HIRALAL CHOUDHARI, NAVI MUMBAI V. ASST CIT CIR 22(3), MUMBAI

ITA 5982/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4040 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 24-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Opportunity of being heard
• Section: 143(3)

Judgement Text

HIRALAL CHOUDHARI ITA 5982 /M/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI , , BEFORE SHRI D KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUK LA , JUDICIAL MEMBER ITA NO. : 5982 /MUM/20 14 (ASSESSMENT YEAR: 2007 - 08 ) HIRALAL CHOUDHARI, SHOP NO. 54, PRABHAT CENTRE, SEC. 1A, CBD BELAPUR, NAVI MUMBAI - 400 0 1 4 .: PAN: AEWPD 9528 G VS ACIT /CIR - 22 ( 3 ), MUMBAI - 400 002 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAK ESH JOSHI RESPONDENT BY : SHRI RAJENDRA CHANDEKAR /DATE OF HEARING : 20 - 0 4 - 201 6 / DATE OF PRONOUNCEMENT : 20 - 0 4 - 2016 ORDER : . . : PER AMIT SHUKLA , JM : THE AFORESAID APPEAL HAS FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 27.06.2014 PASSED BY CIT(A) - VII, MUMBAI, FOR THE QUANTUM OF ASS ESSMENT PASSED UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2007 - 08. IN THE GROUNDS OF APPEAL FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN PASSING THE EX - PARTE ORDER, W ITHOUT GRANTING THE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 2. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN REOPENING THE ASSESSMENT COMP LETED U/S 143(1) OF THE INCOME TAX HIRALAL CHOUDHARI ITA 5982 /M/2014 2 ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN NOT ACCEPTING THE FACT THAT PROVISIONS OF SECTION 44AF OF THE INCOME TAX ACT, 1961 ARE APPLICABLE TO THE BUSINESS OF THE ASSESSEE AND BY TREATING THE BUSINESS OF THE ASSESSEE AS MANUFACTURE WITHOUT CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE AS W ELL AS LAW. 4. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN REJECTING BOOKS OF ACCOUNTS OF THE ASSESSEE WITHOUT CONSIDERING FACTS AND CIRCUMSTANCES OF T HE FACT AS WELL AS LAW. 5. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN MAKING AN AD - HOC ADDITION OF RS.11,38,654/ - TO BUSINESS INCOME ON ACCOUNT OF ALLE GED SUPPRESSED SALES & REDUCED NP, MERELY ON ASSUMPTIONS AND ESTIMATES, WITHOUT CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE AS WELL AS LAW. 6. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING T HE ACTION OF LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.9,50,000/ - BY NOT ACCEPTING THE GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITORS EVEN AFTER PRODUCING CONFIRMATIONS FROM THEM, AND ALSO NOT ACCEPTING THE FACT THAT THE ASSESSEE HAD DI SCHARGED HIS ONUS OF PROVING THEIR GENUINENESS. 7. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN DRAWING PRESUMPTIVE EXPENDITURES OF RS.16,51,136/ - TOWARD S BUSINESS FOR COMPARISON PURPOSES WITH THE ALLEGED ADDITIONS MADE ABOVE, MERELY ON ASSUMPTIONS AND ESTIMATES, WITHOUT CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE AS WELL AS LAW. 2. AT THE OUTSET , THE LD. COUNSEL FOR THE ASSESSEE , SHRI R AKESH J OSHI SUBMITTED THAT THE LD. CIT(A) - 7, MUMBAI HAS PASSED EX - PARTE ORDER WITHOUT GIVING ANY OPPORTUNITY OF LEASING AND CONSIDERING THE ASSESSEES WRITTEN SUBMISSION AND PAPER - BOOK FILED BEFORE THE OFFICE OF THE CIT (APPEALS). HE POINTED OUT THAT, THE APPELLATE J URISDICTION OF THE ASSESSEE LIED WITH CIT(A PPEALS ) - 33, MUMBAI. HIRALAL CHOUDHARI ITA 5982 /M/2014 3 EVEN THE NOTICE OF HEARING OF APPEAL DATED 12.07.2013 FIXING THE DATE FOR 23.07.2013 WAS ALSO ISSUED FROM THE OFFICE OF THE CIT(A PPEALS ) - 33, MUMBAI. IN RESPONSE TO THE SAID NOTICE, THE AU THORISED REPRESENTATIVE FILED AN ADJOURNMENT APPLICATION BEFORE THE CIT(A) - 33, SEEKING FOR AN ADJOURNMENT WHICH WAS DJOURNED FOR 20 TH AUGUST, 2013. H E ALSO POINTED OUT THAT THE APPELLATE PROCEEDINGS FOR AY THE 2008 - 09 WAS ALSO PENDING BEFORE THE SA ME CIT(A ). ON 20 TH AUGUST, 2013, ASSESSEE HAS FILED HIS WRITTEN SUBMISSION THROUGH AUTHORIZED REPRESENTATIVE ALONG WITH THE PAPER BOOK. IN THE MEANTIME, PERHAPS, THE APPEAL FOR THE IMPUGNED AY 2007 - 08 WAS TRANSFERRED TO CIT(A) - VII, MUMBAI, WHO PASSED THE EX - PARTE ORDER WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE. THUS, EX - PARTE ORDER PASSED BY CIT(A) HAS CAUSED GREAT HARDSHIP AND PREJUDICE TO THE ASSESSEE. HE FURTHER SUBMITTED THAT OTHERWISE ON MERITS, THE ISSUE IS SQUARELY COVERED IN THE FAVOUR OF THE ASSESSEE BY THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2009 - 10 AND EVEN THE REVENUES APPEAL AGAINST THE SAID ORDER HAS ALREADY BEEN HEARD BY THE TRIBUNAL. ACCORDINGLY, HE REQUESTED THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT(A) TO DECIDE THE I SSUE AFTER GIVING OPPORTUNITY TO THE ASSESSEE AND ALSO CONSIDERING THE WRITTEN SUBMISSION, PAPER BOOK AND ORDER OF THE APPELLATE AUTHORITIES. 3. LD. DR DID NOT HAD ANY OBJECTION FOR SETTING ASIDE THE MATTER TO THE FILE OF THE CIT(A) FOR AFRESH ADJUDICATI ON. 4. AFTER CONSIDERING THE AFORESAID SUBMISSION MADE BY THE LD. COUNSEL AND ON THE PERUSAL OF THE MATERIAL PLACED ON RECORD, WE FIND THAT, THE NOTICE OF HEARING OF THE APPEAL BEFORE THE FIRST APPELLATE AUTHORITY RELATING TO ASSESSMENT YEAR 2007 - 08 AGAIN ST ORDER OF THE AO DATED 30.12.2011 , WAS ISSUED FROM THE OFFICE OF CIT(A) - 33, MUMBAI ON 30.12.2011 , FIXING THE DATE OF HEARING FOR 23.07.2013. IN RESPONSE TO THE SAID DATE OF HEARING, THE ASSESSEE HAD SOUGHT ADJOURNMENT AND ACCORDINGLY , THE CASE WAS ADJOUR NED BY THE CIT(A) - 33 F O R 20 TH AUGUST, 2013 ( A COPY OF ADJOURNMENT HIRALAL CHOUDHARI ITA 5982 /M/2014 4 APPLICATION ALONG WITH ACKNOWLEDGEMENT OF RECEIPTS FROM THE OFFICE OF CIT(A) - 33 DATED 23.07.2013 HAS BEEN ENCLOSED IN THE PAPER - BOOK PAGE - 2 ) . ON THE NEXT DATE OF HEARING, THAT I S, ON 20 TH A UGUST, 2013, THE ASSESSEE THROUGH HIS AUTHORIZED REPRESENTATIVE HAS FILED WRITTEN SUBMISSION ALONG WITH PAPER BOOK. IT APPEARS THAT IN THE MEANTIME , THE IMPUGNED APPEAL FOR THE AY 2007 - 08 WAS TRANSFERRED TO CIT(A) - VII, BEFORE WHOM ALL THE RECORDS FILED BY THE ASSESSEE WAS NOT TRANSFERRED. ACCORDINGLY, THE LD CIT(A) - VII, MUMBAI HAS PASSED EX - PARTE ORDER CONFIRMING THE ORDER OF THE AO. UNDER THESE FACTS AND CIRCUMSTANCES, WE FIND THAT GROSS VIOLATION OF PRINCIPLE OF AUDI ALTERAM PARTEM BY NOT PROVIDING OPPORT UNITY OF HEARING AND ALSO NOT CONSIDERING THE SUBMISSIONS / DOCUMENTS FILED DURING THE COURSE OF THE HEARING. IT HAS BEEN INFORMED BY THE LD. COUNSEL BEFORE US THAT IN THE AY 2009 - 10, THE LD. CIT(A) ON THE SAME ISSUE HAS DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE AND THE REVENUES APPEAL BEFORE TRIBUNAL HAS ALSO BEEN HEARD. IN THE INTEREST OF JUSTICE, WE FEEL THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT(A) TO CONSIDER THE ASSESSEES SUBMISSION, PAPER BOOK AND ALSO THE ORDER OF THE TRIBUNAL F OR THE ASSESSMENT YEAR 2009 - 10 IF THE SAME IS BASED ON THE SIMILAR FACTS AND ISSUES. THE DEPARTMENT WILL INTIMATE TO THE ASSESSEE ABOUT THE PROPER JURISDICTION OF THE CIT(A) AND SUFFICIENT OPPORTUNITY SHALL BE ACCORDED TO THE ASSESSEE . ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH A PRIL , 2016 . SD/ - SD/ - ( ) ( ) ( D. KARUNAKAR RAO ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 20 TH APRIL , 2016. HIRALAL CHOUDHARI ITA 5982 /M/2014 5 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 7 , MUMBAI . 4 ) THE COMMISSIONER OF INCOME TAX - 22 , MUMBAI . 5 ) , , / THE D.R. D BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS