ITO 23(1)(4), MUMBAI V. RITA ANAND CHAUHAN, MUMBAI

ITA 5084/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59784 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 142(1); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, D, MUMBAI BEFORE SHRI D.K.AGARWAL (JM) AND SHRI T.R.SOOD(AM) ITA NO.5084/MUM/2010 (ASSESSMENT YEAR: 2005-06) INCOME TAX OFFICER 23(1)(4), C-10, ROOM NO.105, 1ST FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA- KURLA- COMPLEX, BANDRA (E), MUMBAI 400051. SMT.RITA ANAND CHAUHAN, GAMA HOUSE, GAMDEVI ROAD, BHANDUP (W), MUMBAI-400078 PAN:AABPC8971D APPELLANT V/S RESPONDENT DATE OF HEARING : 18.1.2012 DATE OF PRONOUNCEMENT : 20.1.2012 APPELLANT BY : SHRI C.G.K.NAIR RESPONDENT BY : NONE O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 18.3.2010 PASSED BY THE LD . CIT(A) FOR THE ASSESSMENT YEAR 2005-06. 2. IN THIS CASE, AT THE TIME OF HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE. THEREFORE , IT WAS DECIDED TO DISPOSE OF THE APPEAL EX-PARTE, QU A ITA NO.5084/MUM/2010 (ASSESSMENT YEAR: 2005-06) 2 THE ASSESSEE, ON MERITS AFTER HEARING THE LEARNED D.R. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL DERIVES INCOME FROM THE BUSINESS, FILED RETURN DECLARING TOTAL INCOME AT RS.86,323/-. DESPITE VARIOUS OPPORTUNITIES PROVIDE D TO THE ASSESSEE BY ISSUING STATUTORY NOTICES U/S 143(2) AND 142(1) OF THE INCOME TAX ACT, 1961(THE ACT), THE ASSESSEE DID NOT APPEAR BEFORE THE AO AN D THEREFORE, THE AO DECIDED TO COMPLETE THE ASSESSME NT U/S 144 OF THE ACT ON THE BASIS OF MATERIAL AVAILAB LE ON RECORD. ON PERUSAL OF THE AIR INFORMATION, THE AO NOTED THAT THE ASSESSEE HAS MADE DEPOSITS IN FRANKL IN TEMPLETON MUTUAL FUND TO THE TUNE OF RS.13,00,000/ -. IN THE ABSENCE OF ANY COMPLIANCE BY THE ASSESSEE TO JUSTIFY THE SOURCE OF DEPOSITS RS.13,00,000/- THE AO TREATED THE SAID DEPOSITS AS UNEXPLAINED INVESTMENT WITHIN THE MEANING OF SECTION 69 OF THE ACT AND ACCORDINGLY, HE ADDED THE SAME TO TOTAL INCOME OF T HE ASSESSEE. 4. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE FILED NEW EVIDENCE TO PROVE THE SOURCE OF THE ITA NO.5084/MUM/2010 (ASSESSMENT YEAR: 2005-06) 3 INVESTMENT IN MUTUAL FUND AMOUNTING TO RS.13,00,000/-. THE LD. CIT(A) WITHOUT PROVIDING AN Y OPPORTUNITY TO THE AO FOR ADMISSION OF SUCH EVIDEN CE WHILE ADMITTING THE SAME, DELETED THE ADDITION MA DE BY THE AO. 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING EVIDENCE WITHOUT AFFORDING THE AO AN OPPORTUNITY OF VERIFICATION OF THE ADDITIONAL EVIDENCES WHICH WERE NOT PRESENTED AT THE TIME OF ASSESSMENT PROCEEDINGS. THE DECISION OF THE CIT(A) TO ADMIT FRESH EVIDENCE DURING THE COURSE OF THE APPELLATE PROCEEDINGS IS NOT IN ACCORDANCE WITH THE PROVISIONS OF RULES, 46A OF THE INCOME TAX RULES, 1962. 6. AT THE TIME OF HEARING, THE LEARNED DR SUBMITS THAT SINCE THE LD. CIT(A) WITHOUT PROVIDING ANY OPPORTUNITY OF BEING HEARD TO THE AO HAS ADMITTED THE ADDITIONAL EVIDENCE, THEREFORE, IN THE INTEREST S OF JUSTICE, THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO. 7. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. ITA NO.5084/MUM/2010 (ASSESSMENT YEAR: 2005-06) 4 WE FIND THAT THERE IS NO DISPUTE THAT VARIOUS OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE AND T HE ASSESSEE MADE NO COMPLIANCE BEFORE THE AO. WE FURTHER FIND THAT IT IS ALSO NOT IN DISPUTE THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PROVE THE SOURCE OF INVESTMENT IN FRANKLIN TEMPLETON MUTUAL FUND AMOUNTING TO RS.13,00,000/-. HOWEVER, IN THE ABSENCE OF ANY COMPLIANCE, THE AO ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT WITHIN THE MEANING OF SECTION 69 OF THE ACT. WE FURTHER FIND THAT BEFORE THE LD. CIT(A), THE ASSES SEE HAS FILED ADDITIONAL EVIDENCE TO PROVE THE SOURCE OF INVESTMENT OF RS.13,00,000/- AS DISCUSSED BY THE L D. CIT(A) IN PARAGRAPH 3 OF HIS ORDER. WE FURTHER FIN D THAT THE LD. CIT(A) WITHOUT PROVIDING ANY OPPORTUN ITY TO THE AO AS PROVIDED UNDER RULE 46A OF THE INCOME TAX RULE, 1962 HAS ADMITTED THE SAID ADDITIONAL EVIDENCE AND DELETED THE ADDITION MADE BY THE AO. SINCE, THERE IS VIOLATION OF RULE 46A OF THE RULES IN ADMITTING THE NEW EVIDENCE, THEREFORE, IN THE INTERESTS OF JUSTICE, WE CONSIDER IT FAIR AND REASO NABLE THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE AO ITA NO.5084/MUM/2010 (ASSESSMENT YEAR: 2005-06) 5 AND ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY T HE LD. CIT(A) AND SEND BACK THE MATER TO THE FILE OF T HE AO TO DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDING THE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, PARTLY ALLOWED FOR STATIST ICAL PURPOSE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20TH JAN., 2012. SD SD (T.R.SOOD) (D.K.AGA RWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, 20TH JANUARY, 2012 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.5084/MUM/2010 (ASSESSMENT YEAR: 2005-06) 6