AVAN GIDWANI, MUMBAI V. ACIT CC 22, MUMBAI

ITA 5138/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4201 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.5138/MUM/2015 ( # % &% / ASSESSMENT YEAR: 2007-08) SMT. AVAN GIDWANI 92- B, EMBASSY APARTMENTS, 46, NEPEAN SEA ROAD, MALABAR HILL, MUMBAI 400036 / VS. ASSTT. COMM. OF INCOME TAX CENTRAL CIRCLE 22 ROOM NO.466, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AACPG4060C ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI PRAKASH JOTWANI DEPARTMENT BY: SHRI GANESH BARE / DATE OF HEARING: 07.01.2016 /DATE OF PRONOUNCEMENT: 06.04.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24.09.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-51, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LEA RNED CIT(A) IN NOT ADMITTING ADDITIONAL EVIDENCES PRODUCED BEFORE HIM AND ALSO IN ITA NO.5138/MUM/2015 ASSESSMENT YEAR: 2007-08 2 CONFIRMING THE ADDITION OF RS.10.06 CRORES MADE BY THE ASSESSING OFFICER. 3. THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE S UBMITTED THAT THE ASSESSING OFFICER HAS ASSESSED AN AMOUNT OF RS.10.0 6 CRORES ALLEGING THAT THE ASSESSEE IS THE BENEFICIAL OWNER, SETTLER AND BENEFICIARY OF A BANK ACCOUNT MAINTAINED WITH HSBC BANK, GENEVA ON T HE BASIS OF CERTAIN DOCUMENTS AVAILABLE WITH HIM(WHICH IS REFER RED TO AS BASE NOTE IN THE ORDER). THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE WAS NOT PROVIDED WITH THE INFORMATION THAT WAS AVAILABLE WI TH THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS, EVEN THOUGH IT WAS ONLY SHOWN TO THE ASSESSEE AT THE TIME OF RECORDING STAT EMENT. IN THE ABSENCE OF THE RELEVANT DETAILS, THE ASSESSEE COULD NOT EFF ECTIVELY CONTROVERT THE SAID DOCUMENTS. THE LD A.R SUBMITTED THAT THE ASSE SSING OFFICER, ON THE CONTRARY, HAS ALLEGED THAT THE ASSESSEE HAS NOT PROVIDED THE INFORMATION RELATING TO BANK ACCOUNT AND ACCORDINGL Y MADE THE IMPUGNED ADDITION. 4. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS R EQUIRED TO MOVE AN APPLICATION BEFORE HONBLE HIGH COURT OF BOMBAY FOR OBTAINING THE ALLEGED INCRIMINATING INFORMATION FROM THE ASSESSIN G OFFICER. THE SAID INCRIMINATING INFORMATION WAS PROVIDED TO THE ASSES SEE ONLY AFTER THE COMPLETION OF THE ASSESSMENT AND DURING THE PENDENC Y OF THE APPEAL WITH LD CIT(A). UPON RECEIPT OF THE SAME THE ASSESS EE HAS COLLECTED NECESSARY DETAILS FROM VARIOUS SOURCES. ACCORDINGL Y, THE ASSESSEE MOVED AN APPLICATION BEFORE LEARNED CIT(A) FOR ADMI TTING THE SAME AS ADDITIONAL EVIDENCE. THE LD CIT(A) ACCORDINGLY CAL LED FOR A REMAND ITA NO.5138/MUM/2015 ASSESSMENT YEAR: 2007-08 3 REPORT FROM THE ASSESSING OFFICER IN RESPECT OF THE PETITION FILED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCES. THE AO, HOWEVER, OBJECTED TO THE SAME AND ACCORDINGLY, ON THE BASIS OF REMAND REPORT GIVEN BY THE ASSESSING OFFICER, THE LEARNED CIT(A) HAS REFUSED TO ADMIT THE ADDITIONAL EVIDENCES. IN THIS CONNECTION HE HE LD THAT CONDITIONS PRESCRIBED IN RULE 46A OF THE INCOME TAX RULES HAS NOT BEEN SATISFIED BY THE ASSESSEE. THE LEARNED AR SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO GIVE NECESSARY EXPLANATIONS WITH R EGARD TO THE MATERIALS ON THE BASIS OF WHICH THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER, ONLY IF THE ADDITIONAL EVIDENCES ARE ADMIT TED. ACCORDINGLY THE LEARNED AR SUBMITTED THAT LEARNED CIT(A) WAS NOT JU STIFIED IN REFUSING TO ADMIT THE ADDITIONAL EVIDENCES. 5. THE LEARNED DR, ON THE CONTRARY, SUBMITTED THAT THE ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TA X RULES IS NOT AUTOMATIC AND IT IS THE DUTY OF THE ASSESSEE TO PRO PERLY MAKE OUT A REASONABLE CASE IN ORDER TO SHOW THAT THE CONDITION S PRESCRIBED UNDER RULE 46A OF THE INCOME TAX RULES HAVE BEEN SATISFIE D. THE LEARNED DR PLACED RELIANCE ON THE DECISIONS RENDERED BY THE HO NBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. RANJIT KUMAR CHOUDHARY 288 ITR 179 AND ALSO DECISION OF HONBLE BOMBAY HIGH COURT IN THE C ASE OF SMT. PRABHAVATI S. SHAH 231 ITR 01 AND SUBMITTED THAT TH E PRODUCTION OF ADDITIONAL EVIDENCES IS NOT A MATTER OF RIGHT AVAIL ABLE WITH THE ASSESSEE. THE LEARNED DR ALSO PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF FAIRDEAL FILAMENTS LTD. VS. CIT 302 ITR 173 AND ALSO THE DECISION RENDERED BY H ONBLE ALLAHABAD ITA NO.5138/MUM/2015 ASSESSMENT YEAR: 2007-08 4 HIGH COURT IN THE CASE OF RAM PRASAD SHARMA VS. CIT 119 ITR 867 AND ALSO DECISION RENDERED BY HONBLE RAJASTHAN HIGH CO URT IN THE CASE OF CIT VS. RAO RAJA HANUTSINGH 252 ITR 528 OTHER CASE LAWS IN SUPPORT OF THE ABOVE SAID PROPOSITION. THE LEARNED DR FURTHER SUBMITTED THAT CIRCUMSTANTIAL EVIDENCE CAN BE USED TO MAKE ASSESSM ENT AND IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION RENDERED BY INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH IN THE CASE HERSH W . CHADHA [2011] 9 TAXMANN.COM 1 (DELHI)/ [2011] 43 SOT 544 (DELHI)/ [ 2011] 135 TTJ 513 (DELHI). THE LEARNED D.R FURTHER SUBMITTED THA T AN IDENTICAL ISSUE WAS CONSIDERED BY THE CO-ORDINATE BENCH IN THE CASE OF MOHAN MANOJ DHUPELIA IN ITA NO. 3544/MUM/2011 DATED 31.10.2014 AND THE SAME WAS DECIDED AGAINST THE ASSESSEE. THE LEARNED DR F URTHER SUBMITTED THAT THE LEARNED CIT(A) HAS PASSED THE REASONED ORDER FO R REFUSING TO ADMIT ADDITIONAL EVIDENCES AND ACCORDINGLY CONTENDED THAT THE ORDER PASSED BY LEARNED CIT(A) ON THIS ISSUE SHOULD BE UPHELD. 6. THE LEARNED AR, IN THE REJOINDER, SUBMITTED THAT THE PRINCIPLE OF NATURAL JUSTICE DEMANDS THAT VARIOUS EVIDENCES FURN ISHED BY THE ASSESSEE ARE REQUIRED TO BE CONSIDERED BEFORE ADJUDICATING T HE ISSUE. THE AR SUBMITTED THAT THE ASSESSEE COULD COLLECT VARIOUS D OCUMENTS ONLY AFTER PASSING OF THE ASSESSMENT ORDER AND NON-CONSIDERATI ON OF THE SAME WOULD RESULT IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE LEARNED AR FURTHER CONTENDED THAT RULE 46A OF THE INCOME TA X RULE CANNOT BE OVER RIDE THE PRINCIPLES OF NATURAL JUSTICE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ACCORDING TO THE ASSESSEE, THE DETAILS AND EVIDENCE S WHICH WERE RELIED ITA NO.5138/MUM/2015 ASSESSMENT YEAR: 2007-08 5 UPON BY THE ASSESSING OFFICER WAS PROVIDED TO HIM O NLY AFTER PASSING OF ASSESSMENT ORDER. IT WAS SUBMITTED THAT THE INFORM ATION AVAILABLE WITH THE AO WAS ONLY SHOWN TO THE ASSESSEE AT THE TIME O F RECORDING STATEMENTS FROM THE ASSESSEE, BUT THE COPY THEREOF WAS NOT GIVEN. THIS SHOWS THAT THE ASSESSEE WAS NOT GIVEN THE INCRIMINA TING DOCUMENTS AND HENCE, THE ASSESSEE WAS NOT IN A POSITION TO CONTRO VERT THE SAME. IT WAS SUBMITTED THAT THE ASSESSEE WAS GIVEN THE COPIES OF INCRIMINATING DOCUMENTS THAT WERE RELIED UPON THE ASSESSING OFFIC ER AFTER CERTAIN COURT PROCEEDINGS, THAT TOO AFTER THE COMPLETION OF THE ASSESSMENT. THEREAFTER, THE ASSESSEE HAS COLLECTED VARIOUS DETA ILS FROM VARIOUS SOURCES AND COMPILED THE SAME IN THE FORM OF ADDITI ONAL EVIDENCES. ACCORDINGLY, THE ASSESSEE HAS MOVED A PETITION BEFO RE THE LEARNED CIT(A) FOR ADMITTING THE SAME AS ADDITIONAL EVIDENC E. AS NOTICED EARLIER, THE OBJECTED TO THE ADMISSION OF THE SAME IN THE REMAND REPORT GIVEN BY HIM. THE LEARNED CIT(A) HAS ALSO EXPRESSE D THE VIEW THAT THE ASSESSEE HAS FAILED TO SATISFY THE CONDITIONS PRESC RIBED UNDER RULE 46A OF INCOME TAX RULES. ACCORDINGLY HE HAS REFUSED TO ADMIT THE ADDITIONAL EVIDENCES. 8. FROM THE FACTS NARRATED ABOVE, WE NOTICE THAT TH E ASSESSEE COULD COLLECT VARIOUS EVIDENCES ONLY AFTER PASSING OF THE ASSESSMENT ORDER. ACCORDING TO THE ASSESSEE, THESE ADDITIONAL EVIDENC ES ARE VITAL DOCUMENTS WHICH ARE REQUIRED TO BE CONSIDERED IN OR DER TO ADJUDICATE THE ISSUE IN A JUDICIOUS MANNER. THE PRINCIPLE AUDI ALTERAM PARTEM, I.E. NO MAN SHOULD BE CONDEMNED UNHEARD IS THE BASIC CAN ON PRINCIPLES OF NATURAL JUSTICE AND ACCORDINGLY WE FIND MERIT IN TH E CONTENTIONS OF THE ITA NO.5138/MUM/2015 ASSESSMENT YEAR: 2007-08 6 ASSESSEE THAT RULE 46A OF THE INCOME TAX RULES CANN OT BE OVER RIDE THE PRINCIPLES OF NATURAL JUSTICE. HENCE WE ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN REFUSING TO ADMIT THE V ARIOUS ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE. SINCE THE ASSE SSEE WAS NOT GIVEN OPPORTUNITY TO CONTRADICT THE FINDINGS GIVEN BY THE AO BY NOT ADMITTING THE ADDITIONAL EVIDENCES, WE ARE OF THE VIEW THAT T HE LD CIT(A) SHOULD RE-ADJUDICATE ALL THE ISSUES AFRESH BY ADMITTING TH E ADDITIONAL EVIDENCES. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED CIT( A) AND RESTORE ALL THE ISSUES TO THE FILE OF THE LEARNED CIT(A) WITH THE DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES THAT MAY BE FURNISHED BY THE A SSESSEE. AFTER ADMITTING THE SAME, THE LEARNED CIT(A) MAY CALL FOR THE REMAND REPORT FROM THE ASSESSING OFFICER, IF HE FOUND THE SAME NE CESSARY. AFTER CONFRONTING WITH THE REMAND REPORT, IF ANY, THAT MA Y BE FURNISHED BY THE AO WITH THE ASSESSEE, THE LEARNED CIT(A) MY TAKE AP PROPRIATE DECISION IN ACCORDANCE WITH LAW. 9. IN RESULT THE APPEAL FILED BY THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH APRIL, 2016 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 6 TH APRIL, 2016 MP MP MP MP ITA NO.5138/MUM/2015 ASSESSMENT YEAR: 2007-08 7 ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. ' / BY ORDER, ) $ //TRUE COPY// , / ' (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI