Sh. Asheesh Kumar Jain, Mathura V. A.C.I.T.-3, Mathura

ITA 440/AGR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94126 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 28-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BELU SINHA
• Assessee Lawyers: M M AGARWAL
• Keywords: Unexplained investment; Principle of natural justice
• Section: 143(3); 142(1); 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SH RI G.C. GUPTA, VICE PRES ID ENT AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER ITA NO. 440 / AG RA / 201 2 ASSESSMENT YEAR : 20 08 - 09 SHRI ASHEESH KUMAR JAIN , VS. ASSTT. COMMISSIONER OF INCOME TAX - 3 , M/S HOME FURNITURE & INTERIORS , MATHURA. 10, MADHUVAN ENCLAVE, MATHURA . (PAN A A WPJ 7877 Q ) . ITA NO.466/ AG RA / 201 2 ASSESSMENT YEAR: 2008 - 09 INCOME TAX OFFICER - 3 (1) , VS. SHRI ASHEESH KUMAR JAIN, MA T HURA. PROP. M/S HOME FURNITURE & INT ERIORS, 10, MADHUVAN ENCLAVE, MATHURA. (PAN AAWPJ 7877 Q). (APPELLANT S ) (RESPONDENT S ) A SSESSEE BY : SHRI M.M. AGARW A L, C.A. RE VENUE BY : S MT. BELU SINHA, SR. D.R. DATE OF HEARING : 20 .07. 201 5 DATE OF PRONOUNCEMENT : 12.08 .2015 ORDER PER INTURI RAMA RAO , ACCOUNTANT MEMBER: TH ESE ARE CROSS APPEAL S FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) - I, AGRA DATED 30.03.2012 FOR THE A.Y. 2008 - 09. ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 2 2. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL : - 1. BECAUSE , ON A DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS MADE, LEARNED CIT (APPEALS) HAS ERRED IN NOT DELETING THE ENTIRE VARIATION TO THE RETURNED INCOME ON ACCOUNT OF THE FACT THAT NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BY THE AO AND THE NOTICE DATED 28.08.2010 ISSUED BY THE INCOME TAX OFFICER 3(1), MATHURA WAS ILLEGAL, WITHOUT JURISDICTION AND B A D IN LAW . 2. BECAUSE , LEARNED CIT (APPEALS ) HAS ERRED IN NOT APPREC IATING THE ALTERNATE CONTENTION OF THE APPELLANT THAT IN THE EVENTUALLY NOTICE DATED 28.08.2010 ISSUED BY THE INCOME TAX OFFICER 3(1), MATHURA WAS DEEMED TO BE A VALID NOTICE THEN ALSO THE CONSEQUENT ASSESSMENT ORDER PASSED BY THE AO WAS WHOLLY WITHOUT JURISDICTION , ILLEGAL, BAD IN LAW AND LIABLE TO BE CANCELLED. 3 . BECAUSE , IN ANY VIEW OF THE MATTE R, LEARNED CIT (APPEALS) HAS ERRED IN REJECTING THE CONTENTIONS OF THE APPELLANT ON THE BASIS OF ALLEGED SCHEME OF CA S S , WHICH COULD NOT OVERRIDE OR DIL UTE STATUTORY PROVISIONS OF LAW, RULES AND NOTIFICATIONS ISSUED THEREUNDER . 4 . BECAUSE , THE DECISION ARRIVED BY THE LEARNED CIT(APPEALS) ON THIS SCORE IS PERVERSE, ILLEGAL AND MIS - APPRECIATION OF THE PROVISIONS OF LAW AND AGAINST THE PRECEDENCE CITED BE FORE HIM. WHOLLY WITHOUT PREJUDICE TO THE ABOVE 5 . BECAUSE , IN THE FACT AND CIRCUMSTANCES OF THE CASE, LEARNED CIT (APPEALS) HAS ERRED IN NOT GRANTING APPROPRIATE RELIEF TO THE APPELLANT BY HOLDING THAT THE LOSS OF WHOLE OF RS.2,679,492 HAS TAKEN P LACE AND JUST GRANTING RELIEF OF RS.2,129,492 AGAINST THE ADDITION OF RS.2,229,492 MADE BY THE AO THEREBY SUSTAINING ADDITION OF RS.100,000. 6 . BECAUSE , LEARNED CIT (APPEALS) ON DUE APPRECIATION OF FACTS, CIRCUMSTANCES OF THE CASE AND EXPLANATION SUB MITTED HAS ERRED IN HOLDING THAT JOTTINGS AT PAGE 60 TO 66 OF ANNEXURE A - 2 OF IMPOUNDED MATERIAL REPRESENTED SALES OF RS.2,644,484 MADE BY THE APPELLANT AND THEREBY SUSTAINING ADDITION OF RS.238,800. ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 3 7. BECAUSE , IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, LEARNED CIT (APPEALS) HAS ABSOLUTELY ERRED IN CONFIRMING ADDITION OF RS. 78,600 ASSUMING THE PAGE 4 OF ANNEXURE A - 1 OF IMPOUNDED MATERIAL AS A TRANSACTION OF COMMISSION IN LAND AND PROPERTY . WHILE UPHOLDING SUCH ADDITION , LEARNED CIT (APPEALS) IGNORE D THAT THE SAID IMPOUNDED PAPER DID NOT INDICATE ANY DATE OF TRANSACTION OR THAT ANY COMMISSION PAYMENT WAS INVOLVE IN THAT TRANSACTION AND T HAT IT WAS RELATED TO THE APPELLANT IN ANY MANNER. THE ADDITION SO SUSTAINED IS ENTIRELY BASED ON CONJECTURES AN D SURMISES. 8 . BECAUSE , THE ASSESSMENT ORDER WAS WHOLLY ILLEGAL, WITHOUT JURISDICTION AND BAD IN LAW AND CIT (APPEALS) ERRED BOTH IN FACTS AND LAW IN SUSTAINING THE SAME. 9 . BECAUSE , THE ORDER APPEALED AGAINST IS CONTRARY T O THE FAC T S, LAW AND PRINCI PL ES O F NATURAL JUSTICE. 3 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THAT THE LD . CIT(A) HAS ERRED IN LAW AND IN FACTS IN MAKING DELETION OF RS.21,29,492/ - MADE BY THE A . O . ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE I.T. ACT , 1961 WITHOUT APPRECIATING THE FAC T S THAT THIS A MOUNT HAD BEEN ADDED BY THE A . O . IN ABSENCE OF CONFIRMATIONS OF THE CONCERNED PERSONS. 2. THAT THE LD. CIT( A ) H A S ERRED IN L A W AND IN FACTS IN DELETING THE ADDITIONS OF RS.11,99,200/ - OUT OF UNACCOUNTED SAL E OF FURNITURE OF RS.26,44,484/ - BY APPLYING THE G.P. RATE OF 9.03% , WORKED OUT TO RS.2,38,800/ - IN ABSENCE OF REASONABLE REPLY FROM THE ASSESSEE WITH ESTIMATED INVESTMENT BEING OUTSIDE THE BOOKS AT RS.12,00,000/ - AGGREGATING TO RS.14,38,800/ - , WITHOUT APP RECIATING THE FACTS THAT THE ADDITION ON UNACCOU NTED INVESTMENT CAN BE MADE FOR MAKING UNACCOUNTED SALES ON THE BASIS OF THE FINDING OF THE CASE. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY ANY ONE OR MORE GROUND (S) OF APPEAL DU RING THE APPELLATE PROCEEDINGS. ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 4 4. THAT THE ORDER OF THE CIT(A) - 1, AGRA DATED 31.03.201 2, BEING ERRONEOUS IN LAW AND ON FACTS BE SET ASIDE AND THAT THE ORDER DATED 22.12.2006 OF THE ASSESSING OFFICER BE RESTORED. 4 . FIRST WE TAKE UP THE APPEAL FILED BY THE ASSESSEE I.E. ITA NO.440/AGRA/2012. BRIEFLY THE FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF SALE OF FURNITURE UNDER THE NAME AND STYLE OF M/S. HOME FURNITURE & INTERIORS . THE RETURN OF INCOME FOR THE A.Y. 2008 - 09 WAS FILED ON 30.03.2010 DISCLOSING INCOME OF RS.16,91,840/ - . A SURVEY OPERATION UNDER THE PROVISIONS OF SECTION 133A OF THE INCOME TAX ACT , 1961 ( THE A CT HEREINAFTER ) W AS CONDUCTED ON 12.03.2008 AND THE ITO, WARD - 3(1), MATHURA ISSUED NOTICE UNDER SE CTION 143(2) OF THE ACT ON 20.08.2010. THE NOTICES ISSUED BY ITO , WARD - 3(1), MATHURA UNDER SECTION 142(1) OF THE ACT DATED 01.08.2010 WAS ALSO DULY COMPLIED BY THE ASSESSEE BY FILING NECESSARY DETAILS. HOWEVER , SUBSEQUENTLY ON 22.10.2010 THE ITO , WARD - 3( 1) TRANSFERRED TH IS CASE TO ACIT , CIRCLE 3(1) FOR PASSING ORDER UNDER SECTION 143(3) OF THE ACT . T HEREAFTER THE ASSESSMENT PROCEEDINGS WERE TAKEN BY ACIT , CIRCLE 3(1) , MATHURA WHO PASSED THE ASSESSMENT ORDER DATED 29.12.2010 UNDER SECTION 14 3(3) OF THE AC T AT A TOTAL INCOME OF RS.54,37,900/ - , A FTER MAKING THE FOLLOWING ADDITION S : - 1 . ADDITION ON ACCOUNT OF IMPOUNDED DOCUMENT ANNEXURE A - 2 (PAGE NO.89) FOUND DURING SURVEY IN WHICH ENTRIES FOR RECEIPT OF MONEY FROM DIFFERENT PERSONS IN CONNECTION WITH A B USINESS OF TRAVEL AGENCY RELATING TO BOOKING OF TICKET AND HOTEL WAS RECORDED, HELD BY THE A O AS UNACCOUNTED INVESTMENT MAD E BY THE ASSESSEE (APPELLANT) . RS.22,29,492/ - ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 5 2. ADDITION ON ACCOUNT OF IMPOUNDED DOCUMENT ANNEXURE A - 2 (PAGE NO.60 TO 66) HELD TO BE UNACCOUNTED SALE OF THE ASSESSEE (APPELLANT) ON THE BASIS OF WHICH UNDISCLOSED PROFIT EARNED BY THE ASSESSEE (APPELLANT) AND UNDISCLOSED INVESTMENT MADE IN SUCH UNACCOUNTED SALE IS COMPUTED. RS.14,38,000/ - 3. ADDITION ON ACCOUNT OF IMPOUNDED DOCUMENT - A NNEXURE A - 1 (PAGE NO.4) ON THE BASIS OF WHICH UNDISCLOSED COMMISSION INCOME ON LAND TRANSACTION IS COMPUTED. RS.78,600/ - 5 . IT APPEARS FROM THE RECORDS THAT THE ACIT COMPLETED THE ASSESSMENT WITHOUT ISSUING ANY FURTHER NOTICE UNDER SECTION 143(2) OF THE ACT AND PURELY BASED ON INFORMATION BROUGHT ON RECORD BY HIS PREDECESSOR NAMELY ITO , WARD 3(1), MATHURA. BEING AGGRIEVED BY THE ASSESSMENT O R DER , APPEAL WAS FILED BEFORE THE CIT(A) - I AND THE CIT(A) - I AGRA VIDE HI S ORDER DATED 30.03.2012 PARTLY ALLOWED THE APPEAL. 6 . BEING AGGRIEVED , THE PRESENT APPEAL WAS FILED BEFORE US BY THE APPELLANT. BEFORE US THE APPELLANT HAD RAISED A PRELIMINARY ISSUE CHALLENGING THAT THE ASSESSMENT ORDER FRAMED IS NOT VALID IN LAW IN AS MUCH A S THE ASSESSMENT ORDER WAS PAS SED BY THE ACIT , CIRCLE - 3(1) , MATHURA WITHOUT ISSUING ANY NOTICE UNDER SECTION 143(2) OF THE ACT. SINCE THIS ISSUE GOES TO THE ROOT OF THE MA T TER , I.E. JURISDICTIONAL ISSUE, WE SHALL FIRST NOW DEAL WITH THIS GROUND OF APPEAL. IT WAS ARGUED BY THE LD . A UT HORISED REPRESENTATIVE OF THE APPELLANT THAT THE RETURN OF INCOME WAS FILED BY THE APPELLANT WITH ITO , WARD - 3(1), MATHURA AND IT WAS ONLY HE WHO SHOULD ISSUE NOTICE UNDER SECTION 143(2) AND AS WELL AS NOTICE UNDER SECTION 142(1) CALLING FOR CERTAIN ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 6 INFORMA TION AND THE ISSUES WHICH HAVE BEARING ON THE ASSESSMENT. THE ASSESSEE HAD DULY COMPLIED WITH THOSE NOTICES BY FILING RECORDS AND INFORMATION AS DESIRED BY THE ITO, WARD 3(1), MATHURA. SUBSEQUENTLY , JURISDICTION OF THE CA S E W AS TRANSFERRED TO THE ACIT, CIRCLE - 3(1), MATHURA. THE ACIT, CIRCLE 3(1) COMPLETED THE ASSESSMENT UNDER SECTION 143(3) VIDE ORDER DATED 29.12.2010 WITHOUT ISSUING ANY FRESH NOTICE AND BASED ON INFORMATION ALREADY AVAILABLE ON RECORD. THESE ARE THE UNDISPUTED FACTS WITHOUT GOING INT O THE ISSUE OF WHETHER ACIT , CI R CLE - 3(1) HAD VALID JURISDICTION OR NO T . IN OUR CONSIDERED OPINION , THE ORDER OF ASSESSMENT PASSED BY THE ACIT , CIRCLE - 3(1) , MATHURA IS NOT VALID IN LAW IN AS MUCH AS HE HAS NOT HEARD THE ASSESSEE NOR CONDUCTED THE ASSESSMEN T PROCEEDINGS HIMSELF. IT IS TRITE LAW THAT O FFICER WHO HEARD THE CASE SHOULD ALONE PASS THE ASSESSMENT ORDER, OTHERWISE , IT OFFENDS THE PRINCIPLE OF NATURAL JUSTICE. 7 . THIS DIVIDED RESPONSIBILITY IS DISRUCTIVE OF THE CONCEPT OF JUDICIAL HEARING. SUC H A PROCEDURE DEFEATS THE OBJECT OF PERSONAL HEARING. PERSONAL HEARING ENABLES THE AUTHORITY CONCERNED TO WATCH THE DEMEANOUR OF THE WITNESS AND CLEAR - UP HIS DOUBTS DURING THE COURSE OF THE ARGUMENTS, AND THE PARTY - APPEARING TO PERSUADE THE AUTHORITY BY R EASONED ARGUMENT TO ACCEPT HIS POINT OF VIEW. IF ONE PERSON HEARS AND ANOTHER DECIDES, THEN PERSONAL HEARING BECOMES AN EMPTY FORMALITY. WE , THEREFORE , HOLD THAT THE SAID PROCEDURE FOLLOWED IN THIS CASE ALSO OFFENDS ANOTHER BASIC PRINCIPLE OF JUDICIAL PR OCEDURE. ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 7 8 . THE ASSESSMENT ORDER FRAMED IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE IS NULL AND VOID , NOT VALID IN LAW AND , THEREFORE , WE QUASH THE ASSESSMENT ORDER PASSED BY THE ACIT, CIRCLE 3(1), MATHURA DATED 29.12 .2010 . 9 . IT IS NOT NECESSARY TO A DJUDICATE OTHER GROUNDS OF APPEAL SINCE WE HAVE QUASHED THE VERY ASSESSMENT ORDER ITSELF. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. 11. SINCE WE HAVE QUASHED THE ASSESSMENT PROCEEDINGS IN ASSESSEE S APPEAL NO.440/AGRA/2012, THE GROU NDS RAISED BY THE REVENUE IN IT S APPEAL ARE DISMISSED. THEREFORE, APPEAL FILED BY THE REVENUE IS DISMISSED. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 1 2.08.2015 ) SD/ - SD/ - ( G.C. GUPTA ) ( INTURI RAMA RAO ) VICE PRESIDENT ACC OUNTANT MEMBER DATE: 1 2 TH AUGUST, 201 5 ITA NO.440 & 466/AGRA/2012 A.Y. 2008 - 09 8 PBN/* COPY OF THE ORDER FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R ., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA