M/S SUNDERDEEP CONSTRUCTIONS PVT. LTD., Indore V. THE ACIT-CIRCLE-1(2), Indore

ITA 505/IND/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7146 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 12-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Assessee Lawyers: GIRISH AGRAWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

ITA NO. 505 OF 2018 SUNDERDEEP CONSTRUCTION P. LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 505/IND/2016 A.Y. 2011-12 SUNDERDEEP CONSTRUCTION P. LTD., INDORE PAN AAACU 2189 B :: APPELLANT VS ACIT-1(2), INDORE :: RESPONDENT ASSESSEE BY SHRI GIRISH AGRAWAL, ADV. AND SHRI VIJAY BANSAL, CA RESPONDENT BY SHRI RAJEEB JAIN, SR. DR DATE OF HEARING 12.09.2019 DATE OF PRONOUNCEMENT 31.10.2019 O R D E R PER SHRI KUL BHARAT, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT(A)-2, INDORE, DATED 29.1.2016 ON THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN DISMISSING THE APPEAL BY ARRIVING AT A PERVERSE FINDING ON THE ISSUE OF BREACH OF PRINCIPLES OF NATURAL JUSTICE ON THE PART OF THE ASSESSING OFFICER BY BRUSHING ASIDE THE SAME AS A T ECHNICAL AND PROCEDURAL FLAW. THE FINDING OF THE LD. CIT(A) IS IN TEETH OF THE ESTABLISHED PRINCIPLES OF FAIR PLAY AND NATURAL JUSTICE BEING FULLY APPLICABLE TO ASSESSMENT PROCEEDING AND THUS THE ORDER OF THE LD. CIT(A) IS VITIATED IN LAW AND ON FACTS. 2. THAT THE ASSESSMENT ORDER OF THE ASSESSING OFFIC ER IS ALSO VITIATED ON ACCOUNT OF BREACH OF PRINCIPLE OF NATUR AL JUSTICE. ITA NO. 505 OF 2018 SUNDERDEEP CONSTRUCTION P. LTD. 2 3. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN GLOSSING OVER THE FAILURE OF THE ASSESSING OFFICER TO PROVIDE AN OPPORTUNITY OF CROSS-EXAMINATION TO THE ASSESSEE THOSE TWO PERSONS WHO WERE EXAMINED BY THE ASSESSING OFFICER BEHIND THE B ACK OF THE ASSESSEE. SUCH FAILURE OF THE ASSESSING OFFICER VITIATES THE ENTIRE EVIDENCE RECORDED BEHIND THE BACK OF THE ASS ESSEE AND THE ADDITION MADE ON THE BASIS OF SUCH STATEMENTS D ESERVES TO BE QUASHED. 4. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION FILED U/R 46A FOR ADMISSION OF AFFIDAVI T OF SATISH PATIDAR WHICH WAS MATERIAL TO THE ISSUE BEFORE THE LD. CIT(A) AND THE APPELLANT HAD DULY DEMONSTRATED IN ITS APPL ICATION U/R 46A AS TO THE MAINTAINABILITY OF THE SAID DOCUMENT. 5. THAT EVEN ON MERITS THE ADDITION OF RS.55,30,000 /- SUSTAINED BY THE LD. CIT(A) DESERVES TO BE DELETED AS THE PRO VISIONS OF SECTION 68 WERE NOT ATTRACTED TO THE SAID AMOUNTS A S THESE WERE ADVANCES MADE BY THE ASSESSEE IN EARLIER YEARS BY ACCOUNT PAYEE CHEQUES WHICH WERE SIMPLY RECEIVED BA CK AND CONSEQUENTLY THESE CANNOT BE TREATED AS CASH CREDIT S AND SECTION 68 WILL HAVE NO APPLICATION. 2. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE AUTHORITIES DID NOT FOLLOW THE PRINCIPLES O F NATURAL JUSTICE AND FAIR PLAY AS THE ASSESSING OFFICER FAILED TO PROVIDE AN OPPOR TUNITY OF CROSS-EXAMINATION TO THE ASSESSEE THOSE TWO PERSONS WHO WERE EXAMINED BY THE ASSESSING OFFICER BEHIND THE BACK OF THE ASSESSEE. SUCH FAILU RE OF THE ASSESSING OFFICER VITIATES THE ENTIRE EVIDENCE RECORDED BEHIND THE BA CK OF THE ASSESSEE AND THE ADDITION MADE ON THE BASIS OF SUCH STATEMENTS DESER VES TO BE QUASHED AND THE LD. CIT(A) ALSO MADE ERROR IN CONFIRMING THE AC TION OF THE ASSESSING OFFICER AND IN REJECTING THE APPLICATION FILED U/R 46A FOR ADMISSION OF AFFIDAVIT OF SATISH PATIDAR WHICH WAS MATERIAL TO THE ISSUE BEFORE THE LD. CIT(A) AND THE ASSESSEE HAD DULY DEMONSTRATED IN ITS APPLICATION U /R 46A AS TO THE MAINTAINABILITY OF THE SAID DOCUMENT. FURTHER, EVEN ON MERITS, THE ADDITION ITA NO. 505 OF 2018 SUNDERDEEP CONSTRUCTION P. LTD. 3 DESERVES TO BE DELETED AS THE PROVISIONS OF SECTION 68 WERE NOT ATTRACTED TO THE RELEVANT AMOUNTS AS THESE WERE ADVANCES MADE BY THE ASSESSEE IN EARLIER YEARS BY ACCOUNT PAYEE CHEQUES WHICH WERE S IMPLY RECEIVED BACK AND CONSEQUENTLY THESE CANNOT BE TREATED AS CASH CREDIT S U/S 68 OF THE I.T. ACT. THUS, LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT N O PROPER AND MEANINGFUL OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESSE E BY THE ASSESSING OFFICER AS WELL AS LD. CIT(A). ON THE OTHER HAND, LD. SR. D R RELIED ON THE ORDER OF THE LD. REVENUE AUTHORITIES. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF LOWER AUTHORITIES. LOOKING TO THE FACTS AND RIVAL SUBMISS IONS, WE HAD RECORDED THE STATEMENT OF SHRI SATISH PATIDAR IN THE PRESENCE OF LEARNED COUNSEL FOR THE ASSESSEE AND LD. SR. DR SHRI AMIT KUMAR SONI ON 15. 7.2019, COPY OF WHICH WAS SUPPLIED TO CONCERNED PARTIES. BEFORE US, THE S UBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE IN RESPECT OF FOLLOWING PR INCIPLES OF NATURAL JUSTICE AND REJECTION OF ADDITIONAL EVIDENCE UNDER RULE 46A WAS NOT CONTROVERTED BY THE REVENUE BY BRINGING ANY COGENT MATERIAL ON RECO RD. THE ASSESSEE HAS ALSO FILED PAPER BOOKS AND WRITTEN SUBMISSION/CASE- LAWS. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE STATEME NT RECORDED BY US IN THE PRESENCE OF BOTH THE PARTIES, WE ARE OF THE VIEW TH AT IN ORDER TO PROVIDE NATURAL JUSTICE, THE CROSS-EXAMINATION SHOULD HAVE BEEN ALL OWED BY THE ASSESSING OFFICER AND LD. CIT(A) SHOULD ALSO HAVE ADMITTED AP PLICATION FOR ADDITIONAL EVIDENCE, THEREFORE, THE MATTER REQUIRES RECONSIDER ATION AT THE LEVEL OF THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF REVEN UE AUTHORITIES ARE SET ITA NO. 505 OF 2018 SUNDERDEEP CONSTRUCTION P. LTD. 4 ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE O F THE ASSESSING OFFICER WITH DIRECTION THAT THE ASSESSING OFFICER WOULD DECIDE T HE MATTER DE NOVO BY GIVING OPPORTUNITY OF THE CROSS-EXAMINATION AFTER AFFORDIN G DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER LAW AND THE ASSESSEE I S ALSO DIRECTED TO COOPERATE/APPEAR BEFORE ASSESSING OFFICER IN THIS R EGARD AND FILE ALL THE RELEVANT DOCUMENTS, IF ANY, IN SUPPORT OF THE CLAIM . 4. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES ONLY. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.10.201 9. SD/- ( MANISH BORAD) ACCOUNTANT MEMBER SD/- (KUL BHARAT) JUDICIAL MEMBER DATED : 31.10.2019 ! VYAS ! COPY TO: APPELLANT/RESPONDENT/PR.CIT(A)/PR.CIT/DR, INDORE