VINOD KUMAR DUBEY, MUMBAI V. ITO 25(2)(4), MUMBAI

ITA 5705/MUM/2012

• Counselvise Citation: 570519914 RSA 2012
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 22-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 10-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Source of fund; Accommodation entries; Reassessment proceedings
• Section: 147; 68; 132; 144

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.5705/MUM/2012 ASSESSMENT YEAR : 2004-05 SHRI VINOD KUMAR DUBEY, B/38, MAHINDRA &MAHINDRA SOC., KRISHNA NAGAR, BORIVILI (E), MUMBAI 400 066 PAN AABPD0872G VS. THE ITO 25(2)(4), MUMBAI ( ! /ASSESSEE) ( ' /REVENUE) DATE OF HEARING : 2 2 .0 9 .2015 DATE OF PRONOUNCEMENT : 29.09 . 2015 O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST ORDER DATED 28.06.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-35, MUMBAI (HEREINAFTER CALLED THE CIT(A)) , FOR THE ASSESSME NT YEAR 2004-05 ON THE FOLLOWING GROUNDS OF APPEAL: 1.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) 35 [LD CIT(A)], ERRED IN CONFIRMING THE ORDER PASSED BY T HE ASSESSING OFFICER (THE A.O.) UNDER SECTION 144 OF THE INCOME TAX AC T, 1961 (THE ACT), WHICH WAS PASSED IN BREACH OF NATURAL JUSTICE. ! / ASSESSEE BY SHRI VINOD KUMAR DUBEY ' REVENUE BY SHRI B YADAGIN ITA NO.5705/MUM/2012 SHRI VINOD KUMAR DUBEY 2 1.2 WHILE DOING SO, THE LD. CIT(A) FAILED TO APPREC IATE THAT: (I) THE ASSESSMENT WAS FRAMED BY THE A.O. WITHOUT PROVIDING EFFECTIVE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELLANT; AND (II) THE ORDER SO PASSED BY THE A.O. IN BREACH OF P RINCIPLE OF NATURAL JUSTICE WAS LIABLE TO HELD BAD IN LAW. 1.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED WAS LIABLE TO BE HELD AS BAD IN LAW. 2. WITHOUT PREJUDICE TO THE ABOVE; 2.1 THE LD.CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A.O. IN INITIATING REASSESSMENT PROCEEDINGS AND FRAMING ASS ESSMENT OF THE APPELLANT BY INVOKING THE PROVISIONS OF SECTION 147 R.W.S. 148 OF THE ACT. 2.2 THE CIT(A) FAILED TO APPRECIATE THAT THE CASE O F THE APPELLANT DID NOT FALL WITHIN THE PARAMETERS LAID DOWN BY SECTION 147 R.W.S. 148 OF THE ACT. 2.3 THE APPELLANT PRAYS THAT ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW THE REASSESSMENT PROCEEDING BE HEL D TO BE BAD AND ILLEGAL AS THE NECESSARY PRECONDITIONS FOR INITIATI NG REASSESSMENT PROCEEDINGS AS WELL COMPLETION THEREOF WERE NOT COM PLIED WITH. 3. FURTHER WITHOUT PREJUDICE TO THE ABOVE: 3.1 THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE AO IN MAKING ADDITION OF RS.26,67,668/- BEING THE DEPOSITS IN BA NK ACCOUNTS AS INCOME OF THE APPELLANT FROM UNDISCLOSED SOURCES. 3.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE, AND IN LAW, SO SUCH ADDITION WAS CALLED FOR. 2. THE FACTS OF THE CASE ARE THAT INFORMATION WAS R ECEIVED FROM THE DDIT (INV), UNIT-1(3), MUMBAI, THAT A SEARCH ACTION U/S. 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WAS CONDUCTED IN THE CASE OF SHRI CHETAN P SHAH ON 12.08.2004. SHRI CHETAN SHAH WAS AN ENTRY OPERATOR WHOSE MAIN JOB WAS TO TAKE CHEQUES FROM DIFFERENT PARTIES AND GIVE BACK CASH T O THEM AFTER DEDUCTING COMMISSION. DURING THE COURSE OF POST SEARCH ENQUI RIES, IT WAS REVEALED THAT SHRI CHETAN P SHAH HAD BEEN DOING BUSINESS IN THE NAME O F 47 BOGUS FIRMS AND WAS ITA NO.5705/MUM/2012 SHRI VINOD KUMAR DUBEY 3 OPERATING 61 BANK ACCOUNTS IN THE NAME OF THESE FIR MS. IT WAS NOTICED THAT THE ASSESSEE SHRI VINOD KUMAR DUBEY, RUNNING A PROPRIET ARY CONCERN IN THE NAME OF M/S. V K TRADING CO., WAS ONE OF SUCH BENEFICIARIES WHO HAS OBTAINED ACCOMMODATION ENTRIES FOR AN AMOUNT OF RS.4,00,995 FROM SHRI CHETAN P SHAH. 3. THE REVENUE FURTHER RECORDED REASONS U/S. 147 OF THE ACT AND THE CASE WAS REOPENED BY ISSUING NOTICE U/S. 148 OF THE ACT. TH E NOTICE WAS SERVED UPON THE ASSESSEE ON 19.03.2011 REQUIRING THE ASSESSEE TO FI LE THE RETURN OF INCOME TAX FOR ASSESSMENT YEAR 2004-05 WITHIN 30 DAYS FROM THE DA TE OF NOTICE. THE ASSESSEE IN RESPONSE TO REMINDERS THEREOF SUBMITTED COPY OF APP LICATION MADE BY THE ASSESEEE TO THE SALES TAX OFFICE FOR CANCELLATION OF REGISTR ATION NUMBER. IN THIS LETTER , THE ASSESSEE HAD STATED THAT HE HAD NOT DONE ANY BUSINE SS SINCE APRIL 2004-05 AND THAT HE HAD CLOSED DOWN HIS PROPRIETARY CONCERN. THE ASS ESSEE WAS ASKED TO FILE THE BANK ACCOUNT STATEMENT OF HIS PROPRIETARY CONCERN F OR FINANCIAL YEAR 2003-04 AND WAS ASKED TO EXPLAIN AS TO WHY THE AMOUNT OF RS.4,0 0,995/- SHOULD NOT BE ADDED TO HIS TOTAL INCOME TREATING IT AS UNEXPLAINED SOURCES OF INCOME. THE ASSESSEE DID NOT PARTICIPATE IN THE REASSESSMENT PROCEEDINGS U/S. 14 7 AND 148 OF THE ACT. THE REVENUE OBTAINED BANK STATEMENT OF PRATAP CO-OP BAN K LTD. DIRECTLY FROM THE BANK, WHICH REVEALED THAT THE ASSESSEE HAD DEPOSITED AMOU NT OF RS.26,66,688/- INCLUDING CHEQUE OF RS.400995/- GIVEN BY THE ASSESSEE TO MR C HETAN P SHAH ON 18.08.2003 DURING THE PERIOD , DETAILS OF WHICH ARE AS UNDER: DATE AMOUNT (RS) PARTICULARS/SOURCES OF CH EQUE 21.8.2003 4,34,763 BANK OF M 30.8.2003 6,24,708 CANARA BANK 30.8.2003 7,13,349 BANK OF M 02.9.2003 4,76,973 BANK OF M 18.9.2003 2,300 CASH ITA NO.5705/MUM/2012 SHRI VINOD KUMAR DUBEY 4 24.11.2003 3,600 CASH 27.12.2003 10,000 KOPOLE CO. TOTAL 22,65,693/- THE REVENUE THEREFORE, ADDED THE ENTIRE AMOUNT OF R S.26,66,668/- WHICH INCLUDED THE BANK DEPOSIT AMOUNT OF RS.22,65,693/- AND RS.4, 00,995/- GIVEN TO MR CHETAN P SHAH ON 18.08.2003 AS UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT. 4.AGGRIEVED BY THE ASSESSMENT ORDER PASSED U/S 144 READ WITH SECTION 147 OF THE ACT, THE ASSESSEE FILED THE FIRST APPEAL WITH THE C IT(A) AND SUBMITTED THAT THE ASSESSEE WAS PROPRIETOR OF V.K.TRADING COMPANY AND HAS NOT DONE ANY BUSINESS DURING THE YEAR. THE ASSESSEE HAS NOT FILED ANY RE TURN BECAUSE THERE WAS NO INCOME LIABLE TO TAX. THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER HAS ADDED RS.26,66,668/- WITHOUT ANY PROPER VERIFICATION. TH E ASSESSEE SUBMITTED THAT HE IS NOT AWARE OF ANY OF THESE DEPOSITS IN HIS ACCOUNT. THE ASSESSEE ALSO SUBMITTED THAT WHILE HE WAS OUT OF MUMBAI HE HAD LEFT CERTAIN SIGN ED BLANK CHEQUES WITH HIS OFFICE BOY, WHO HAS PLAYED SOME MISCHIEF IN CONNIVANCE WIT H MR. CHETAN P. SHAH. THE ASSESSEE SUBMITTED THAT HE HAS WRITTEN TO THE BANK SO THAT ALL THE DETAILS CAN BE OBTAINED WITH REGARD TO THE CHEQUES AND REQUESTED T HAT SINCE THERE IS A MISCHIEF CAUSED BY HIS STAFF THE ASSESSMENT SHOULD BE QUASHE D. THE THEORY OF MISCHIEF BY THE OFFICE STAFF WAS NOT ACCEPTED BY THE CIT(A) AND , THUS, THE CIT(A) CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER OF RS.26,66 ,668/- U/S 68 OF THE ACT AS UNEXPLAINED CASH CREDITS. 5. AGGRIEVED BY THE ORDERS OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE US. 6. THE ASSESSEE APPEARED IN PERSON BEFORE US AND ST ATED THAT THE ASSESSMENT ORDER IS MADE U/S. 144 R.W.S. 147 OF THE ACT. HE C ONTENDED THAT PROPER OPPORTUNITY ITA NO.5705/MUM/2012 SHRI VINOD KUMAR DUBEY 5 HAS NOT BEEN GIVEN TO HIM TO SUBMIT HIS CASE BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT HIS BANK ACCOUNT HAS BEEN MISUSED BY HIS OFFICE BOY IN CONNIVANCE WITH MR CHETAN P SHAH AND HE NEEDS TIME TO GET ALL INFORMATION FROM THE BANK TO GIVE REPLIES/CONTENTIONS AND REQUESTED THAT IF THE MATTER IS SENT BACK TO THE ASSESSING OFFICER, HE WILL BE ABLE TO EXPLAIN ALL T HE DETAILS/INFORMATION SOUGHT FOR AND REBUT THE ADDITIONS MADE BY THE ASSESSING OFFICER. 7. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHO RITIES BELOW. 8. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSMENT ORDER WAS PASS ED U/S. 144 R.W.S. 147 OF THE ACT, THE ASSESSEE HAS NOT FILED THE RETURN OF INCOM E BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE NOTICE ISSUED. THE ASSESSEE SUBMIT TED BEFORE US THAT HE HAS NOT DONE ANY BUSINESS DURING THE RELEVANT ASSESSMENT YE AR RATHER HIS BANK ACCOUNT IS MISUSED BY HIS OFFICE STAFF IN CONNIVANCE WITH SAID MR CHETAN P SHAH. THE ASSESSEE HAS CONTENDED THAT IF AN OPPORTUNITY IS GIVEN TO HI M, HE WILL BE ABLE TO REBUT THE ALLEGATIONS OF THE ASSESSING OFFICER WITH PROPER EV IDENCES TO SUBSTANTIATE HIS CLAIM. IN OUR CONSIDERED OPINION AND IN THE INTEREST OF JU STICE, WE SET ASIDE THE ASSESSMENT ORDER DATED21.12.2011 PASSED U/S 144 R.W.S. 147 OF THE ACT PASSED BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE CIT(A) RE STORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER , WHEREBY SUFFICIENT OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO PROVE HIS CONTENTIONS AND BRING ON RECORD COGENT MA TERIAL TO SUBSTANTIATE HIS CLAIM IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE AN D IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ITA NO.5705/MUM/2012 SHRI VINOD KUMAR DUBEY 6 ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 29.09.2015. SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER MUMBAI; - DATED : 29/09/2015 S.A. P.S/. .. ' #$%& '&($ / COPY OF THE ORDER FORWARDED TO : 1. =>?@ / THE APPELLANT 2. FG?@ / THE RESPONDENT. 3. L L M ( => ) / THE CIT, MUMBAI. 4. L L M / CIT(A) - , MUMBAI 5. T'U F , L =>V = W , / DR, ITAT, MUMBAI 6. Y / GUARD FILE. ' / BY ORDER, GT> F //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI