI V. ITO 19(2)(2), MUMBAI

ITA 4097/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1995 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANADHIR GUPTA
• Assessee Lawyers: SANJUKTA CHOUDHARY
• Keywords: Unexplained cash credit; Business income; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 4097/MUM/2013 (ASSESSMENT YEAR: 2009-10) SMT. VINODINI VYAS VS. INCOME TAX OFFICER - 19(2)(2) FLAT NO. 22, SHANTINIKETAN NEAR YOGA INSTITUTE SANTACRUZ (E), MUMBAI 400055 3 RD FLOOR, PIRAMAL CHAMBERS LALBAUG, PAREL MUMBAI 400012 PAN - AFSPP8750P APPELLANT RESPONDENT ASSESSEE BY: SHRI SANJUKTA CHOUDHARY REVENUE BY: SHRI RANADHIR GUPTA DATE OF HEARING: 10.11.2016 DATE OF PRONOUNCEMENT: 16.11.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-30, MUMBAI DATED 11.02.2013 FOR A.Y. 2009-10. IN THE CA SE ON HAND, THIS APPEAL OF THE ASSESSEE WAS ORIGINALLY DISMISSED BY AN ORDE R OF EVEN NUMBER DATED 13.04.2016, EX-PARTE, PRIMARILY FOR NON PROSECUTION . SUBSEQUENTLY, THE ASSESSEE PREFERRED A MISCELLANEOUS APPLICATION AGAI NST THE SAID ORDER AND VIDE ORDER IN MA NO. 152/MUM/2016 DATED 26.10.2016 THE O RDER WAS SET ASIDE AND THIS APPEAL WAS RESTORED TO BE HEARD ON MERITS. 2. THE FACTS IN THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE IS RUNNING TWO PROPRIETARY CONCERN S, I.E. M/S. MAXWELL VISION AND M/S. DESIGNER POINT, DURING THE YEAR UND ER CONSIDERATION WHICH ARE INTO CABLE OPERATIONS AND READYMADE GARMENTS BU SINESS RESPECTIVELY. THE RETURN OF INCOME FOR A.Y. 2009-10 WAS FILED DEC LARING INCOME OF ` 2,61,356/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX AC T, 1961 (IN SHORT 'THE ITA 4097/MUM/2013 SMT. VINODINI VYAS 2 ACT') WHEREIN THE INCOME OF THE ASSESSEE WAS DETERM INED AT ` 25,43,070/- IN VIEW OF, INTER ALIA, THE FOLLOWING ADDITIONS: - (I) ADDITION ON ACCOUNT OF UNEXPLAINED ` 16,96,500/- CASH DEPOSITS (II) ADDITION ON ACCOUNT OF UNDISCLOSED ` 5,85,214/- BUSINESS INCOME 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR A.Y. 2 009-10, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-30, MUMBAI. T HE LEARNED CIT(A) DISMISSED THE ASSESSEES APPEAL EX-PARTE VIDE THE I MPUGNED ORDER DATED 11.02.2013. IN THIS REGARD, THE LEARNED CIT(A) HAS OBSERVED THAT HE WAS LEFT WITH NO OTHER OPTION BUT TO DECIDE THE APPEAL ON MERITS EX-PARTE AS HE WAS OF THE VIEW THAT THE ASSESSEE WAS NOT SERIOUS I N PURSUING THE APPEAL, SINCE INSPITE OF AFFORDING THE ASSESSEE SIX OPPORTU NITIES OF HEARING, THE ASSESSEE FAILED TO APPEAR BEFORE HIM AND FILE DETAI LS/SUBMISSIONS IN SUPPORT OF THE GROUNDS OF APPEAL BEFORE HIM WHICH W ERE IN RESPECT OF AND CHALLENGED THE FOLLOWING ISSUES: - (I) ADDITION OF ` 16,96,500/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN ICICI BANK ACCOUNT, AND (II) ADDITION OF ` 5,85,214/- BEING UNDISCLOSED BUSINESS INCOME. 3. AGGRIEVED BY THE ORDER OF THE CIT(A)-30, MUMBAI DAT ED 11.02.2013, FOR A.Y. 2009-10THE ASSESSEE HAS PREFERRED THIS APP EAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS: - A. PRIMA FACIE 1. ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEAR NED CIT (A) HAS PASSED ORDER WITHOUT COMPLYING WITH ME PRINCIPLES O R NATURAL JUSTICE AND FAIRNESS. B. PASSING OF ORDER UNDER SECTION 144 OF INCOME TAX ACT 1961 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE , TH E IMPUGNED ORDER PASSED BY THE LEARNED CIT (A) ARE WITHOUT DUE CONSIDERING OF THE PROVISIONS OF SECTION 143 (3) OF THE INCOME TAX ACT 1961 FOR JUSTIFYING THE ACTION OF PASSING ASSESSMENT ORDER B Y THE LEARNED ASSESSING OFFICER ACCORDINGLY WITH THE LAW LAID DOW N BY HON. COURTS FROM TIME TO TIME. ITA 4097/MUM/2013 SMT. VINODINI VYAS 3 C. ON UNEXPLAINED CASH DEPOSIT 3. THAT LD. CIT (A) HAS ERRED IN UPHELDING THE ADDI TION OF RS.16,96,500/- ON ACCOUNT OF UNEXPLAINED CASH DEPOS IT IN BANK, WITHOUT APPRECIATING THE FACTS OF THE CASE AND PROV ISIONS OF THE INCOME TAX ACT, 1961. D. ON SHARE TRADING INCOME 4. THE LD. CIT (A) HAS ERRED IN ADDING OF RS 5,85,2 14/- DONE BY THE ASSESSING OFFICER ON ADHOC BASIS, WITHOUT APPRECIAT ING THE FACTS OF THE CASE AND PROVISIONS OF THE INCOME TAX ACT, 1 961. D. OTHER GROUNDS 5. APPELLANT DESERVES THE RIGHT TO ADD, ALTER, AMEN D THE ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. THE GROUNDS AT S.NO. 1 & 5 , BEING GENERAL IN NATURE NO ADJUDICATION IS CALLED FOR THEREON. 5. GROUNDS NO. 2 EX-PARTE ORDER BY CIT(A) 5.1 THE LEARNED A.R. OF THE ASSESSEE WAS HEARD IN S UPPORT OF THIS GROUND. ACCORDING TO THE LEARNED A.R., SINCE THE LE ARNED CIT(A) HAD DISPOSED OFF HER APPEAL EX-PARTE FOR NON-PROSECUTIO N, THE GROUNDS/ ISSUES RAISED WERE NOT DISPOSED OFF ON MERITS BEFORE THE L EARNED CIT(A) IN RESPECT OF ADDITIONS MADE BY THE AO IN THE ORDER OF ASSESSM ENT ON: - (I) THE ADDITION OF ` 16,96,000/- ON ACCOUNT OF CASH DEPOSITS IN THE ASSESSEES ICICI BANK ACCOUNT IN THE PERIOD UNDER C ONSIDERATION, AND (II) ADDITION OF ` 5,85,214/- IN RESPECT OF SHARE TRADING ACTIVITIES O F THE ASSESSEE. IT IS CONTENDED THAT IN VIEW OF THE ABOVE REASONS ITSELF, THE IMPUGNED ORDER OF THE LEARNED CIT(A) DISMISSING THE ASSESSEE S APPEAL EX-PARTE SHOULD BE SET ASIDE AND THE MATTER RESTORED BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION. 5.2 ADMISSION OF ADDITIONAL EVIDENCES ACCORDING TO THE LEARNED A.R. OF THE ASSESSEE THE AUTHORITIES BELOW HAD NOT EXAMI NED THE ENTIRE DETAILS/FACTS OF THE MATTER IN RESPECT OF THE ADDIT IONS AT (I) & (II) (SUPRA), BECAUSE THOUGH NECESSARY DOCUMENTS WERE PROVIDED TO HER ERSTWHILE ITA 4097/MUM/2013 SMT. VINODINI VYAS 4 CHARTERED ACCOUNTANT WHO FAILED TO APPEAR BEFORE TH E AUTHORITIES BELOW AND SUBMIT THE SAME, LEADING TO THE PRESENT PLIGHT OF THE ASSESSEE. IN THIS CONTEXT AND IN ORDER TO HAVE THE ISSUES IN APPEAL H EARD AND CONSIDERED ON MERITS, THE ASSESSEE FILED AN APPLICATION FOR ADMIS SION OF ADDITIONAL EVIDENCES UNDER RULE 29 OF THE APPELLATE TRIBUNAL R ULES IN PAPER BOOK II, PGS 1 TO 47 COMPRISING: (I) TRADING STATEMENT OF ICICI BANK (II) DEMAT STATEMENT FROM ICICI BANK AND (III) BANK STATEMENT IN THIS APPLICATION, THE ASSESSEE SUBMITS THAT THE DOCUMENTS COMPRISING THE ADDITIONAL EVIDENCE COULD NOT BE FIL ED BEFORE THE AUTHORITIES BELOW BECAUSE THOUGH THEY WERE PROVIDED TO HER CHA RTERED ACCOUNTANT HE/SHE DID NOT APPEAR BEFORE THE OFFICERS AND SUBMI T THEM AND THEREFORE THE CASE IS IN ITS PRESENT STATE. ACCORDING TO THE ASSESSEE, THE DOCUMENTS FORMING PART OF THE ADDITIONAL EVIDENCE ARE VERY MU CH RELEVANT TO THE ISSUES INVOLVED IN THE APPEAL AND IT WAS PRAYED THA T THE SAME SHOULD BE ADMITTED FOR CONSIDERATION IN THIS APPEAL SO THAT A CORRECT VIEW CAN BE TAKEN BY THE AO AFTER DUE VERIFICATION. THE LEARNED D.R. WAS ALSO HEARD IN THE MATTER. AFTER CAREFUL CONSIDERATION OF THE ASSE SSEES APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF T HE APPELLATE TRIBUNAL RULES, WE ARE OF THE VIEW THAT SINCE THE DETAILS SO UGHT TO BE SUBMITTED (SUPRA) ARE ESSENTIAL AND WOULD GO TO THE ROOT OF T HE MERITS OF THE TWO ISSUES WHICH ARE THE SUBJECT MATTER OF APPEAL, WE, THEREFORE IN THE INTEREST OF EQUITY AND JUSTICE ADMIT THE SAME FOR CONSIDERAT ION. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ON A PERUSAL OF THE IMPUGNED ORDER IT IS CLEAR THAT THE SAME WAS ADMITTEDLY PASSED EX-PARTE ON THE BASIS OF MATERIAL ON RECORD WHICH ESTABLISH THAT THE ASSESSE ES APPEAL WAS DISMISSED FOR NON-PROSECUTION AND THE TWO GROUNDS R AISED IN RESPECT OF (I) ADDITION OF ` 16,96,500/- MADE ON ACCOUNT OF CASH DEPOSITS IN THE ASSESSEES BANK ACCOUNT AT ICICI BANK IN THE PERIOD UNDER CONSIDERATION AND (II) THE ADDITION OF ` 5,85,214/- AS UNDISCLOSED INCOME ON ACCOUNT OF ITA 4097/MUM/2013 SMT. VINODINI VYAS 5 SHARE TRADING ACTIVITIES, WERE CERTAINLY NOT DISPOS ED OFF ON MERITS. IN THIS FACTUAL MATRIX OF THE CASE, WE ARE OF THE VIEW THAT THE INTEREST OF EQUITY AND JUSTICE WOULD BE WELL SERVED IF THE IMPUGNED EX-PAR TE ORDER OF THE LEARNED CIT(A) BE SET ASIDE AND DO SO; THEREBY RESTORING TH E MATTER BACK TO HIS FILE FOR DE NOVO CONSIDERATION AND DE NOVO ADJUDICATION THEREON AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AN D TO FILE SUBMISSIONS/ DETAILS, ETC. REQUIRED. IN THIS CONTEXT WE DIRECT T HAT THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE AT PAPER BOOK-I I (PG. 1 TO 47) IN SUPPORT OF THE ASSESSEES GROUNDS OF APPEAL C-3 AND D-4 ON MERITS ARE TO BE CONSIDERED, EXAMINED AND VERIFIED BY THE LEARNED CIT(A) AND ADJUDICATED UPON AFTER ALSO AFFORDING THE AO ADEQUA TE OPPORTUNITY OF BEING HEARD IN ORDER TO COUNTER, REBUT THE ADDITIONAL EVI DENCE ADMITTED. IT IS ACCORDINGLY ORDERED. CONSEQUENTLY, GROUND B-2 OF TH E ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUNDS C- 3AND D-4 6.1 IN VIEW OF OUR SETTING ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORING THE MATTER TO THE FILE THE LEARNED CI T(A) TO DECIDE THE TWO ISSUES OF (I) ADDITION OF UNEXPLAINED CASH CREDITS IN THE ASSESSEES BANK ACCOUNT IN ICICI BANK ( ` 16,96,500/-) AND (II) ADDITION ON ACCOUNT OF UNDISCLOSED INCOME FROM SHARE TRADING ACTIVITIES, W E DEEM IT APPROPRIATE NOT TO ADJUDICATE ON THESE TWO GROUNDS ON MERITS. 7 IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2009- 10 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 16 TH NOVEMBER, 2016 ITA 4097/MUM/2013 SMT. VINODINI VYAS 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -30, MUMBAI 4. THE CIT - 19, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.