SHRI NITIN KATARIA, Indore V. The ITO 5(1), Indore

ITA 456/IND/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0441 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: NITIN KATARIA
• Keywords: Principle of natural justice; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 456/IND/2014 A.Y. : 2008-09 SHRI NITIN KATARIA, ITO, 1086, KHATIWALA TANK, VS 5(1), INDORE. INDORE APPELLANT RESPONDENT PAN NO. : AJBPK3713E APPELLANT BY : SHRI NITIN KATARIA (ASSESSEE) RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 02 . 0 7 .201 5 DATE OF PRONOUNCEMENT : 02 . 0 7 .201 5 -: 2: - 2 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 28.02.2014 FOR THE ASS ESSMENT YEAR 2008-09. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THAT THE LD. CIT(A) ERRED IN LAW AS WELL AS IN FACT UPHOLDING THE ASSESSMENT ORDER. 2. THAT THE LD. CIT(A) ERRED IN FACT IN UPHOLDING THE ADDITION OF RS. 1,48,585/- ON ACCOUNT OF PEAK CREDITS, WHICH IS NOT REQUIRED IF DUE WEIGHTAGE IS GIVEN TO THE NATURE OF BUSINESS OF THE ASSESSEE I.E . CLOTH BROKERAGE AND INVOLVEMENT OF OWN CAPITAL OF THE APPELLANT. 3. THAT THE LD. CIT(A) ERRED IN FACT IN UPHOLDING THE ADDITION OF RS. 1,37,672/- AS NET PROFIT U/S 44AF O N THE AMOUNT DEPOSITED IN BANK AT RS. 27,59,426/- WHILE THE AMOUNT DEPOSITED IN BANK ARE MOSTLY FROM THE CUSTOMER OF BROKERAGE BUSINESS. -: 3: - 3 4. THAT THE LD. CIT(A) FAILED TO APPLY HIS MIND TO THE DISCREPANCIES IN THE ASSESSMENT ORDER POINTED OUT BY THE APPELLANT IN HIS SUBMISSION AND ALSO FAILED TO APPRECIATE DOCUMENTS SUBMITTED BEFORE HIM WHICH WERE ALSO SUBMITTED BEFORE THE AO. 5. THE CIT(A) ERRED IN IGNORING THE FACT THAT APPELLAN T HIMSELF SEGREGATED HIS TURNOVER AND NET PROFIT OFFERED TO TAX U/S 44AF ON HIS TRADING ACTIVITY AND BROKERAGE INCOME SHOWN SEPARATELY IN PROFIT AND LOSS ACCOUNT. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CAS E WAS FIXED FOR HEARING ON NUMBER OF OCCASIONS WHEN T HE ASSESSEE OR HIS AUTHORIZED REPRESENTATIVE DID NOT A PPEAR BEFORE THE CIT(A). A WRITTEN SUBMISSION WAS RECEIVE D BY THE LD. CIT(A), ON THE BASIS OF WHICH THE CASE WAS AGAIN FI XED FOR HEARING ON 24.02.2014, BUT NO COMPLIANCE WAS MADE. THE LD. CIT(A) WENT ON TO DECIDE THE APPEAL EX-PARTE AND DI SMISSED THE APPEAL OF THE ASSESSEE. -: 4: - 4 4. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE OPPORT UNITY OF HEARING WAS NOT GIVEN TO THE ASSESSEE. THE LD. AUTH ORIZED REPRESENTATIVE FURTHER CONTENDED THAT THE AO HAS NO T APPRECIATED THE DOCUMENTS SUBMITTED BEFORE HIM. TH EREFORE, LD. AUTHORIZED REPRESENTATIVE PRAYED THAT ONE OPPOR TUNITY MAY BE GIVEN AND THE APPEAL MAY BE RESTORED TO THE ASSESSING OFFICER. 5. THE LD. SENIOR D.R. DID NOT OBJECT TO IT. 6. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. I FIND THAT THE LD. CIT(A) AS WELL AS LD. AO HAVE NOT CONSIDERED THE PAPERS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND AO. THE LD. CIT(A) HAS SIMPLY DISMISSED THE APPEAL BY SERVING NOTICES AND NON-COMPLIANCE OF THEM BY THE ASSESSEE. THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRESSION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN OPPORTUNITY TO DEFEND H IMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE , RIGHT TO -: 5: - 5 REBUT ADVERSE EVIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGAL REPRESENTATION, DISCLOSURE OF EVIDENCE TO PAR TY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. I FIND THAT THE RIGHT OF HEARIN G IS DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI VS. UNION OF INDIA, WHEREIN HON'BLE SUPREME COURT H AS HELD THAT RULE OF FAIR HEARING IS NECESSARY BEFORE PASSI NG ANY ORDER. I FIND THAT IT IS PRE-DECISION HEARING STANDARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. I FIND THAT IN THIS INSTANT CASE, THE ASSESSEE WAS NOT GIVEN PROPER HEARING. THEREFORE, I AM OF THE VIEW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPOR TUNITY OF HEARING AND TO REPRESENT HIS CASE. THEREFORE, I ALL OW THIS APPEAL. THE ASSESSEE IS DIRECTED TO REMAIN PRESENT BEFORE THE LD. CIT(A) WITHIN 2 MONTHS AFTER THE RECEIPT OF THI S ORDER. THE LD. CIT(A) SHOULD DECIDE THE APPEAL AFTER GIVING DU E OPPORTUNITY OF HEARING TO THE ASSESSEE AS PER LAW. -: 6: - 6 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 2 ND JULY, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 2 ND JULY, 2015. CPU*