SMT. GEETA AGARWAL, Bhopal V. The ITO 2(2), Bhopal

ITA 472/IND/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4328 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: N D PATWA S
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SMT. GEETA AGARWAL 6 IBRAHIMPURA BHOPAL PAN:AAVPA8266B VS. ITO WARD 2(2), BHOPAL APPELLANT RESPONDENT APPELLANTS BY SHRI ASHISH GOYAL AND SHRI N D PATWA, ADVOCATES RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 16.08.2016 DATE OF PRONOUNCEMENT 16.08.2016 O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, BHOPAL [HER EINAFTER REFERRED TO AS THE CIT (A)] DATED 16.04.2014. THIS APPEAL PERTAINS TO ASSESSMENT YEAR 2008-09 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER U/S. 143(3) R.W. S. 147 DATED 08.12.2008 OF INCOME TAX ACT, 1961(HEREIN AFTER RE FERRED TO I.T.A. NO.472/IND/2014 ASSESSMENT YEAR: 2008-09 ITA NO.472/IND/2014/AY: 08-09 PAGE 2 OF 6 AS 'THE ACT) DATED OF ITO WARD 2(2) BHOPAL [HEREINA FTER REFERRED TO AS THE AO]. 2. THE GROUNDS NO. 1 OF APPEAL RELATES TO INITIATION O F REASSESSMENT BASED ON WRONG INFORMATION AND THEREFOR E INVALID. THE ADDITIONAL GROUND OF APPEAL IS AGAINST THE REASSESSMENT U/S.147/143(3), WHICH SAYS THAT THE REASSESSMENT IS INVALID, VOID-AB-INITO , BARRED BY LIMITATION, WITHOUT JURISDICTION AND THEREFORE LIABLE TO BE QUAS HED. AND GROUND NO. 2 TO 4 RELATES TO SUSTAINING ADDITION OF RS.18,40,490/- BY LD. CIT (A) HOLDING THAT SOURCE O F INVESTMENT IN IMMOVABLE PROPERTY WAS UNEXPLAINED, WI THOUT GRANTING PROPER OPPORTUNITY OF BEING HEARD, NOT J USTIFIED AND APPLIED MERE GUESS WORK WHICH WAS PURELY AD HOC AND OPPOSED TO THE FACTS OF THE CASE. 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL, AGED 75 YEARS OLD WIDOW HAS BEEN FI LING REGULAR RETURN OF INCOME AND IS ENGAGED IN THE BUSI NESS OF PAPPAD, BADI ETC. THE ASSESSEE FILED ORIGINAL RETUR N OF INCOME DECLARING TOTAL INCOME AT RS. 1, 52,200/-WHICH WAS PR OCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, AN AIR INFORM ATION WAS RECEIVED THAT THE ASSESSEE HAS PURCHASED AN IMMOVAB LE PROPERTY OF RS.35,07,000/- . THE AO ISSUED A QUERY LETTER TO EXPLAIN THE TRANSACTION OF PURCHASE OF IMMOVABLE PR OPERTY, BUT NO REPLY WAS RECEIVED, HENCE THE AO HAD REASON T O BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT ON ITA NO.472/IND/2014/AY: 08-09 PAGE 3 OF 6 ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROP ERTY. ACCORDINGLY, AFTER RECORDING REASONS, NOTICE U/S.14 8 ISSUED ON 16.04.2010. IT WAS EXPLAINED TO THE AO THAT INVESTM ENT WAS MADE AT RS. 18,40,490/- INCLUDING REGISTRATION CHAR GES AND NOT AT RS. 35,07,000/- AS MENTIONED BY THE AO. THE SOURCE OF INVESTMENT IS EXPLAINED RS. 9,59,715/- OUT OF CAPI TAL AS ON 31.03.2008, RS. 7,23,825/- BY WAY OF ADVANCE AGAINST SALE OF LAND AND RS. 84,574/- LOANS FROM 5 PARTIES. HOWEVE R, THE AO , NOTED THAT NO DETAILS WERE FURNISHED , HENCE, TREATE D SAME AS UNEXPLAINED. 4. BEING NOT SATISFIED, THE ASSESSEE FILED APPEAL BEFO RE LD. CIT (A), HOWEVER, COULD NOT SUCCEED, HENCE, FILED T HIS APPEAL BEFORE US. 5. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESS EE SUBMITTED THAT THE ADDITIONAL GROUND OF APPEAL BE A DMITTED AS IT IS BEING LEGAL ISSUE, GOES TO THE ROOT OF THE MA TTER AND NO FURTHER INQUIRY IS REQUIRED FOR DECIDING THE SAME AS ALL FACTS ARE ALREADY ON RECORD AND ISSUE ARISE OUT OF IMPUGN ED ORDER. THE LD. A.R. PLACED RELIANCE ON FOLLOWING DECISIONS NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383(SC ) CHINTA JAIN 18TTJ89(IND) , DY. CIT VS. TURQUOISE INVESTMEN T & FINANCE LTD. 154 TAXMAN 80 (MP), STEEL INGOTS PVT. LTD. 135 CTR 378 (MP), AHMEDABAD ELECTRICITY CO. LTD. 199 IT R 351 ITA NO.472/IND/2014/AY: 08-09 PAGE 4 OF 6 (BOM) (FB) , KANSAI NEROLAC PAINTS LTD. 364 ITR 632 (BOM). THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS PURCHA SED AGRICULTURE LAND FOR RS. 18,40,490/-. THE SOURCE OF INVESTMENT IS EXPLAINED RS. 9,59,715/- OUT OF CAPITAL AS ON 31 .03.2008, RS. 7,23,825/- BY WAY OF ADVANCE AGAINST SALE OF LAN D AND RS. 84,574/- LOANS FROM 5 PARTIES. HOWEVER, THE AO AND LD. CIT (A) CHOOSE NOT TO VERIFY THE TRANSACTIONS FROM THOS E PERSONS AND PARTIES. THUS, IT IS CONTENDED THAT PROPER OPPO RTUNITY OF TO EXPLAIN THE SOURCE OF INVESTMENT WAS NOT ALLOWED T O THE ASSESSEE. 6. THE LD. D. R. SUBMITTED THAT THE AO HAS NOT ALLOWED , PROPER OPPORTUNITY OF BEING HEARD, HE THEREFORE SUG GESTED THAT HE HAS NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE AO. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE ASSESSEE IS AN OLD WIDOW OF 75 YEARS OF AGE. SHE HAS BEEN FILING HER RETURN OF INCOME SINCE A.Y. 1994-95 AND HAS FILED RETURN OF INCOME UP TO A.Y.2008-09. SHE HAS SHOWN OPENING CAPITAL BALANCE AT RS. 9,59,715/- AT HER D ISPOSAL, ADVANCE AGAINST SALE OF LAND OF RS.7,23,825/- AND L OANS OF RS. ITA NO.472/IND/2014/AY: 08-09 PAGE 5 OF 6 84,575/- FOR INVESTMENT IN AGRICULTURE LAND. HOWEVE R, PERUSAL OF ASSESSMENT ORDER AND SUBMISSION OF THE ASSESSEE SHOWS THAT NOTICE FOR HEARING ON14.11.2011 WAS RECEIVED ON 11.11.2011, AND 12.11.2011 WAS SATURDAY AND 13.11.2 011 WAS SUNDAY, HENCE, THE ASSESSEE COULD NOT PREPARE TH E REPLY FOR 7 POINTS, AS TIME WAS SHORT. SIMILARLY, THE ASSE SSEE COULD NOT APPEAR FOR HEARING FIXED ON 23.11.2011 AND 6.12 .2011. THUS, NO PROPER OPPORTUNITY OF HEARING WAS ALLOWED. UNFORTUNATELY, THE LD. CIT (A) HAS ALSO NOT EXAMINE D THE EVIDENCES PRODUCED, DURING APPEAL, AND ASSESSMENT PROCEEDINGS AS NO REMAND REPORT WAS CALLED FOR. THE LD. CIT (A) HAS BASED HIS DECISION ON HUMAN PROBABILITIES WITHOU T ASCERTAINING FACTS. THEREFORE, IN THE INTEREST OF J USTICE AND FAIR PLAY, THE ENTIRE ISSUE IS RESTORED BACK TO THE FIL E OF AO WITH THE DIRECTION THAT THE AO SHALL VERIFY WHETHER THE S OURCE OF INVESTMENT SHOWN REGARDING AGRICULTURE LAND IS GENU INE AND SAME IS EXPLAINED OR NOT. WITH REGARD ADDITIONAL GR OUND OF APPEAL, WE FIND THAT THIS GROUND IS THOUGH ADMISSIB LE BEING LEGAL ONE. STILL, WE FIND THAT THIS GROUND WAS NOT T AKEN BEFORE THE AO OR LD. CIT (A), THEREFORE, THE ASSESSEE IS A T LIBERTY TO ITA NO.472/IND/2014/AY: 08-09 PAGE 6 OF 6 RAISE THIS GROUND BEFORE THE AO. ACCORDINGLY, WE RE STORE THE ASSESSMENT TO THE FILE OF THE AO FOR FRESH ADJUDICA TION TO BE MADE DE-NOVO ASSESSMENT WITH THE DIRECTION THAT THE ASSESSEE BE AFFORDED PROPER OPPORTUNITY TO PRESENT HIS CASE AS WELL AS THE ASSESSEE IS TO EXTEND ALL POSSIBLE COOPERATION IN THE DISPOSAL OF THE CASE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE, ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN OPEN COURT ON 16.08.2016 SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED: 16TH AUGUST 2016. OPM* COPY FORWARDED TO-THE ASSESSEE/AO/PCIT/CIT (A)/DR/G UARD FILE BY ORDER A.R. ITAT, INDORE