NAYNA ARVIND MEHTA, MUMBAI V. ITO 25(3)(5), MUMBAI

ITA 5492/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2785 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Unexplained expenditure; Opportunity of being heard; Principle of natural justice; Bonafide belief; Accommodation entries; Reassessment proceedings
• Section: 69C; 143(1); 250; 147; 68

Judgement Text

P A G E | 1 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G.S.PANNU , VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS.5492 & 5493 /MUM/2018 (ASSESSMENT YEARS: 2013 - 14 & 2014 - 15 ) MRS. NAYNA ARVIND MEHTA FLAT NO. 14, KATHIWADI SOCIETY, GULMOHAR ROAD NO. 12, VILE PARLE (WEST) MUMBAI - 400 053 VS. INCOME TAX OFFICER 25(2)(1) MUMBAI PAN AAEPM3433F (APPELLANT) (RESPONDENT) ITA NO.5494/MUM/2018 (ASSESSMENT YEAR: 2014 - 15 ) MR. ARVIND N. MEHTA FLAT NO. 10 , KATHIWADI SOCIETY, GULMOHAR ROAD NO. 12, VILE PARLE (WEST) MUMBAI - 400 053 VS. INCOME TAX OFFICER 25(2)(1) MUMBAI PAN AAEPM3432 E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAHUL K. HAKANI, A .R RESPONDENT BY: SHRI PRAKASH MANE, D .R DATE OF HEARING: 12 .02 .2019 DATE OF PRONOUNCEMENT: 2 7 .02.2019 P A G E | 2 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) O R D E R PER RAVISH SOOD, JM THE PRESENT APPEALS FILED BY THE AFOREMENTIONED ASSESSES ARE DIRECTED AGAINST THE RESPECTIVE ORDERS PASSED BY THE CIT(A) - 37, MUMBAI IN THE CASE OF VIZ. (I) NAYNA ARVIND MEHTA ( A . Y S 2013 - 14 AND 2014 - 15); AND (II). SHRI ARVIND MEHTA (A . Y 2014 - 15), EACH DATED 13.08.2018. AS COMMON ISSUE S ARE INVOLVED IN THE AFOREMENTIONED APPEALS, THUS THE SAME ARE BEING TAKEN UP AND DISPOSED OFF BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST TAKE UP THE APPEAL OF MRS. NAYNA A. MEHTA FOR A.Y. 2013 - 14. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL : 1. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PASSING THE ORDER U/S 250 OF INCOME TAX OF THE INCOME TAX ACT, 1961. 2. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT GIVING THE PROPER OPPORTUNITY OF BEING HEARD. 3. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE INITIATION OF THE REASSE SSMENT PROCEEDINGS WITHOUT PROPER APPLICATION OF MIND AND IN VIOLATION OF THE LEGAL PRINCIPLES. 4. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE GROUND OF NOT COMMUNICAT ING THE REASONS RECORDED IN WRITING FOR ISSUE OF NOTICE U/S 147 OF INCOME TAX ACT, 1961. HIS DENIAL TO INFORM THE ASSESS E E OF SUCH REASONS IS FATAL TO THE REASSESSMENT PROCEEDINGS. 5. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE GROUND OF NOT REPLYING TO THE OBJECTIONS OF THE ASSESSEE AGAINST THE ISSUE OF NOTICE U/S 147. HE FURTHER ERRED IN UPHOLDING THE GROUND OF FINALIZING THE ASSESSMENT BEFORE DISPOSING OFF THE OBJECT IONS OF THE ASSESS E E. 6. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ADDING A SUM OF R S. 1,17,24,090/ - BEING THE AMOUNT OF LONG TERM CAPITAL GAIN AS THE INCOME OF THE ASSESSEE. P A G E | 3 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) 7. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT GIVING THE OPPORTUNITY TO REBUT THE EVIDENCE BY NOT OFFERING THE CROSS EXAMINATION OF THE PARTIES, NOT GRANTING THE INSPECTION O R COPY OF THE DOCUMENTS RELIED UPON AND THUS THE SAID ORDER IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 8. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ACCEPTING THE FACT THAT THE SALE OF SUCH SHARES WAS THROUGH A RECOGNISED STOCK EXCHANGE AND S.T.T. HAS BEEN PAID AND THE SALE PROCEEDS WERE RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE U/S 68 OF THE I.T. ACT, 1961. 9. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N NOT DECIDING THE MATTER ON MERIT. 10. ALL THE ABOVE GROUNDS OF APPEAL ARE MUTUALLY EXCLUSIVE AND WITHOUT PREJUDICE TO EACH OTHER. 11. THE ASSESSEE PRAYS FOR LEAVE TO ADD, ALTER OR AMEND ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE DATE OF HEARING. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR A.Y. 2013 - 14 ON 30.09.2013 , DECLARING TOTAL INCOME AT RS.9,17,820/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE INCOME TAX ACT, 19 61 (FOR SHORT IT ACT). SUBSEQUENTLY , THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC. 147 OF THE IT ACT. 3. INFORMATION WAS RECEIVED BY THE A.O FROM THE INVESTIGATION DIRECTORATE OF KOLKATA THAT THE ASSESSEE AS A BENEFICIARY HAD TAKEN ACCOMMODATION ENTRIES IN FORM OF L ONG TERM CAPITAL GAIN (FOR SHORT LTCG) BY TRADING IN PENNY STOCK S OF RUTRON INTERNATIONAL LTD. AS PER THE INFORMATION RECEIVED THE ASSESSEE HAD ROUTED HER UNACCOUNTED MONEY IN THE FORM OF LTCG WIT HOUT PAYING ANY TAXES ON THE SAME. IN THE BACKDROP OF THE AFORESAID INFORMATION NECESSARY INVESTIGATION S WERE CARRIED OUT BY THE A.O WITH THE HELP OF VARIOUS TOOLS AVAILABLE WITH HIM VIZ. ITD DATA, BSE DATA , MONEY CONTROL WEBSITE, T AXMAN, COURT RUL INGS , IN TERNET AS WELL AS THE INVESTIGATION WING REPORT AND FIN DINGS OF THE SEBI . IT WAS OBSERVED BY THE A.O THAT THE LTCG OF P A G E | 4 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) RS.1,12,68,090/ - WHICH THE ASSESSEE CLAIMED TO HAD EARNED BY TRADING IN THE PENNY STOCK S OF RUTRON INTERNATIONAL LTD. AND WERE SHOWN AS EX EMPT U/S 10(38) OF THE IT ACT WAS BACKED BY A PRE - ARRANGED METHOD THAT WAS EMPLOYED BY HER IN CONNIVANCE WITH OPERATORS TO EVADE TAXES. ON THE BASIS OF HIS AFORESAID OBSERVATIONS THE A.O WAS OF THE VIEW THAT THE ASSESSEE IN THE GARB OF BOGUS SHARE TRANSACTIONS HAD ROUTED HER UNACCOUNTED MONEY THAT WAS EARNED FROM UNDISCLOSED SOURCES INTO HER ACCOUNTS/BOOKS . THE A.O DELIBERAT ED AT LENGTH ON THE MODUS OPERANDI THAT WAS ADOPTED BY THE OPERATORS OF THE PENNY STOCK S . IT WAS OBS ERVED BY HIM THAT THE OPERATORS WOULD INITIALLY GET THE SHARES OF THE P ENNY STOCK COMPANIES ALLOTTED TO THE BENEFICIARIES AT VERY LOW PRIC ES THROUGH PREFERENCES ALLOTMENT AND OFF - MARKET TRANSACTIONS . SUBSEQUENTLY, IN ORDER TO INCREASE THE VOLUME OF THE SHA REHOLDING OF THE BENEFICIARIES THE SAME WOULD BE SUPPLEMENT ED BY GRANTING BO N US SHARES . THEREAFTER, THE PRIC ES OF THE SHARES OF THE PENNY STOCK COMPANIES WOULD BE RIGGED AND RAISED THROUGH CIRCULAR TRADING WHICH WOULD BE MANAGED BY THE OPERATOR OF THE SCRIP. ONCE THE PERIOD OF ONE YEAR PASSED AND THE SHARE PRICES WERE SUFFICIENTLY RIGGED, THEN THE BENEFICIARY WOULD S ELL THEIR SHARES AT AN INFLATED PRICE ON THE STOC K EXCHANGE TO THE EXIT PROVIDERS WHO WOULD BE BOGUS ENTITIES MANAGED AND CONTROLLED BY THE OPERATOR OF THE PENNY STOCK COMPANIES. ON THE BASIS OF HIS AFORESAID OBSERVATIONS THE CLAIM OF EXEMPTION OF LTCG OF RS.1,12,68,090/ - RAISED BY THE ASSESSEE UNDER SE C. 10(38) WAS DECLINED BY THE A.O AND THE ENTIRE AMOUNT OF RS. 1,17,24,090/ - STATED TO HAVE BEEN RECEIVED BACK BY THE ASSES S EE ON THE SALE OF SHARES WAS ADDED TO HER TOTAL INCOME UNDER SEC. 68 OF THE IT ACT. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE ASSESSEE IN THE COURSE OF THE PROCEEDINGS BEFORE THE CIT(A) FILED LETTER S DATED 20.12.2017 AND 02.08.2018 AND REQUESTED HIM TO DIRECT THE A.O TO PROVIDE CERTAIN DOCUMENTS AND STATEMENTS WHICH P A G E | 5 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) WERE RELIED UPON BY HIM WHILE FRAMING THE ASSESSMENT. HOWEVER, AS THE ASSESSEE IN THE COURSE OF THE APPELLATE PROCEEDINGS HAD FAILED TO PUT UP AN APPEARANCE BEFORE THE CIT(A) AND HAD RATHER SIGHT ADJOURNMENTS FR OM TIME TO TIME, THEREFORE, THE APPELLATE AUTHORITY HOLDING A CONVICTION TH AT THE ASSESSEE HAD ADOPTED A LACKADAISICAL APPROACH WITH REGARD TO THE APPELLATE PROCEEDINGS , UPH E LD THE ORDER PASSED BY THE A.O AND DISMISSED THE APPEAL. IN SO FAR THE REQUEST OF THE ASSESSEE THAT THE A.O BE DIRECTED TO PROVIDE DOCUMENTS AND STATEMENTS W HICH WERE RELIED UPON BY HIM WHILE FRAMING THE ASSESSMENT WAS CONCERNED, IT WAS OBSERVED BY THE CIT(A) THAT THE ASSESSEE HAD FAILED TO ESTABLISH AS TO HOW THE SAID DOCUMENTS AND EVIDENCES WERE RELEVANT TO THE PROCEEDINGS BEFORE HIM . 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED THAT THE ASSESSEE HAD AUTHORIZED HER CHARTERED ACCOUNTANTS VIZ. SHRI KIRTI D. SHAH, PROPRIETOR OF M/S KIRTI D. SHAH & A SSOCIATES ALONGWITH SHRI. SANDEEP SHETH, CHARTERED ACCOUNTANT AND SHRI HIMANSHU KALAVADIA, C HARTERED ACCOUNTANT TO APPEAR ON HER BEHALF BEFORE THE CIT(A). THE LD. A.R T OOK US THROUGH THE A FFIDAVIT, DATED 09.02.2019 THAT WAS FILED BY THE ASSESSEE BEFORE US . IT WAS SUBMITTED BY THE LD. A.R THAT THE AUTHORIZED REPRESENTATIVES FOR THE ASSESSEE HAD ON VARIOUS OCCASIONS SOUGHT ADJOURNMENT S FROM THE CIT(A) FOR THE REASON THAT THE THIRD PARTY EVIDENCE AND STATEMENTS WHICH WERE RELIED UPON BY THE A.O FOR MAKING OF ADDITIONS IN T H E HANDS OF THE ASSESSEE DESPITE REPEATED REQUESTS MADE VIDE HER LETTER S DATED 16.01.2017, 21.09.2017 AND 16.01.2018 WERE NOT MADE AVAILABLE. IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID DOCUMENTS WERE INDISPENSABLY REQUIRED BY THE ASSESSEE FOR MEETING OUT THE ADVERSE INFERENCES THAT WERE DRAWN IN HER HANDS. TH E LD. A.R P A G E | 6 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) TAKING SUPPORT OF THE AFORESAID A FFIDAVIT S UBMITTED THAT IN THE BACKDROP OF THE AFOR ESAID FACTS THE CIT(A) HAD ON DIFFERENT OCCAS IONS ALLOWED A D J OURNMENTS TO THE ASSESSEE . IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT THE AUTHORIZED REPRESENTATIVES FOR THE ASSESSEE HAD ALSO REQUESTED THE CIT(A) TO DIRECT THE A . O TO MAKE AVAILABLE THE AFORE SAID DOCUMENTS , AS THE SAME HAD A STRONG BEARING ON THE DISPOSAL OF THE APPEAL BEFORE HIM. THE LD. A.R FURTHER SUBMITTED THAT THE AUTHORIZED REPRESENTATIVES ON THE LAST OCCASION I.E ON 02.08.2008 HAD SOUGHT AN ADJOURNMENT AND WERE INFORMED BY THE OFFICE STAFF OF THE CIT(A) THAT A FRESH DATE OF HEARING WOULD BE GIVEN. THE LD. A.R SUBMITTED THAT DESPITE THE AFORESAID ASSURANCE NO FRESH NOTICE WAS ISSUED AND RATHER THE CIT(A) ON 13.08.2018 DIS MISSED THE APPEAL BY WAY OF AN EXPARTE ORDER . IT WAS SUBMITTED BY THE LD. A.R THAT UNDER THE AFORESAID CIRCUMSTANCES THE ASSESSEE HAD REMAINED UNDER A BONAFIDE IMPRESSION THAT THE MATTER WAS ADJOURNED AND A FRESH NOTICE OF HEARING OF THE APPEAL WOULD BE ISSUED TO THE ASSESSEE . ON THE BASIS OF THE AFORESAID FACTS , IT WAS SUBMITTED BY THE LD. A.R THAT THE NON - APPEARANCE BY THE AUTHORISED REPRESENTATIVES OF THE ASSESSEE BEFORE THE CIT(A) WAS FOR BONAFIDE REASONS AND CIRCUMSTANCES WHICH WERE BEYOND HER CONTROL . THE LD. A.R SUBMITTED THAT KEEPING IN VIEW THE TOTALITY OF THE FA CTS THE MAT T ER IN ALL FAIRNESS MAY BE RESTORE D TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER OF THE CIT(A). IT WAS SUBMITTED BY THE LD. D.R THAT AS THE ASSESSEE D ESPITE HAVING BEEN AFFORDED SUFFICIENT OPPORTUNITY HAD FAILED TO PUT UP AN APPEARANCE BEFORE THE CIT(A), THEREFORE, THE LAT T ER BEING LEFT WITH NO OTHER ALTERNATIVE HAD RIGHTLY DISMISSED THE APPEAL. P A G E | 7 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE CIT(A) - 37, MUMBAI , FOR THE REASON THAT THE ASSE SSEE HAD FAILED TO PUT UP AN APPEARANCE IN THE COURSE OF THE APPELLATE PROCEEDINGS. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE REASONS LEADING TO THE FAILURE ON THE PART OF THE ASSESSEE TO PUT UP AN APPEARANCE IN THE COURSE OF THE APPELLATE PROCEEDING S AND FIND SUBSTANTIAL FORCE IN THE SAME. WE FIND THAT AS DEPOSED BY THE ASSESSEE BY WAY OF AN A FFIDAVIT, DATED 09.02.2019 THAT HAS BEEN FILED BEFORE US, IT IS STATED BY HER AS UNDER: 1. I SAY THAT I HAD AUTHORISED SHRI KIRTI D. SHAH, CHARTERED ACCOUNT ANTS, PROPRIETOR OF M/S KIRTI D. SHAH & ASSOCIATES, WHO IS WORKING UNDER THE ) NAME AND STYLE OF KIRTI D. SHAH & ASSOCIATES AND ALSO CA SANDEEP SHETH AND CA HIM ANSHU KALAVADIA TO APPEAR BEFORE CIT(A) - 37 TO REPRESENT MY MATTER FOR A.Y. 201 3 - 14. 2. I SAY THAT DURING THE COURSE OF APPELLATE PROCEEDINGS, OUR AUTHORISED REPRESENTATIVE HAD APPEARED AND REQUESTED FOR ADJOURNMENT ON VARIOUS DATES BY FILING ADJOURNMENT LETTERS DATED 22/09/2017, 25/10/2017, 20/12/2017. 28/02/2018 AND 02/08/2018. 3. I SAY THAT AD JOURNMENT WAS SOUGHT AS APPLICATION WAS MADE TO A.O BY OUR AUTHORISED REPRESENTATI VE VIDE LETTERS DATED 16/1/2017, 21/9/2017 AND 16/01/2018 FOR SUPPL Y ING THIRD PARTY EVIDENCES AND STATEMENTS RELIED UPON BY LEARNED AO TO MAKE ADDITIONS SO AS TO ENABLE ASSESSEE TO FILE DETAILED SUBMISSIONS AND MEET THE OBJECTIONS OF LEARNED A.O. 4. I SAY THAT THE ADJOURNMENT WAS GRANTED FROM TIME TO TIME ON ABOVE GROUND. I SAY THAT OUR AUTHORISED REPRESENTATIVE HAD FURTHER WRITTEN TO LEARNED CIT (A) TO DIRECT LEARNED AO TO SUPPLY US THE SAID MATERIAL. 5. I SA Y THAT ON 02 - 08 - 2018 , OUR AUTHORISED REPRESENTATIVE ATTENDED WITH THE ADJOURNMENT LETTER. I SAY THAT HE WAS INFORMED BY THE STAFF OF CIT(A) - 37 THAT A FRESH DATE OF HEARING WILL BE ISSUED. I SAY THAT NO FRESH NOTICE WAS ISSUED. 6. I SAY THAT THE LEARNED CIT (A) - 37 PASSED THE IMPUGNED ORDER ON 13/08/2018. 7. I SAY THAT WE WERE UNDER A BONAFIDE IMPRESSION THAT MATTER WAS ADJOURNED AND FRESH NOTICE OF HEARING WILL BE ISSUED AND VARIOUS DOCUMENTS ASKED FOR WILL BE SUPPLIED TO THE ASSESS E E. P A G E | 8 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) 8. I SAY THAT NON REPRESENTATION OF THE CASE BEFORE LEARNED CIT(A) WAS DU E TO CIRCUMSTANCES BEYOND OUR CONTROL AND FOR BONAFIDE REASONS. ON A PERUSAL OF THE FACTS AS A RE DISCERNIBLE FROM THE AFORESAID DEPOSITION OF THE ASSESSEE , WE FIND OURSELVES TO BE IN AGREEMENT WITH HER CLAIM THAT HER AUTHORIZED REPRESENTATIVES HAD REMAIN ED UNDER A BONAFIDE BELIEF THAT THE HEARING OF THE APPEAL WAS ADJOURNED ON THE LAST OCCASION AND A FRESH NOTICE WOULD BE ISSUED BY THE CIT(A) . APART THEREFROM, THE AUTHORISED REPRESENTATIVES ALSO HELD A CONVICTION THAT PURSUANT TO THE REQUEST FILED WITH TH E CIT(A) , THE VARIOUS DOCUMENTS WHICH WERE ACTED UPON BY THE A.O FOR DRAWING OF ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE WOULD BE MADE AVAILABLE. IN OUR CONSIDERED VIEW IN THE BACKDROP OF THE AFORESAID DEPOSITION OF THE ASSESSEE , IT CAN SAFELY BE GA THERED THAT THE ADJOURNMENTS ON VARIOUS OCCASIONS WERE NOT SOUGHT ON FLIMSY GROUNDS, BUT WERE BACKED BY THE REASON THAT THE COPIES OF THE THIRD PARTY DOCUMENTS WHICH WERE GATHERED AND ACTED UPON BY THE A.O WHILE FRAMING THE ASSESSMENT , DESPITE PERSISTENT REQUESTS BY THE ASSESSEE WERE NOT BEING MADE AVAILABLE BY HIM. AS OBSERVED BY US HEREINABOVE, WE FIND THAT THE ASSESSEE HAD ALSO REQUESTED THE CIT(A) FOR DIRECTING THE A.O TO SUPPLY THE AFORESAID DOCUMENTS AS THE SAME HAD A MATERIAL BEA RING ON THE DISPOSAL OF THE APPEAL. WE FIND THAT THE REASON S LEADING TO SEEKING OF ADJOURNMENT S BY THE ASSESSEE CANNOT BE TAKEN AS A REF LECTION OF HER LACKADAISICAL APPROACH THAT WAS ADOPTED IN THE COURSE OF THE APPELLATE PROCEEDINGS. WE FURTHER FIND THAT AS ON 02.08.2018 THE ASSESSEE HAD SOUGH T AN ADJOURNMENT AND WAS INFORMED BY THE OFFICE STAFF OF THE CIT(A) - 37, MUMBAI, THAT A FRESH DATE OF HEARING WILL BE ISSUED. I N THE TOTALITY OF THE AFORESAID FACTS , WE ARE OF THE CONSIDERED VIEW THAT THE ADJOURNMENTS SOUGHT BY THE ASSESSEE ON DIFFERENT OCCASIONS BEFORE THE CIT(A) COULD NEITHER BE HELD TO BE BACKED BY FLIMSY GROUNDS OR UNJUSTIFIED. WE THUS ON A PERUSAL OF THE AFORESAID FACTS AS A RE P A G E | 9 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) DISCERNIBLE FROM THE A FFIDAVIT, DATED 09.02.2019 FILED BY THE ASSESSEE BEFORE US AND AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE CONTENTIONS ADVANCED BY THE LD. A.R ARE OF THE CONSIDERED VIEW THAT IN ALL FAIRNESS THE MATTER REQUIRES TO BE RESTORE D TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. WE MAY HEREIN OBSERVE THA T THE LD. D.R HAD NOT DISLODGED THE FACTS AS HAD BEEN DEPOSED BY THE ASSESSEE IN HER AFFIDAVIT. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS IN ALL FAIRNESS RESTORE THE MATTER TO THE FILE OF THE CIT(A) , WITH A DIRECTION TO HIM TO DISPOSE OFF THE APPEAL AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE 8. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. A.Y. 2014 - 15 ITA NO. 5493/MUM/2018 9. WE SHALL NOW ADVERT TO THE APPEAL OF THE ASSESSEE VIZ. MR S. NAYNA A. MEHTA FOR A.Y 2014 - 15. BRIEFLY STATED, THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR A.Y. 2014 - 15 ON 24.11.2014 , DECLARING TOTAL INCOME AT RS. 7,73,600/ - . THE A.O NOT ACCEPTING THE ASSESSES CLAIM OF EXEMPT LTCG OF RS.1,39,34,698/ - AS WAS STATED BY HER TO HAVE BEEN EARNED FROM TRADING IN THE PENNY STOCK S O F M/S RUTRON INTERNATIONAL LTD. , THEREIN ADDED THE ENTIRE SALE PROCEEDS OF THE SHARES AMOUNTING TO RS.1,44,28,698/ - THAT WERE RECEIVED BY THE ASSESSEE AND ASSESSE D HER INCOME AT R S.1,52,5 2,290/ - . 10. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). HOWEVER, THE CIT(A) OBSERVING THAT THE ASSESSEE HAD FAILED TO PUT UP AN APPEARANCE IN THE COURSE OF THE APPEL LATE PROCEEDINGS AND HAD ADOPTED A LACKADAISICAL APPROACH WIT H REGARD TO THE APPELLATE PROCEEDINGS, THUS UPHELD THE ORDER OF THE A.O AND DISMISSED THE APPEAL . P A G E | 10 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) 1 1 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL OF THE ASSESSEE REMAINS THE SAME AS WERE THERE BEFORE US IN HER EARLIER APPEAL FOR A.Y. 2013 - 14 I.E ITA NO. 5492/MUM /2018, TH EREFORE, OUR ORDER PASSED WHILE DISPOSING OFF THE AFOREMENTIONED APPEAL OF THE ASSESSEE FOR A.Y 2013 - 14 SHALL APPLY MUTATIS MUTANDIS FOR DISPOSING OFF THE PRESENT APPEAL. IN TERMS OF OUR AFORESAID OBSERVATIONS THE MATTER IS RESTORE D TO THE FILE OF THE CIT(A) FOR REFRESH ADJUDICATION AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 1 2 . THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. A.Y. 2014 - 15 ITA NO. 5494/MUM/2018 1 3. WE SHALL NOW ADVERT TO THE APPEAL OF THE ASSESSEE VIZ. MR. ARVIND MEHTA FOR A.Y 2014 - 15. BRIEFLY STATED, THE ASSESSEE HAD FILED HIS RETU RN OF INCOME FOR A.Y. 2014 - 15 ON 29.11.2014 , DECLARING TOTAL INCOME AT RS.10,41,650/ - . THE A.O WHILE FRAMING THE ASSESSMENT DISALLOWED THE ASSESSE S CLAIM IN RESPECT OF EXEMPT LTCG OF RS.2,67,29,290/ - APART THEREFROM, AN AMOUNT OF RS.2,67,292/ - (BEING 1% OF TOTAL TRADED VALUE OF RS. 2,67,29,2980/ - ) WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE AS AN UNEXPLAINED EXPENDITURE UNDER SEC. 69C ON ACCOUNT OF COMMISSION THAT WOULD HAVE BEEN PAID FOR ARRANGING THE ENTIRE BOGUS LTCG TRANSACTION. 1 4 . AGGRIEVED , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). HOWEVER , AS THE ASSESSEE FAILED TO PUT UP AN APPEARANCE IN THE COURSE OF HEARING OF THE APPEAL, THEREFORE, THE CIT(A) BEING OF THE VIEW THAT THE ASSESSEE HAD ADOPTED A LACKADAISICAL APPROACH WIT H REGARD TO P A G E | 11 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) THE APPELLATE PROCEEDINGS UPHELD THE DISALLOWANCE MADE BY THE A.O AND DISMISSED THE APPEAL. 1 5 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. A S THE FACTS AND THE ISSUE INVOLVED IN THE PR ESENT APPEAL REMAINS THE SAME AS WERE THERE BEFORE US IN THE APPEAL OF THE AFOREMENTIONED ASSESSEE VIZ. SMT. NAYNA ARVIND MEHTA IN ITA NO. 5492/MUM/2018 FOR A.Y. 2013 - 14, HENCE OUR OBSERVATIONS THEREIN RECORDED SHALL APPLY MUTATIS MUTANDIS FOR THE DISPOSAL OF THE PRESENT APPEAL BEFORE US. IN TERMS OF OUR AFORESAID OBSERVATIONS THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 1 6 . THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. 1 7 . THE APPEAL S OF THE ASSESSEE I.E SMT. NAYNA ARVIND MEHTA FOR A.Y. 2013 - 14 AND A.Y. 2014 - 15 (ITA NO S . 5492 & 5493/MUM/2018) AND THAT OF SHRI ARVIND MEHTA FOR A.Y. 2014 - 15 I.E. ITA NO.5494/MUM/ 2018 ARE ALLOWED FOR STATIST ICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PR ONOUNCED IN THE OPEN COURT ON 2 7 .02.2019 S D / - S D / - ( G. S.PANNU ) ( RAVISH SOOD ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; 2 7 . 0 2 . 2 0 1 9 PS. ROHIT P A G E | 12 ITA NOS. 5492 - 5494/MUM/2018 AYS. 2013 - 14 AND 2014 - 15 MRS. NAYNA ARVIND MEHTA VS. INCOME TAX OFFICER - 25(2)(1) MR. ARVIND N. MEHTA VS.INCOME TAX OFFICER 25(2)(1) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI .