Sanjay Kumar Kanodia, Jalaun V. Income Tax Officer , Jalaun

ITA 578/LKW/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87728 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.578/LKW/2012 ASSESSMENT YEAR:2009-10 SANJAY KUMAR KANODIA 545, TURNANGANJ, KALPI JALAUN V. INCOME TAX OFFICER ORAI TAN/PAN:AMCPK306C (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY: SHRI. RAJNISH YADAV, D.R. DATE OF HEARING: 27 11 2014 DATE OF PRONOUNCEMENT: 08 01 2015 O R D E R PER SUNIL 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 SELECTION OF THE CASE FOR SCRUTINY IS THE SOLE PREROGATIVE OF THE ASSESSING OFFICER BASED ON HIS 'OBJECTIVE OPINION' AS PER EXPRESS PROVISION CONTAINED IN CLAUSE (II) OF SUB-SECTION (2) OF SECTION 143 AND IN DUE EXERCISE OF HIS PLENARY POWERS, SO THE SELECTION OF THE INSTANT CASE FOR SCRUTINY UNDER COMPUTER AIDED SCRUTINY SCHEME (CASS) WAS WHOLLY ILLEGAL AND THE ASSESSMENT ORDER DATED 28.12.2011 PASSED UNDER SECTION 143(3) WAS NULL AND VOID. 2. BECAUSE IN ANY CASE SELECTION OF THE CASE FOR; SCRUTINY ASSESSMENT UNDER SECTION 143(3) NOT BEING IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN CLAUSE (II) AS APPEARING BELOW SUB-SECTION (2) OF SECTION 143, ENTIRE VARIATION BETWEEN THE 'RETURNED INCOME' AND THE 'ASSESSED INCOME' IS WHOLLY UNLAWFUL, WITH THE RESULT THE ADDITION OF RS.45,66,000/- IS WHOLLY ILLEGAL, AND DESERVE TO BE DELETED. :- 2 -: WITHOUT PREJUDICE TO THE AFORESAID 3. BECAUSE THE CASH AGGREGATING TO RS.45,66,000/- DEPOSITED BY THE APPELLANT IN HIS SAVING BANK ACCOUNTS (RS.39,26,000/- IN ORIENTAL BANK OF COMMERCE AND RS.6,40,000/- IN KOTAK MAHINDRA BANK LTD.) DURING THE FINANCIAL YEAR 2007-08 REPRESENTS COLLECTED BY THE APPELLANT FROM HIS CLIENTS FOR THE SAME BEING DEPOSITED ON THEIR BEHALF WITH M/S SHRIRAM GROUP COMPANIES, MADRAS (IN VARIOUS SCHEMES FLOATED BY IT) BY ISSUE OF CHEQUE(S) FROM HIS SAVING BANK ACCOUNT, AS DIRECT CASH WAS NOT ACCEPTABLE BY THE COMPANY, AND THE SAME CANNOT BE TREATED TO BE THE INCOME OF THE APPELLANT EARNED FROM UNDISCLOSED SOURCE. 4. BECAUSE THE SUMS IN QUESTION IS FULLY VERIFIABLE FROM THE DETAILS FURNISHED BY THE 3RD PARTY I.E. SHRIRAM GROUP COMPANIES, MADRAS (THE SAME COULD NOT BE PLACED BEFORE THE CIT(A) AS IT COULD NOT BECOME AVAILABLE TO THE APPELLANT DURING THE COURSE OF ASSESSMENT/ 1ST APPELLATE PROCEEDINGS) WHICH HAS BEEN RECONCILED BY THE APPELLANT (ANNEXURE - I TO THE GROUNDS OF APPEAL), THERE REMAINS NOTHING FOR BEING ADDED IN THE HANDS OF THE APPELLANT AND THE SAME DESERVES TO BE DELETED. 5. BECAUSE, WITHOUT PREJUDICE TO THE AFORESAID, DUE TO PAUCITY OF TIME AS ALSO NON AVAILABILITY OF THE INFORMATION FROM THE 3RD PARTY THE APPELLANT WAS PREVENTED FROM REPRESENTING HIS CASE DURING THE COURSE OF ASSESSMENT/ 1ST APPELLATE PROCEEDINGS. 6. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2. APROPOS GROUNDS NO.1 & 2, IT WAS CONTENDED THAT THESE GROUNDS ARE COVERED BY THE ORDER OF THE TRIBUNAL AGAINST THE ASSESSEE AND THEREFORE THESE GROUNDS ARE NOT PRESSED. ACCORDINGLY THESE GROUNDS ARE DISMISSED BEING NOT PRESSED. 3. ON MERIT, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THOUGH THE ASSESSEE HAS CONTENDED THAT HE WAS THE AGENT OF SHRI RAM GROUP AND WAS WORKING AS MANAGER AND :- 3 -: USED TO COLLECT MONEY FROM INVESTORS ON BEHALF OF THE ASSESSEE-COMPANY AND THE SAID MONEY WAS DEPOSITED IN THE BANK ACCOUNT, THEREAFTER CHEQUE WAS ISSUED IN FAVOUR OF THE COMPANY. IN TURN, THE COMPANY ISSUED DEBENTURES AND POLICY IN FAVOUR OF THE PERSON FROM WHOM CASH WAS COLLECTED. BUT THE ASSESSING OFFICER HAS NOT ACCEPTED THE CONTENTIONS OF THE ASSESSEE. HE WAS ONLY ALLOWED FEW DAYS TO SUBMIT THE DETAILS OF INVESTORS AND PRODUCE THEM FOR VERIFICATION. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER INVITED OUR ATTENTION THAT THE ASSESSEE WAS ASKED ON 23.12.2011 TO FILE DETAILS AND PRODUCE THE INVESTORS ON 26.12.2011 AND SINCE THE ASSESSEE COULD NOT FURNISH THE REQUISITE DETAILS WITHIN A SHORT PERIOD, THE ASSESSING OFFICER HAS TREATED THE ENTIRE DEPOSIT AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') IN THE HANDS OF THE ASSESSEE BY PASSING AN ORDER ON 28.12.2011. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND EVEN THE LD. CIT(A) DID NOT AFFORD PROPER OPPORTUNITY TO THE ASSESSEE TO PLACE THE RELEVANT EVIDENCE ON RECORD. THE CASE WAS FIRST POSTED FOR HEARING ON 4.7.2012 AND ASSESSEE SOUGHT ADJOURNMENT TO PRODUCE THE REQUISITE EVIDENCE AND THEREAFTER THE LD. CIT(A) HAS FIXED APPEAL FOR HEARING ON 16.7.2012 AND 7.8.2012. SUFFICIENT TIME WAS NOT AFFORDED AND THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 31.8.2012. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER INVITED OUR ATTENTION TO THE DETAILS OF INVESTMENTS FILED BEFORE US AND THE CERTIFICATE ISSUED BY THE COMPANY STATING THEREIN THAT THE ASSESSEE WAS COLLECTING AMOUNT FROM INVESTORS ON BEHALF OF THE COMPANY, I.E. M/S SHRI RAM TRANSPORT CO. LTD. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT IN THE LIGHT OF THESE EVIDENCE, THE CONTENTION OF THE ASSESSEE SHOULD BE EXAMINED BY MAKING NECESSARY VERIFICATION. :- 4 -: 5. THE LD. D.R. HAS PLACED RELIANCE UPON THE ORDERS OF THE LOWER AUTHORITIES, WITH THE SUBMISSION THAT SUFFICIENT OPPORTUNITY WAS AFFORDED TO THE ASSESSEE, BUT HE COULD NOT PLACE REQUISITE DETAILS. 6. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT BOTH THE LOWER AUTHORITIES HAVE NOT AFFORDED SUFFICIENT TIME TO THE ASSESSEE TO PRODUCE THE REQUISITE DETAILS IN ORDER TO ESTABLISH THAT HE WAS WORKING AS BRANCH MANAGER OF THE COMPANY I.E. M/S SHRI RAM TRANSPORT CO. LTD. NOW BEFORE US, THE ASSESSEE HAS FILED DETAILS OF INVESTMENTS ALONG WITH THE CERTIFICATE ISSUED BY M/S SHRI RAM TRANSPORT CO. LTD., IN WHICH IT HAS BEEN CERTIFIED THAT INVESTMENTS/DETAILS ENCLOSED WERE RECEIVED BY THE ASSESSEE ON BEHALF OF THE COMPANY AND ON ITS RECEIPTS PROPER CERTIFICATE WERE ALSO ISSUED IN THE NAME OF VARIOUS DEPOSITORS OF THE COMPANY. FROM A CAREFUL PERUSAL OF THIS EVIDENCE, WE FIND FORCE IN THE CONTENTIONS OF THE ASSESSEE AND WE ARE, THEREFORE, OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION BY THE ASSESSING OFFICER IN THE LIGHT OF EVIDENCE FILED BEFORE US. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE CERTIFICATE AND DETAILS OF INVESTMENT FURNISHED BEFORE US. ACCORDINGLY THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH JANUARY, 2015 JJ:112 :- 5 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR