M/s Ram Sagar Raj Shekhar HUF, Kanpur V. The Income Tax Officer, Kanpur

ITA 528/LKW/2013

• Counselvise Citation: 52823714 RSA 2013
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-07-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 11-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: P K KAPOOR
• Keywords: Gift; Recovery proceedings; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 528/LKW/2013 ASSESSMENT YEAR: 2002 - 03 M/S RAM SAGAR RAJ SHEKHAR, HUF 5/43 - B, KRISHNA N AGAR, KANPUR V. INCOME TAX OFFICER 1(3) KANPUR PAN: AAGHR4144C (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. P. K. KAPOOR, C.A. RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 21 0 7 2014 DATE OF PRONOUNCEMENT: 25 0 7 2014 O R D E R PER SU NIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 . BECAUSE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS HAVE BEEN SET - OUT HERETO THE 'CIT (A) - II' HAS ACT ED ILLEGALLY IN DECIDING THE APPEAL EX - PARTY. 2 . THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)LL KANPUR HAS WRONGLY CONFIRMED THE ADDITIONS MADE BY THE I.T.O. 1(3) KANPUR ON ACCOUNT OF THE LOAN AND INTEREST TAKEN BY THE KARTA OF H.U.FM/S RAM SAGAR RAJ SHEKHAR - 5/43 - B KRISHNA NAGAR, KANPUR FROM THE KARTA OF H.U.F. M/S. S. M . JAUHARI H.U.F:27/6 , BIRHANA ROAD, KANPUR AMOUNTING TO RS. 5,00,000/ - AS PER TRANSFER (DEPOSIT) ENTRY MADE IN THE BANK A/C MAINTAINED WITH STANDARD CHARTERED BANK, THE MALL, KANPUR( A/C NO. 622 - 1 - 016675 - 4) PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : THROUGH CHEQUE N0.175736 DT. 22.08.2001 FOR RS. 5,00,000/ - OVER WHICH PART INTEREST WAS CHARGED TO THE TUNE OF RS.20,833 AS SHOWN . THE BALANCE SHEET OF THE ASSESSEE H.U.F. ALSO SHOWS THE LIABILITIES AS AT 31.03.2002 FOR TOTAL RS.5, 20,833/ - BEING LAST BALANCE AS OVER WHICH INTEREST CHARGED AT RS.30,000. THE BALANCE SHEET OF KARTA H.U.F. (ASSESSEE) SHOWS THE LOAN LIABILITIES TO M/S. S.M . JAUHARI H.U.F. TO THE TUNE OF RS.5,50,833 AS PAYABLE . 3 . THEREAFTER, THE ASSESSEE PAID THE SAME LOAN OF RS.5,00,000/ - TO THEIR OWN PARTY NAMED M/S. V.V.S. CONCAST PVT. LTD. 76/43 GOPAL MARKET, HALSEY ROAD, KANPUR ON INTEREST AS WAS CHARGED AT RS.60,000/ - AS STATEMENTS OF AFFAIRS SHOWS AS AT 31.03.2003, TDS OF RS.6300 WAS ALSO CHARGED AND DEPOSITED. DATE BANK CHEQUE DEBIT CREDIT NET 18/06/2003 STANDARD & CHARTERED BANK 0219452 20,800.00 07/07/2003 STANDARD & CHARTERED BANK 0219453 35,000.00 23/07/2003 STANDARD & CHARTERED BANK 0219454 2,00,000.00 28 /07/2003 STANDARD & CHARTERED BANK 0219455 2,00,000.00 09/08/2003 STANDARD & CHARTERED BANK 0219456 1,00,000.00 16/08/2003 BY CASH 5,000.00 TOTAL 5,55,833.00 5,000.00 5,50,833.00 R S .5,000/ - CASH RETURNED AND TOTAL AMOU NT RECEIVED I.E. 5,50,833/ - . DETAILS OF A/C AND COPY OF A/C ARE HERE ENCLOSED WITH FOR YOUR KIND VERIFICATION . THE TRANSACTION OF THE LOAN ENTRY MADE WITH BANK ACCOUNTS AND LEDGER ACCOUNTS OF BOTH THE HUF PARTIES ARE CORRECT WITH THE DETAILS OF A/C WITH IN TEREST CHARGED AND TDS MADE AND PAID. HENCE, IT CANNOT BE DENIED THAT BOTH THE PARTIES HAVE PROVED THE CREDIT WORTHINESS IN THE OPEN MARKET FOR LENDING THE BUSINESS FOR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : EARNING INTEREST WHICH HAS PROPERLY BEEN DISCLOSED IN THEIR ACCOUNTS FOR TAX PURPOSES. SUBSEQUENTLY, THE A.O. , I .T.O. 1(3) , KANPUR HAS WRONGLY TREATED THE AFORESAID TRANSACTIONS/ TRANSFER OF LOAN AMOUNT AS RECEIVED BY THE ASSESSEE HUF AS BOGUS GIFT OF RS.5 LACS FROM S.M . JAUHARI HUF AND SHOWN COMMISSION RECEIVED AT RS. 25,000/ - THE A.O. HAS WRONGLY MADE THE ADDITION OF RS. 5,25,000/ - IN A VERY HASTY AND ARBITRARY MANNER AND WITHOUT CONSIDERING THE NATURAL JUSTICE OF LAW. HE EVEN IGNORED THE FACTS AS ARE ENTERED IN BOTH THE HUF'S BOOKS OF ACCOUNTS AND BANKS TRANSACTIONS MADE AND THE TDS PAID ON CHARGED INTEREST. IN FIRST APPEAL'S HEARING, THE LD. C .I .T. (APPEALS) II, KANPUR HAS PROCEEDED WITH THE MATTER EX - PARTY WITHOUT APPRECIATING THE DIFFICULTY OF ASSESSEE IN PUTTING IN APPEARANCE BEFORE THE SAME AND DID NOT CARED THE FACTS OF THE CASE AND HAS WRONGLY CONFIRMED THE A.O.'S ADDITIONS MADE TO THE TUNE OF RS.5,25,000/ - WHICH REQUIRED TO BE QUASHED ACCORDINGLY. THAT THE HUGE DUES RECOVERY PROCEEDINGS SHOULD ALSO BE STAYED TILL THE APPELLATE DECISION AND THE PENALTY PROCEEDINGS AS INITIATED AND LE VIED COMMISSION INTEREST SUMS ARE ALSO REQUIRED TO BE QUASHED ACCORDINGLY. THE DETAILS OF AC CO UNTS COPIES ARE ALSO SUBMITTED HEREWITH FOR THE SYMPATHETIC CONSIDERATION AND QUASHING, THE ADDITIONS AS ARE MADE IN THE CASE. THAT ANY OTHER POINT BE ADDED AT T HE TIME OF HEARING OF APPEAL IN THE CASE. 2 . DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS MOVED AN APPLICATION FOR ADMISSION AND ADJUDICATION OF FOLLOWING ADDITIONAL GROUND S : - 1 . THAT THE ADDITIONAL GROUND OF APPE AL IS SUBMITTED HEREWITH FOR THE SYMPATHETIC CONSIDERATION IN THE CASE THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) - II KANPUR IN A SIMILAR CASE RELATING TO M/S RAM SAGAR USHA H.U.F FOR ASSESSMENT PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : YEAR 2002 - 2003 HAS CONS IDERED THEIR ALL FACTS AND GROUNDS OF APPEAL BY STUDYING THE DETAILS OF A/CS OF THE H.U.F AND THE BANK TRANSACTIONS THOROUGHLY AND ALSO DISCUSSED IN THEIR RELEVANT CASE MATTERS AND HAD SINCE VIEWED............. 'THE CASE HAS BEEN DISCUSSED WITH THE INCOME TAX OFFICER - 1(3), KANPUR. THEREFORE, THE CONCLUSION REACHED BY THE ASSESSING OFFICER OF BOGUS GIFT IS BASELESS AND UNJUSTIFIED'. ACCORDINGLY, THE ADDITION OF RS.5, 25,000/ - IS HEREBY DELETED. IN THE RESULT APPE AL IS ALLOWED.'(COPY OF ORDER DT.29.01.2014 IS ENCLOSED). THEREFORE, IT IS HUMBLY SUBMITTED THAT IN THE AFORESAID H.U.F THE ADDITIONS WHICH WERE MADE BY THE ASSESSING OFFICER MAY KINDLY BE TREATED AS BASELESS AS THE CASE MATTERS IS OF SAME NATURE AND IDEN TICAL TO THE CASE AS DISCUSSED ABOVE, AND HUMBLY PRAYED TO BE QUASHED ACCORDINGLY. 2 . THAT FURTHER ANY POINT BE ADDUCED IN THE CASE AS AND WHEN REQUIRED TO JUSTIFY, THE DETAILS OF ACCOUNTS, NECESSARY DOCUMENTS ETC. WILL BE PRODUCE FOR KIND PERUSAL AND SYMPATH ETIC CONSIDERATION IN THE ABOVE CASE MATTERS. 3 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT THE LD. CIT(A) HAS NOT AFFORDED VALID OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND HE HAS DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT ADJUDICATING THE ISSUES IN DETAIL. THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION OF THE IMPUGNED ISSUE IN DETAI L. 4 . THE LD. D.R. HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 5 . HAVING CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS FIXED THE APPEAL FOR HEARING ON TWO DATES AND THEREAFTER HE HAS DISMISSED THE APPEAL WITHOUT ADJUDICATING THE ISSUES IN DETAIL ON MERIT. SINCE THE LD. CIT(A) HAS DECIDED THE APPEAL WITHOUT AFFORDING PROPER PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WE ARE OF THE VIEW THAT LET THE MATTER BE SENT BACK TO THE LD. CIT(A) FOR ADJUDICATION OF THE IMP UGNED ISSUES AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE WITH A DIRECTION TO RE - ADJUDICATE THE ISSUES AFRESH AFTER A FFORDING PROPER OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25.7.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH JU LY , 2014 JJ: 2107 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )