GURMEET SINGH BAJAJ, NEW DELHI V. ITO, WARD- 49(3), NEW DELHI

ITA 6109/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6592 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 29-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: LALITA KRISHNAMURTI
• Keywords: Opportunity of being heard
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER ITA NO.-6109/DEL/2017 ( ASSESSMENT YEAR: 2012-13) GURMEET SINGH BAJAJ,JB - 38E, DDA FLATS (JANTA FLATS), HARI NAGAR, NEW DELHI 110 064 VS I.T. O WARD - 49(3), NEW DELHI ASSESSEE BY LALITA KRISHNAMURTI, CA REVENUE BY SH. S.L. ANURAGI , SR. DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 17.8.2017 OF CIT(A) 17 NEW DELHI PERTAINING TO 2009-10 ASSTT. YEAR ON THE FOLLOWING GROUNDS :- 1. THAT THE ADDITION OF RS. 35,15,000/- MADE BY AO A ND AS SUSTAINED BY CIT(A) IS ARBITRARY, UNJUST AND BAD IN LAW. 2. THAT IN THE ABSENCE OF COMPLETE AND THOROUGH EXAMIN ATION OF RAVINDER SINGH KOHLI- SOLE BENEFICIARY OF THE ALLEGED AMOUNT OF RS. 35,15 ,000/- UNDER SECTION 131 BY THE AO, THE ADDITION OF SUCH AMOUNT IN THE HANDS OF APPELLA NT IS ARBITRARY, UNJUST AND VERY EXCESSIVE. 3. THAT WITHOUT PREJUDICE TO GROUND NOS. 1 AND 2 ABOVE AO OUGHT TO HAVE MADE THE ADDITION ONLY TO THE EXTENT OF COMMISSION THAT MAY BE EARNED BY APPELLANT IN RESPECT OF THE AMOUNT ALLEGED TO HAVE BEEN DEPOSITED IN BANK A ND TRANSFERRED BY CHEQUE/BANK DRAFT TO ACCOUNT OF RAVINDER SINGH KOHLI PROPRIETOR JANTA RUBBER WORKS. 4. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJU DICE TO ONE ANOTHER. 2. LD. AR MISS LALITA KRISHNAMURTI INVITED ATTENTION TO PAGE 15 AND 16 OF THE IMPUGNED ORDER READ ALONG WITH PAGES 140 TO 142 AND 143 TO 162 OF THE PAPER BOOK TO HIGHLIGHT THAT IN THE SET ASIDE PROCEE DINGS, THE AO WHO HAD BEEN DIRECTED TO SUMMON SHRI RAVINDER SINGH KOHLI HA VING FAILED TO DO SO, WAS DIRECTED BY THE CIT(A) TO SUMMON AND QUESTIO N HIM. THE ASSESSEE HAS CONSISTENTLY ARGUED THAT SHRI R.S.KOHLI HAS INDULGED IN MISUSING THE BANK ACCOUNTS OF THE ASSESSEE, WHO WAS A P ETTY TRADER OWNING NO ASSETS. REFERRING TO THE RECORD, IT WAS SUBMITTED, MR. RAVINDER SINGH KOHLI WAS SUMMONED, HIS STATEMENT WAS RECORDED; HE SOUGH T TIME TO FURTHER SUBSTANTIATE HIS STATEMENT ON BEING CONFRONTED W ITH DISCREPANCIES, HOWEVER, THEREAFTER HE FAILED TO APPEAR. IT WAS HER SUB MISSION THAT AO HAS NOTED THESE FACTS IN THE REMAND REPORT; COPY OF THE FIRS T STATEMENT OF SHRI RAVINDER SINGH KOHLI IT WAS SUBMITTED IS AT 182 TO 183 HIS ADDRESS IS GIVEN DATE OF HEARING 02.07 .2018 DATE OF PRONOUNCEMENT 27.07. 2018 ITA-6109/DEL/2017 PAGE 2 OF 4 AS D 11 / 15 MODEL TOWN II NEW DELHI 09, HIS PAN IS ME NTIONED AANPK4420D; HE IS A PROPRIETOR OF M/S. JANTA RUBBER WORK S, 330 PUNJA SHRIF KASHMERE GATE, DELHI 66. INVITING FURTHER ATTENTION TO THE SUBSEQUENT RECORDING. COPY AT SPECIFIC PAGE 148 (146 TO 149), IT WAS R EAD OUT THAT SHRI R.S.KOHLI FINALLY CLAIMED THAT HE IS NOT AWARE AND WILL PLACE FULL FA CTS ON RECORD LATER ON. IN THE SAID BACKGROUND IT WAS HER SUBM ISSION THAT ALL ALONG THE ASSESSEE IS STATING THAT THE ASSESSEE HAS BEEN A SMALL TRADER AND SHRI RAVINDER SINGH KOHLI IS AN ESTABLISHED AUTOMOTIVE PART DEALE R WHO PERSUADED THE ASSESSEE TO OPEN AN ACCOUNT IN THE VER Y SAME BRANCH AND HAND OVER BLANK SIGNED CHEQUES TO HIM AND THE AMOUNTS WERE DEPOSITED AND WITHDRAWN FROM THE BANK ACCOUNT OF THE ASSESSEE WIT HOUT HIS KNOWLEDGE BY SHRI KOHLI AS THE ASSESSEE REMAINED IGNORAN T AND TRUSTING THE BIG TRADER. INVITING ATTENTION TO THE PAST HISTORY OF THE ASSESSEE, IT WAS SUBMITTED THAT THE ASSESSEE IS DERIVING INCOME FROM TRAD ING IN SMALL MOTOR PARTS. HIS SUBMISSION, HAS BEEN ELABORATED IN PARA 3 AT PAGE 3 OF THE IMPUGNED ORDER BY THE CIT(A). IT WAS SUBMITTED THAT IT H AD BEEN ARGUED THAT ASSESSEE WAS A PETTY TRADER LIVING IN RENTED HOUSE OPERATING FROM A SHOP ALSO ON RENT AND ALSO OWNED NO IMMOVABLE PROPERTY AND WAS A PERSON WITH MEAGER MEANS AND HUMBLE BACKGROUND THAT IN MAY, 2008 THE ASSESSES MET SHRI RAVINDER SINGH KOHLI. FOR READY REFER ENCE, THE RELEVANT EXTRACT FROM PAGE 3 PARA 4 AND 5 OF THE IMPUGNED ORDER IS REPRODUCED HEREUNDER :- 4. FROM THE RETURNS IT WILL BE SEEN THAT THE AP PELLANT WAS A PETTY TRADER IN THIS BUSINESS. HE LIVED IN A RENTED HOUSE AND OPERATED H IS BUSINESS FROM A SHOP WHICH WAS ALSO ON RENT. HE DID NOT OWN ANY IMMOVABLE PROPERTY NOR DOES HE HAVE ANY INVESTMENT. APPELLANT WAS FROM A HUMBLE BACKGROUND WITH MEAGER MEANS. 5. HIS BUSINESS INITIALLY (ASSESSMENT YEAR 2003- 04 TO ASSESSMENT YEAR 2008-09) INVOLVED PURCHASE AND SALE OF AUTOMOBILE PARTS BY T AKING PURCHASE ORDER FROM THE MOTOR MARKET LOCATED IN WEST DELHI (RETAIL MARKET) PROCURING THE SUPPLIES OF SUCH AUTOMOBILE PARTS FROM THE MOTOR MARKET OF KASHMIRI GATE (WHOLE SALE MARKET) AND DELIVERING THE SAME AT WEST DELHI AGAINST SUCH ORDE RS. BUT IN APRIL/MAY 2008 APPELLANT MET SHRI RAVINDER SINGH KOHLI IN KASHMIRI GATE, WHO WAS DEALING IN AUTOMOBILE RUBBER PARTS. IN THE SAME WAY, APPELLANT WOULD PURCHASE AUTOMOBILE RUBBER PARTS FROM HIM INITIALLY FOR SMALL AMOUNTS A ND SELL THEM IN WEST DELHI. AFTER A FEW MONTHS, SHRI RAVINDER SINGH KOHLI SUGGESTED TO THE APPELLANT THAT HE COULD PURCHASE AUTOMOBILE RUBBER PARTS ON CREDIT FOR BIGG ER AMOUNTS IF HE LEFT HIS SIGNED CHEQUE BOOK WITH HIM AS A SECURITY AGAINST CREDIT PURCHASES MADE BY THE APPELLANT, WHICH IS A COMMON PRACTICE IN THE COMMERCIAL WORLD. AS THE BANK ACCOUNT OF THE APPELLANT NEVER HAD ANY BIG AMOUNTS (AS WOULD BE SE EN FROM THE BANK STATEMENTS FILED HEREWITH FOR SEVERAL YEARS) HE THOUGHT THAT THERE W AS NO RISK BY GIVING SIGNED BLANK CHEQUES OF KOTAK MAHINDRA BANK AND HDFC BANK TO SH. RAVINDER SINGH KOHLI FOR IMPROVING HIS OWN BUSINESS. 3. REVERTING TO THE PAST HISTORY OF THE ISSUE, IT WAS SUBMITTED THE ISSUE WAS REMANDED FOR RECONSIDERING DENOVO AS PROPER FACTS W ERE NOT ADDRESSED BY THE REVENUE AS EVERYTHING POSSIBLE TO SUBSTANTIATE IT S CASE HAD BEEN ITA-6109/DEL/2017 PAGE 3 OF 4 DONE BY THE ASSESSEE. HOWEVER, THE SAID EXERCISE WAS STILL NOT DONE BY THE AO. THE CIT(A) CONSEQUENTLY DIRECTED THE AO TO ISSUE SU MMONS TO SHRI RAVINDER SINGH KOHLI. AT HIS BEHEST, SUMMONS HAD BEEN ISS UED. SHRI KOHLI INITIALLY DENIED KNOWLEDGE AND THEREAFTER ON BEING CO NFRONTED WITH HIS SIGNATURE VERIFYING THE SIGNATURES OF THE ASSESSEE IN THE ACCOUNT OPENING RECORDS WITH THE BANK, HE PLEADED FOR TIME. THE C IT(A) WHILE PASSING THE ORDER WITHOUT CARING TO ADDRESS THE INCONS ISTENT AND INCORRECT STAND OF SHRI RAVINDER SINGH KOHLI CONFIRMED THE ADDITIONS BLA MING THAT THE CONFIRMATORY EVIDENCE TO BE FILED BY THE ASSESSEE WAS NOT FILED. IN THE FACTS OF THE PRESENT CASE IT WAS HER SUBMISSION THAT CON SISTENTLY THE ASSESSEE HAS SAID THAT THE BANK ACCOUNT HAS BEEN MISU SED BY THE SHRI RAVINDER SINGH KOHLI HIS PAN CARD WAS AVAILABLE, WHY IS THE DEPARTMENT HESITANT IN EXAMINING THE RECORD OF SHRI KOHLI. IT WAS HER SUBMISSION THAT SINCE HIS DEPOSITION WAS CRUCIAL TO THE DEPARTMENTS CASE AND HE IS THE WITNESS OF THE DEPARTMENT AND HAS SOUGHT TIME TO PLACE CORRECT FACTS ON RECORD, HOW CAN THE ASSESSEE BE PUT IN A POSITION TO JUST IFY ITS CLAIM. IT WAS HIS SUBMISSION THAT IF THE DEPARTMENT WANTS TO BELIEVE SHR I R.S.KOHLI THEN THEY MUST ADDRESS THE DISCREPANCIES. THE ASSESSEE, IT W AS HER SUBMISSION, HAS BEEN INCORRECTLY BURDENED. ACCORDINGLY IT WAS PRA YED THAT THE ADDITION MAY BE DELETED. 4. LD. SR. DR SHRI S.L. ANURAGI THOUGH CONCEDING THAT T HE PAN DETAILS OF SHRI RAVINDER SINGH KOHLI WERE AVAILABLE STATED THAT HE D ID INITIALLY DENY KNOWING THE ASSESSEE AND DID SEEK TIME TO ADDRESS HOW IMMEDIATELY FUNDS AFTER DEPOSITING IN ASSESSEES BANK ACCOUNT WERE TRANSFE RRED TO HIS ACCOUNT AND THEREAFTER HAS FAILED TO APPEAR. THE FACT THAT IN THE BANK RECORDS, HIS SIGNATURE APPEARED IDENTIFYING THE ASSESSEE WAS ALSO NO T DISPUTED. IN THESE CIRCUMSTANCES IT WAS HIS SUBMISSION THAT THE MATTER MAY BE REMANDED. HOWEVER ADDITION AT THIS STAGE MAY NOT BE DELETED. 5. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. I FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE, REMAND HAD BEEN DIRECTED BY THE ITAT FOR THE SPE CIFIC PURPOSE OF ADDRESSING THE FULL AND CORRECT FACTS. IT IS SEEN THAT AD MITTEDLY THE REMAND DID NOT SERVE ITS PURPOSE AS IN THE SECOND ROUND OF THE PROCEEDINGS BEFORE THE AO, NO EFFORT WAS MADE TO EXAMINE SHRI R.S.KOHLI. ADMITT EDLY THE CIT(A) DIRECTED THE AO IN THE REMAND PROCEEDINGS AT THE APPELLATE STAGE TO SUMMON SHRI RAVINDER SINGH KOHLI U/S 131. ADMITTEDLY SHRI RAVINDER SINGH KOHLI FOR THE VERY FIRST TIME DID APPEAR AND THOUGH IN ITIALLY FLATLY ITA-6109/DEL/2017 PAGE 4 OF 4 DENIED ANY KNOWLEDGE OF THE ASSESSEE, ULTIMATELY ON BEING CONFRONTED WITH DOCUMENTARY EVIDENCES PLEADING THAT ON ACCOUNT OF LAPSE OF EIGHT YEARS HE SOUGHT TIME AND FAILED TO APPEAR ON THE NEXT DATES. IN THE FACTS OF THE PRESENT CASE ALL ALONG THE ASSESSEE HAS SAID THAT THE A SSESSEE MET SH RAVINDER SINGH KOHLI IN APRIL/MAY, 2008 AND HE PERSUADED THE ASSESS EE TO HAND OVER TO HIM UNSIGNED BLANK CHEQUES AND ALSO INTRO DUCED THE ASSESSEE FOR OPENING HIS BANK ACCOUNT IN THE VERY SAME BANK. THUS THE STATEMENT OF SHRI RAVINDER SINGH KOHLI RUNS COUNTER TO T HE FACTS ON RECORD SPECIFIC ATTENTION WAS INVITED TO 156 OF THE PAPER BOOK W HICH WOULD SHOW THAT HE HAD WITNESSED THE SIGNATURE OF THE ASSESSEE IN THE ACCOUNT OPENING FORM TO THE HDFC BANK KASHMIRI GATE BRANCH. THE DENIAL O F KNOWLEDGE OR RECALL OF FACTS ON RECORD NAMELY PAPER BOOK PAGE 156 OF THE PAPER BOOK AND THE RECORD OF IMMEDIATE TRANSFER OF THE FUNDS THEREA FTER TO SHRI R.S.KOHLIS BANK ACCOUNTS ARE FACTS WHICH HAVE SIGNIFICANT IMP ORT AND CANNOT BE EASILY IGNORED. IN THE PECULIAR FACTS AND CIRCUM STANCES OF THE CASE SINCE THE ISSUE IS BEING REMANDED ON THE REQUEST O F THE PARTIES ACCORDINGLY REFRAINING FROM MAKING ANY FURTHER COMMENTS, IT IS DEEMED APPROPRIATE TO SET ASIDE THE CASE BACK TO THE FILE OF CIT(A) WITH A DIRE CTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. WHILE SO DIRECTING, THE IMPORT OF THE ADMITTED FACTS NAMELY THAT THE PAN DETAILS OF SHRI RA VINDER SINGH KOHLI APPEARING AS WITNESS OF THE DEPARTMENT WERE ALL ALONG AVA ILABLE, HE HAS FAILED TO SUBSTANTIATE HIS CLAIM WHICH ADMITTEDLY RAN COUNTE R TO PAGE 156 OF THE PAPER BOOK, IT IS DIRECTED TO BE SPECIFICALLY ADDRESSE D. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27.07. 2018. SD/- (DIVA SINGH) JUDICIAL MEMBER *VEENA/POONAM(CHD) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI