AJAYKUMAR JINDAL (HUF), MUMBAI V. ITO 13(2)(4), MUMBAI

ITA 4296/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3871 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 02-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY KUMAR JINDAL
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 68; 148

Judgement Text

- , , IN THE INCOME TAX APPELLATE TRIBUNAL J BE NCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER / I .TA NO. 4296/MUM/2014 ( / ASSESSMENT YEAR: 2009-10 SHRI AJAYKUMAR JINDAL HUF, 512, ASHIRWAD BLDG., AHMEDABAD STREET, MASJID (E), MUMBAI-400 009 / VS. THE ITO - 13(2)(4), MUMBAI ./ ./ PAN/GIR NO. AADHM 5918C ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI AJAY KUMAR JINDAL / RESPONDENT BY: SHRI ASHISH HELIWAL / DATE OF HEARING :02.03.2016 ! / DATE OF PRONOUNCEMENT :27.04.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. CIT(A)-24, MUMBAI DATED 26.03.2014 PERTAINING TO A SSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE IS CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ESTIMATION OF NET PROFIT WHILE COMPLETING THE ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE ACT A ND ALSO CONFIRMING ITA NO. 4296/M/2014 2 THE ADDITION MADE U/S. 68 TOWARDS CAPITAL CONTRIBUT ION OF THE MEMBERS OF THE HUF. 3. SHRI AJAY KUMAR JINDAL, THE KARTA OF THE ASSESSE E HUF APPEARED HIMSELF ON BEHALF OF THE HUF. HE SUBMITS THAT ADDI TIONS WERE MADE WITHOUT PROPERLY APPRECIATING THE SUBMISSIONS OF TH E ASSESSEE. HE SUBMITS THAT REASONS FOR REOPENING THE ASSESSMENT W ERE ALSO NOT SERVED ON THE ASSESSEE. THE NET PROFIT WAS ESTIMAT ED AT 1.5% INSTEAD OF 0.45% AS RETURNED BY THE ASSESSEE. SHRI AJAYKUM AR JINDAL FURTHER SUBMITS THAT ADDITION U/S. 68 WAS MADE BEING THE CA PITAL INTRODUCED BY THE MEMBERS OF HUF WITHOUT APPRECIATING THAT THE SE AMOUNTS WERE BORROWED FROM MEMBERS OF HUF IN THEIR INDIVIDU AL CAPACITY AND USED AS CAPITAL IN THE HUF. HE FURTHER SUBMITS THAT THERE WAS NO PROPER OPPORTUNITY GIVEN BY THE ASSESSING OFFICER B EFORE ASSESSMENT WAS COMPLETED. THEREFORE, HE PRAYS FOR SETTING ASI DE THE ASSESSMENT FOR DOING AFRESH PROVIDING PROPER OPPORTUNITY TO SU BSTANTIATE THE CLAIMS OF THE ASSESSEE HUF. 4. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY S UPPORTS THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITS THAT IN THE ABSENCE OF THE DETAILS FURNISHED BEFORE THE ASSESSING OFFICER TO P ROVE THE SOURCE FOR INVESTMENTS AND IN VIEW OF THE FACT THAT THE ASSESS EE HAS SHOWN LESS PROFIT, THE ASSESSING OFFICER IS PERFECTLY JUSTIFIE D IN ESTIMATING THE NET PROFIT AND BRINGING TO THE TAX THE UNEXPLAINED CASH CREDITS INTRODUCED BY THE ASSESSEE INTO THE BOOKS OF HUF. ITA NO. 4296/M/2014 3 5. HEARD BOTH PARTIES, PERUSED THE ORDERS OF THE LO WER AUTHORITIES. ON READING FROM THE ASSESSMENT ORDER, WE FIND THAT IN THIS CASE RETURN OF INCOME WAS FILED ON 30.3.2009 DECLARING T OTAL INCOME OF RS. 77,441/-. THE RETURN WAS PROCESSED U/S. 143(1) AND WAS NOT SELECTED FOR SCRUTINY, THEREFORE THERE WAS NO SCRUT INY ASSESSMENT U/S. 143(3). LATER ON NOTICE U/S. 148 WAS ISSUED ON 22. 3.2011 AND THE ASSESSMENT U/S. 143(3) R.W. SEC. 147 WAS COMPLETED ON 8.12.2011 DETERMINING THE INCOME AT RS. 12,21,940/-. ON PERU SAL OF THE ASSESSMENT ORDER, WE DO NOT FIND THE REASONS FOR IS SUE OF NOTICE U/S. 148 FOR REOPENING THE ASSESSMENT. WE ALSO FIND FRO M PAGE-3 OF THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER ON OBSE RVING FROM THE RECORD AND TAKING NOTE OF CERTAIN FACTS WAS OF THE OPINION THAT ASSESSEE IN ITS RETURN OF INCOME CERTAIN SALES WERE NOT ACCOUNTED FOR AND THIS IS THE REASON HE MENTIONED FOR REOPENING T HE ASSESSMENT. IT WAS THE SUBMISSION OF THE ASSESSEE THAT THE REASONS WERE NOT SERVED ON THE ASSESSEE. THE REVENUE ALSO DID NOT PRODUCE THE REASONS FOR REOPENING OF THE ASSESSMENT BEFORE US. IT IS ALSO THE SUBMISSION OF THE ASSESSEE THAT THE CAPITAL INTRODUCED INTO THE H UF IS ALL BORROWED FROM THE MEMBERS OF HUF AND THERE WAS NO PROPER OPP ORTUNITY GIVEN TO PROVE CREDIT WORTHINESS OF THE PARTIES MAK ING SUCH CONTRIBUTION AS CAPITAL OF HUF. TAKING THE TOTALIT Y OF FACTS INTO CONSIDERATION, WE SET ASIDE THE ASSESSMENT AND DIRE CT THE ASSESSING OFFICER TO FRAME THE ASSESSMENT DENOVO AFTER PROVID ING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AS SESSEE SHALL CO- OPERATE WITH THE ASSESSING OFFICER AND PROVIDE NECE SSARY DETAILS FOR COMPLETION OF ASSESSMENT. THE ASSESSING OFFICER SH ALL ALSO PROVIDE REASONS FOR REOPENING THE ASSESSMENT TO THE ASSESSE E AND COMPLETE THE ASSESSMENT ACCORDINGLY. ITA NO. 4296/M/2014 4 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH APRIL, 2016. SD/- SD/- (ASHWANI TANEJA) (C.N. PRASAD ) / ACCOUNTANT MEMBER $ % /JUDICIAL MEMBER MUMBAI; ( DATED : 27 TH APRIL, 2016 . % . ./ RJ , 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. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI