The DCIT, Central Circle-1(1), Ahmedabad V. Nitin Vadilal Patel, Ahmedabad

ITA 491/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50804 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-10-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 13-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: Additional evidence; Set aside
• Section: 153A; 68; 15

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , , , , !' !' !' !', , , , #$ #$ #$ #$ % % % %. .. .& && & . .. .' ' ' ', , , , ( ( ( ( & ' & ' & ' & ' BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND T.K. SHARMA , JUDICIAL MEMBER) ITA NO.491 TO 496/AHD/2009 [ASSTT.YEAR : 2000-2001 TO 2005-2006] DCIT, CENTRAL CIRCLE-1(1) AHMEDABAD. /VS. NITIN VADILAL PATEL PROP: PADMAVATI CORPN. RICE MILLS JETALPUR, TAL: DASCROI DIST: AHMEDABAD. PAN ACOPP 7665 A ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI SAMIR TEKRIWAL 12 . / &/ ASSESSEE BY : SHRI P.M. MEHTA 34 . 25/ DATE OF HEARING : 12 TH OCTOBER, 2011 678 . 25/ DATE OF PRONOUNCEMENT : 12 TH OCTOBER, 2011 &' / O R D E R PER BENCH : THESE ARE SIX APPEALS BY THE REVENUES APPEAL AGAIN ST ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, AH MEDABAD ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 15 3C R.W.S. 153A R.W.S. 144 OF THE INCOME TAX ACT, 1961. 2. IN ALL THESE APPEALS GROUNDS ARE COMMON, THEREFO RE, FOR THE SAKE OF CONVENIENCE WE HEREINBELOW REPRODUCE THE GROUNDS OF APPEAL FOR A.Y.2000- 2001 AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE ADDITION OF RS.72,000/- MADE ON ACCOUNT OF UNEX PLAINED HOUSEHOLD EXPENDITURE, WITHOUT CONSIDERING THE FACT THAT NO D ETAIL REGARDING HOUSEHOLD EXPENDITURE WAS FILED BY THE ASSESSEE DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS AND DETAILS FILED BEFORE THE LD.CIT(A) HAS NOT BEEN EXAMINED BY THE ASSESSING OFFICER BEING FRESH EVIDENCES. ITA NO.491 TO 496/AHD/2009 -2- 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.3,34,880/- MADE ON ACCOUNT OF UNEXPLAINED CAS H CREDITS, WITHOUT CONSIDERING THE FACT THAT ASSESSEE FAILED TO PROVE THE GENUINENESS AS PER SECTION 68 OF THE I.T.ACT. THE TRADE CREDITS ARE AL SO TO BE TREATED AS INCOME IF THEY ARE NOT EXPLAINED SATISFACTORILY BY THE ASSESSEE AS HELD BY THE HON'BLE ITAT. AHMEDABAD IN THE CASE OF S.R.E NTERPRISES, 77 TTJ 69(AHD.) 3) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.87,322/- MADE BY APPLYING 5% NET PROFIT RATE ON THE SALES DISCLOSED AFTER REJECTING THE BOOK RESULTS, WITHOUT CONSIDERING THE FACT THAT BOOK RESULTS WERE REJECTED AS THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS AND MERELY ACCEPTING THE SALES DO ES NOT TANTAMOUNT TO ACCEPTANCE OF BOOK RESULTS. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY THE LEARNED DR THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE/EXPLANATION B EFORE THE AO IN RESPECT OF ANY OF THREE GROUNDS IN APPEAL BEFORE THE ITAT. HE POINTED OUT THAT ULTIMATELY, THE AO WAS REQUIRED TO COMPLETE THE ASSESSMENT UNDE R SECTION 144 OF THE ACT. THAT THE CIT(A) ADMITTED FRESH EVIDENCE/EXPLANATION WITHOUT ALLOWING ANY OPPORTUNITY TO THE AO TO EXAMINE SUCH EVIDENCE. HE SIMPLY ACCEPTED THE EVIDENCES AND ALLOWED THE APPEALS OF THE ASSESSEE. HE ALSO POINTED OUT THAT IN PAPER BOOK THE ASSESSEE HAS MENTIONED ITEM NOS.5 AN D 6 AS HAVING BEEN FURNISHED BEFORE THE AO. THE DATES OF THESE LETTER S ARE 7-12-2007 AND 19-12- 2007 WHILE THE ASSESSMENT ITSELF WAS COMPLETED ON 3 0-11-2007. THEREFORE, OBVIOUSLY, THE LETTERS WHICH ARE DATED SUBSEQUENT T O THE DATE OF ASSESSMENT ORDER, COULD NOT HAVE BEEN PRODUCED BEFORE THE AO. HE THEREFORE SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE REVERSED AND THAT OF THE AO MAY BE RESTORED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED T HAT ITEM NO.5 AND 6 POINTED OUT BY THE LEARNED DR ARE LETTERS WRITTEN B Y THE ASSESSEE TO THE AO AND THEREFORE THE ASSESSEE HAS CERTIFIED THAT THESE DET AILS ARE AVAILABLE ON THE FILE OF THE AO. THE CERTIFICATE IS GIVEN ON THE DATE ON WH ICH THE PAPER BOOK IS PREPARED. HE ALSO STATED THAT THESE LETTERS WERE D ULY AVAILABLE TO THE AO DURING ITA NO.491 TO 496/AHD/2009 -3- THE COURSE OF HEARING OF THE APPEALS BEFORE THE CIT (A) AND THE CIT(A) HAS DULY ALLOWED THE OPPORTUNITY OF HEARING TO THE AO AND TH EREFORE, IF THE AO HAS ANY OBJECTION WITH REGARD TO THE CORRECTNESS OF THE DET AILS/EXPLANATION, HE COULD HAVE REPRESENTED THE ISSUE BEFORE THE CIT(A). HE A LSO SUBMITTED THAT THE CIT(A) HAS CONSIDERED THE EXPLANATION OF THE ASSESS EE IN DETAIL AND HAS PASSED A SPEAKING ORDER GIVING ADEQUATE REASONS FOR DELETI NG THE ADDITION, THEREFORE HIS ORDER SHOULD BE UPHELD. HE HOWEVER ALTERNATIVELY S UBMITTED THAT IF THERE IS ANY TECHNICAL VIOLATION WITH REGARD TO THE SUBMISSION O F ANY FRESH EVIDENCE BEFORE THE CIT(A), THEN THE MATTER MAY BE SET ASIDE TO THE FILE OF THE AO SO THAT HE CAN RE-EXAMINE ALL THE EVIDENCES AFRESH. 5. IN THE REJOINDER, THE LEARNED DR ALSO FAIRLY AGR EED TO THE ALTERNATIVE CONTENTION OF THE LEARNED COUNSEL THAT THE MATTER M AY BE SET ASIDE TO THE FILE OF THE AO. HE HAS STATED THAT EVIDENCE IS TO BE PRODU CED DURING THE ASSESSMENT PROCEEDINGS BEFORE THE AO AND NOT SUBSEQUENTLY. SI NCE IN THIS CASE, THE EVIDENCES PRODUCED BY THE ASSESSEE WERE SUBSEQUENT TO THE ASSESSMENT, IN ALL FAIRNESS THE MATTER SHOULD GO BACK TO THE FILE OF T HE AO FOR FRESH EXAMINATION. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. FROM THE A RGUMENTS OF BOTH THE SIDES, IT IS EVIDENT THAT AT THE END BOTH THE PARTIES AGREED THAT THE MATTER IS REQUIRED TO BE SENT BACK TO THE FILE OF THE AO. WE ALSO FIND THAT BEFORE THE AO THE ASSESSEE HAS NOT PRODUCED THE RELEVANT EVIDENCES DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THE AO COMPLETED THE ASSESSMENT EX- PARTE UNDER SECTION 144. IF THE ASSESSEE PRODUCED THOSE EVIDENCE IN SOME OTHER PROCEEDINGS AFTER THE COMPLETION OF THE ASSESSMENT, THE SAME WOULD BE AN ADDITIONAL EVIDENCE, BEFORE THE CIT(A) AND PROCEDURE FOR ADMISSION OF AD DITIONAL EVIDENCE UNDER RULE 46A WOULD BE APPLICABLE. IN VIEW OF THE ABOVE , WE ARE OF THE OPINION THAT THE CIT(A) BEFORE ADMITTING THOSE ADDITIONAL EVIDEN CE OUGHT TO HAVE ALLOWED OPPORTUNITY TO THE AO TO EXAMINE SUCH EVIDENCE AS P ROVIDED UNDER CLAUSE (3) OF RULE 46A, WHICH READS AS UNDER: ITA NO.491 TO 496/AHD/2009 -4- 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PR ODUCE BEFORE THE APPELLATE ASSISTANT COMMISSIONER ANY EVIDENCE, WHET HER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HI M DURING THE COURSE OF PROCEEDINGS BEFORE THE INCOME-TAX OFFICER , EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY:-- XXX (3) THE APPELLATE ASSISTANT COMMISSIONER SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE INCOME-TAX OFFICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY-- (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROS S-EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WIT NESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. ADMITTEDLY, IN THIS CASE, THE CIT(A) DID NOT FOLLOW THE PROCEDURE OF ADMISSION OF ADDITIONAL EVIDENCE AS PRESCRIBED UNDER RULE 46A . THEREFORE, IN OUR OPINION, IT WOULD BE IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER BACK TO TH E FILE OF THE AO. WE ORDER ACCORDINGLY AND DIRECT THE AO TO ALLOW ADEQUATE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO PRODU CE ALL THE EVIDENCES AND EXPLANATIONS BEFORE THE AO, THEREAFTER, HE WILL RE- ADJUDICATE THE ISSUE AFRESH IN ACCORDANCE WITH LAW IN ALL THE YEARS UNDER APPEALS. 7. IN THE RESULT, THE REVENUES APPEALS ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( % %% %. .. .& && & . .. .' ' ' ' /T.K. SHARMA ) ( ( ( ( /JUDICIAL MEMBER ( . .. . . .. . G.D. AGARWAL) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT