The Income-tax Officer, Srinagar V. Sh. Ghulam Ahmed Phamboo Prop, Srinagar

ITA 581/ASR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63469 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 08-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 44AD; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.581(ASR)/2011 ASSESSMENT YEAR:2006-07 PAN :ANQPP3266J THE INCOME TAX OFFICER, VS. SH. GHULAM AHMED PHAMB OO, WARD 3(1), PROP. M/S. PHAMBOO CONSTRUCTIONS, SRINAGAR. SAIDA KADAL, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. TARSEM LAL, DR RESPONDENT BY: NONE DATE OF HEARING: 10/09/2012 DATE OF PRONOUNCEMENT:12/09/2012 ORDER PER BENCH ; THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E IMPUGNED ORDER OF THE CIT(A), JAMMU CAMP AT SRINAGAR, DATED 12.09. 2011 FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CAPITAL INTRODUCTION OF RS.30,91,300/- WHEN THE ASS ESSEE HAS FILED NOMINAL INCOMES RANGING FROM RS.40,000/- TO R S.60,000/- U/S 44AD. ITA NO.581(ASR)/2011 2 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CAPITAL INTRODUCTION WHEN THE ASSESSEE WAS SUPPOSED TO WITHDRAW HOUSEHOLD EXPENSES OUT OF INCOME EARNED, R ESULTING IN INSUFFICIENT BROUGHT FORWARD CAPITAL BALANCE. 2. NOTICE OF HEARING WAS ISSUED TO THE ASSESSEE ON DIFFERENT DATES. IN RESPONSE TO THE SAME, SH. BASHIR AHMAD LONE (FCA) F ILED AN APPLICATION FOR ADJOURNMENT ON THE GROUND THAT HE IS HAVING SOME DO MESTIC WORK. THIS BENCH HAD ADJOURNED THE MATTER. BUT TODAY I.E. 10.0 9.2012, WE HAVE NOT RECEIVED ANY APPLICATION FROM THE ASSESSEE OR FROM HIS AUTHORIZED REPRESENTATIVE. ON THE LAST DATE OF HEARING WE FOUN D THAT SH. BASHIR AHMAD LONE (FCA) HAS NOT FILED ANY AUTHORIZATION TO REPRE SENT THE CASE ON BEHALF OF THE ASSESSEE BUT WE ADJOURNED THE MATTER FOR 10.09. 2012. ON 10.09.2012, HE HAS NEITHER FILED ANY APPLICATION NOR HE APPEARED I N PERSON WITH AUTHORIZATION. WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE MATTER. THEREFORE, WE PROCEED TO DE CIDE THE ISSUE IN DISPUTE AFTER HEARING THE LD. DR. 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY THE LD. DR. THEREFORE, THERE IS NO NEED TO REPEAT THE S AME FOR THE SAKE OF CONVENIENCE. 4. AT THE TIME OF HEARING, THE LD. DR STATED THE AU THORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE LD. CIT(A) AND FILED WRITTEN SUBMISSIONS ITA NO.581(ASR)/2011 3 AND SUBMITTED A NUMBER OF DOCUMENTS TO SHOW THAT TH E ASSESSEE WAS IN BUSINESS SINCE LAST 30 YEARS AND WHATEVER CAPITAL W AS ACCUMULATED WAS OVER THE YEARS. HE STATED THAT SINCE THESE DOCUMENTS WER E NOT PRODUCED BEFORE THE AO BY THE ASSESSEE AND THE LD. FIRST APPELLATE AUTH ORITY HAS ALSO NOT GIVEN OPPORTUNITY TO THE AO, WHICH IS CONTRARY TO THE RUL E 46 OF THE INCOME TAX RULES, 1962. HE STATED THAT THE IMPUGNED ORDER DESE RVES TO BE CANCELLED BECAUSE THE GENUINENESS OF THE DOCUMENTS FILED BY T HE ASSESSEE BEFORE THE LD. FIRST APPELLATE AUTHORITY HAS NOT BEEN EXAMINED BY THE AO. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND WE ARE OF THE CONSIDERED OP INION THAT THE ISSUE IN DISPUTE IS UNDER SECTION 68 OF THE ACT AND THE ASSE SSEE HAS SHOWN CREDITORS AT THE YEAR END AND HAD NOT MAINTAINED THE INDIVIDUAL LEDGER ACCOUNTS OF THE PARTIES FROM WHOM PURCHASES WERE MADE AND THE SALAR Y, WAGES AND LEDGER REGISTER WAS NOT PRODUCED BEFORE THE AO. THE AO ALS O MADE INVESTIGATION RELATING TO THE SUNDRY CREDITORS AND FOUND THAT SOM E OF THEM DENIED HAVING ANY CREDIT BALANCE AT THE YEAR END AND LASTLY THE A O HAD MADE THE ADDITION IN RESPECT OF SUNDRY CREDITORS BEING BOGUS CREDITORS R AISED DURING THE YEAR UNDER REFERENCE BY INVOKING THE PROVISIONS OF SECTI ON 68 OF THE I.T.ACT, 1961. BUT THE LD. FIRST APPELLATE AUTHORITY HAS DE LETED THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CAPITAL INTRODUCTION OF RS. 30,91,300/- WHEN THE ITA NO.581(ASR)/2011 4 ASSESSEE HAS FILED NOMINAL INCOMES RANGING FROM RS. 40,000/- TO RS.60,000/- U/S 44AD OF THE ACT. 5.1. AFTER GOING THROUGH THE IMPUGNED ORDER, WE FIN D THAT THE LD. FIRST APPELLATE AUTHORITY HAS WRITTEN IN THE IMPUGNED ORD ER THAT THE EVIDENCES FILED ALONGWITH WRITTEN SUBMISSIONS WERE NOT BEFORE THE A O, BUT HE HAS FORWARDED THE SAME TO THE AO FOR EXAMINATION AND COMMENTS WHI CH ARE RECEIVED AND ARE PLACED ON RECORD. LASTLY, THE LD. FIRST APPELL ATE AUTHORITY HAS ADMITTED THE EVIDENCE AND DELETED THE ADDITION IN DISPUTE AND AP PLIED SECTION 145(3) OF THE ACT AND ESTIMATED THE NET INCOME @ 10%. 5.2. AFTER GOING THROUGH THE IMPUGNED ORDER, WE HAV E NOT FOUND ANY EVIDENCE SHOWING THAT THE ASSESSEE HAS FILED ANY AP PLICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 FOR ADMISSION OF ADDI TIONAL EVIDENCE. WE ALSO FOUND THAT THE LD. FIRST APPELLATE AUTHORITY H AS ALSO NOT GIVEN ADEQUATE OPPORTUNITY TO THE AO TO EXAMINE THE ADDITIONAL EVI DENCE THOROUGHLY FILED BY THE ASSESSEE BEFORE HIM, WHICH IS CONTRARY TO TH E PRINCIPLES OF NATURAL JUSTICE. WE ARE NOT COMMENTING UPON THE MERITS OF T HE CASE. WE ARE OF THE VIEW THAT IN THE PRESENT CASE, THE ADDITION IN QUES TION HAS BEEN DELETED CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE, AS R EQUIRED UNDER RULE 46A OF THE I.T. RULES, 1962 AND FOR THAT THE IMPUGNED ORDE R DESERVES TO BE CANCELLED. ACCORDINGLY, WE CANCEL THE IMPUGNED ORDE R WITH THE DIRECTION TO ITA NO.581(ASR)/2011 5 THE LD. CIT(A) TO DECIDE THE ISSUE IN DISPUTE, AFR ESH UNDER THE LAW AFTER GIVING ADEQUATE OPPORTUNITY TO THE AO AS WELL AS TO THE ASSESSEE. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12T SEPTEMBER, 2012. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: GH. AHMED PHAMBOO, SRINAGAR 2. THE ITO WARD 3(1), SRINAGAR. 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.