Smt. Laxmikanta Goyal, Neemuch V. The ITO, Neemuch

ITA 63/IND/2014

• Counselvise Citation: 6322714 RSA 2014
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1999-2000
• Appeal Filed On: 21-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Principle of natural justice; Valuation report; Condonation of delay; Reason to believe
• Section: 148; 144

Judgement Text

SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NOS.61 TO 63/IND/2014 A.YS.1996-97, 1997-98 & 1999-2000 SMT. LAXMIKANTA GOYAL NEEMUCH PAN AIQPG3258F ::: APPELLANT VS INCOME TAX OFFICER NEEMUCH ::: RESPONDENT ITA NOS.64 & 65/IND/2014 A.YS.1996-97 & 1997-98 DINESH KUMAR GOYAL NEEMUCH PAN AIQPG3159E ::: APPELLANT VS INCOME TAX OFFICER NEEMUCH ::: RESPONDENT SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 2 APPELLANT S BY SHRI GIRDHAR GARG RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 11.2. 201 6 DATE OF PRONOUNCEMENT 2 9 . 2 .201 6 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY DIFFERENT ASSESSEES EMANATE FROM THE ORDERS OF THE LEARNED CIT(A), UJJAIN, ALL DATE D 27.12.2012. 2. IN ITA NO. 61/IND/2014 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- (I) FROM THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ASSESSMENT ORDER PASSED BY THE A.O. DATED 29.12.200 6 IS INVALID, VOID AB INITIO AND TIME BARRED AND NOTI CE ISSUED U/S 148/147 DATED 27.05.2005 IS ILLEGAL AND WRONG AND BAD IN LAW . (II) THAT THE A.O. WAS WRONG IN MAKING ADDITION AS UNEXPLAINED CASH CREDIT OF RS.9,24,734/- ON THE BAS IS OF PROJECTED BALANCE SHEET SUBMITTED TO THE BANK . (III) THAT THE A .O. WAS ALSO WRONG IN MAKING ADDITION OF RS.5,95,450/- AS UNEXPLAINED INVESTMENT IN BUILDING CONSTRUCTION THE ADDITION IS ON ESTIMATED BASIS. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 3 (IV) THAT THE LD. A.O. HAS ERRED IN ESTIMATING THE SALES OFRS.21,45,689/- AND NET PROFIT ESTIMATED RS. 1,50,000/- WITHOUT ANY BASIS. (V) THAT THE ORDER PASSED BY THE CIT(APPEAL) DATED 27.12.2012 IS ALSO ILLEGAL AND WRONG. (VI) THAT THE WHOLE OF THE ADDITION OF RS.16,70,184/- IS ILLEGAL EXCESSIVE AND BAD IN LAW. 3. IN ITA NO. 62/IND/2014 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- (I) FROM THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ASSESSMENT ORDER PASSED BY THE A.O. DATED 29.12.200 6 IS INVALID, VOID AB INITIO AND TIME BARRED AND NOTI CE ISSUED U/S 148/147 DATED 27.05.2005 IS ILLEGAL AND WRONG AND BAD IN LAW . (II) THAT THE A.O. WAS WRONG IN MAKING ADDITION AS UNEXPLAINED CASH CREDIT OF RS.1,35,790/- ON THE BAS IS OF PROJECTED BALANCE SHEET SUBMITTED TO THE BANK . (III) THAT THE A .O. WAS ALSO WRONG IN MAKING ADDITION OF RS.7,41,110/- AS UNEXPLAINED INVESTMENT IN BUILDING CONSTRUCTION THE ADDITION IS ON ESTIMATED BASIS. (IV) THAT THE LD. A.O. HAS ERRED IN ESTIMATING THE SALES OF RS.35,21,456/- AND NET PROFIT ESTIMATED RS. 1,70,00 0/- WITHOUT ANY BASIS. (V) THAT THE ORDER PASSED BY THE CIT(APPEAL) DATED 27.12.2012 IS ALSO ILLEGAL AND WRONG. (VI) THAT THE WHOLE OF THE ADDITION OF RS.10,46,900/- IS ILLEGAL EXCESSIVE AND BAD IN LAW. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 4 4. IN ITA NO. 63/IND/2014 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- (I) FROM THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ASSESSMENT ORDER PASSED BY THE A.O. DATED 29.12.200 6 IS INVALID, VOID AB INITIO AND TIME BARRED AND NOTI CE ISSUED U/S 148/147 DATED 27.05.2005 IS ILLEGAL AND WRONG AND BAD IN LAW . (II) THAT THE A.O. WAS ALSO WRONG IN MAKING ADDITIO N OF RS.28,15,977/- AS UNEXPLAINED INVESTMENT IN BUILDIN G CONSTRUCTION THE ADDITION IS ON ESTIMATED BASIS. (III) THAT THE ORDER PASSED BY THE CIT(APPEAL) DATE D 27.12.2012 IS ALSO ILLEGAL AND WRONG. 5. IN ITA NO. 64/IND/2014 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- (I) FROM THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ASSESSMENT ORDER PASSED BY THE A.O. DATED 29.12.200 6 IS INVALID, VOID AB INITIO AND TIME BARRED AND NOTI CE ISSUED U/S 148/147 DATED 27.05.2005 IS ILLEGAL AND WRONG AND BAD IN LAW . (II) THAT THE A.O. WAS WRONG IN MAKING ADDITION OF RS.250000/- ON THE BASIS OF PROJECTED BALANCE SHEET SUBMITTED TO THE BANK AS UNEXPLAINED ADVANCES . (III) THAT THE A .O. WAS ALSO WRONG IN MAKING ADDITION OF RS.240200/- AS UNEXPLAINED INVESTMENT IN BUILDING CONSTRUCTION THE ADDITION IS ON ESTIMATED BASIS. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 5 (IV) THAT THE ORDER PASSED BY THE CIT(APPEAL) DATED 27.12.2012 IS ALSO ILLEGAL AND WRONG BEING NOT ACCEPTING THE LEGAL GROUND RAISED IN FIRST APPEAL. 6. IN ITA NO. 65/IND/2014 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- (I) FROM THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ASSESSMENT ORDER PASSED BY THE A.O. DATED 29.12.200 6 IS INVALID, VOID AB-INITIO AND TIME BARRED AND NOTI CE ISSUED U/S 148/147 DATED 27.05.2005 IS ILLEGAL AND WRONG AND BAD IN LAW . (II) THAT THE A .O. WAS ALSO WRONG IN MAKING ADDITION AS UNEXPLAINED CASH CREDIT OF RS.924734/- AS THE CREDI T SHOWN IN PROJECTED BALANCE SHEET SUBMITTED TO BANK. THE ADDITION OF RS.924734/- PURELY ON PRESUMPTION A ND ON ESTIMATE BASIS . (III) THAT THE LD. A.O. HAS ERRED IN ESTIMATING THE SALES OF RS.2145689/- AND NET PROFIT TAKEN RS. 150000/- WITHOUT ANY BASIS AND WITHOUT CONSIDERING THE FACTS OF THE CASE. THE ADDITION IS PURELY ON ESTIMATE BASIS. (IV) THAT THE ORDER PASSED BY THE CIT(APPEAL) DATED 27.12.2012 IS ALSO ILLEGAL AND WRONG BEING NOT ACCEPTING THE LEGAL GROUND RAISED IN FIRST APPEAL. 7. WE HAVE HEARD BOTH THE SIDES. IN THE CASE OF SMT. LAXMIKANTA GOYAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THE FOLLOWING WRITTEN SUBMISSIONS BEFORE THE TRIBUNAL :- SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 6 THE FACTS IN BRIEF ARE THAT THE APPELLANT I S INDIVIDUAL ASSESSEE. THE ASSESSEE HAS DESIRED TO START BUSINES S ACTIVITY IN FORM OF HOTEL BUSINESS AND FOR THAT PUR POSES SHE HAS APPLIED FOR THE BANK LOAN. TO AVAIL BANK LOAN T HE BANK HAS REQUIRED CERTAIN PAPERS INCLUDED THE PROJECT RE PORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT. THE CONSUL TANT OF THE ASSESSEE HAS PREPARED THE SAME AND SUBMITTED TO THE BANK AND THEREAFTER AVAIL THE LOAN FROM THE BANK. T HE ASSESSEE HAS NOT FILED ITS RETURN OF INCOME, THEREF ORE THE AO HAS REOPEN THE CASE U/S 148 AND FRAME THE ASSESSMENT OF THE ASSESSEE FOR THE ABOVE REFERRED ASSESSMENT YEAR U/S 144 OF THE INCOME TAX ACT. THEREAFTER THE ASSESSEE IS PREFERRED AN APPEAL BEFO RE THE CIT(A), UJJAIN BUT DUE TO NON APPEARANCE THE SAME I S DISMISSED BY THE CIT(A), UJJAIN. THE ASSESSEE FURTH ER FILED AN APPEAL BEFORE THE ITAT, INDORE BENCH INDORE AND THE BENCH HAS SET ASIDE THE CASE AND RESTORE THE MATTER TO THE CIT(A), UJJAIN TO CONSIDER THE MATTER A FRESH AND A LSO DECIDE THE LEGAL ISSUE FOR REOPEN THE CASE U/S 148 OF THE ACT. THE CIT(A) HAS FURTHER NOT DECIDED THE LEGAL M ATTER FOR REOPEN THE CASE U/S 148 OF THE ACT AND DISMISSE D THE APPEAL OF THE ASSESSEE FOR NON APPEARANCE. THE ASSE SSEE HAS FURTHER APPEAL TO THE ITAT, INDORE BENCH INDORE AND THE SAID CASE IS DISMISSED FOR NON APPEARANCE. THE ASSESSEE HAS FILED THE RESTORANCE OF APPEAL AND THE SAME IS ACCEPTED BY THE BENCH AND RESTORE THE APPEAL. TH E ASSESSEE HAS FILED THIS APPEAL IS DELAYED BY 310 DA YS AND FOR CONDONATION OF DELAY AND THE SAME IS ACCEPTED BY THE HONBLE BENCH IN FAVOR OF THE ASSESSEE. THE LD. ASSESSING OFFICER HAS PASSED THE ORDER U/S 1 44 AND ADDED THE ENTIRE CREDITORS, UNSECURED LOANS AND THE REAFTER THE INVESTMENT MADE IN BUILDING IS ALSO ADDED IN TH E INCOME ESTIMATED ON THE TURNOVER SHOWN IN THE PROFI T AND LOSS ACCOUNT ATTACHED WITH THE PROJECT REPORT. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 7 SUBMISSION GROUND NO. 1 CHALLENGE THE REOPENING OF CASES FOR THE ASSESSMENT YEAR 1996-1997, 1997-1998 AND 1999-2000 THE AO HAS RE-OPENED THE CASE OF THE ASSESSEE U/S 1 48 OF THE ACT ON 27.05.2005 FOR THE ASSESSMENT YEAR 1996- 1997 AND 1997-1998 AND ON 30.06.2006 FOR THE ASSESSMENT YEAR 1999-2000 THAT IS BEYOND THE FOUR YEARS FROM T HE END OF THE ASSESSMENT YEAR. AS PER SECTION 148 AO H AS POWER TO REOPEN THE CASE OF THE ASSESSEE ON OR BEFO RE 31 ST MARCH 2001 (FOR THE ASSESSMENT YEAR 1996-1997), 31 ST MARCH 2002 (FOR THE ASSESSMENT YEAR 1997-1998) AND 31 ST MARCH 2004 (FOR THE ASSESSMENT YEAR 1999-2000). ON PLAIN READING OF THE REASONS RECORDED BY THE AO FOR ISSUING NOTICE U/S 148 IT IS FOUND THAT THE AO HAS JUST MENTIONED THE BALANCE SHEET FIGURES AND ON SUSPICIO US HE REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE, OPENING STOCK, LOANS AND INVESTMENT IN BUILDING IS TREATED AS INCOME AND BELIEVE THAT THE SAME IS ESCAPED ASSESSM ENT. THE AO HAS NOT TAKEN THE PRIOR APPROVAL OF THE JCIT FOR ISSUING THE NOTICE U/S 148 OF THE ACT. FROM THE ABOVE AND THE FACTS OF THE CASE THE ACTION TAKEN BY THE AO FOR REOPENING OF THE CASE IS BARRED BY LI MITATION AND BAD IN LAW LIABLE TO QUASH. 1996-1997 BEFORE PASSING THE ORDER OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1996-1997 THE LD. AO HAS NOT CONSIDE RED THE OPENING BALANCES OF THE BALANCE SHEET AS ON 31 ST MARCH 1995. THIS FACT IS ALSO VERIFIABLE FROM THE F ACE OF THE BALANCE SHEET OF THE ASSESSEE FOR THE FINANCIAL YEA R 1995- 1996, ON WHICH THE AO HAS RELIED AND MADE THE ADDIT ION. IF THE SAME HAS BEEN CONSIDERED THERE IS NO UNACCOU NTED MONEY IN THE HAND OF THE ASSESSEE AND THE ONLY ISSU E IS SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 8 LEFT FOR INCOME EARNED FOR THE YEAR I.E. 1,45,687/- . THE AO HAS ESTIMATED THE SAME AT RS. 1,50,000/-. FURTHER THE AO HAS MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BUILDING FOR RS. 5,95,450 /-. SIR, IF THE ENTIRE CREDIT IS ALREADY ADDED IN THE INCOME OF THE ASSESSEE THAN NO FURTHER ADDITION WILL BE MADE IN T HIS HEAD BECAUSE THE SOURCE IS ALREADY ADDED IN THE HAND OF THE ASSESSEE. THE ASSESSEE IS ALSO HAVING CREDITORS OF RS. 1,59,734/- FOR THE SAME BUT THE AO HAS ADDED BOTH T HE AMOUNT IN THE INCOME EARNED BY THE ASSESSEE. ADDITION OF RS, 9,24,734/- ON ACCOUNT OF CREDIT APP EARING IN BALANCE SHEET IN THE NAME OF FAMILY MEMBERS INCL UDING HUSBAND OF THE ASSESSEE (RS. 7,65,000/-) AND SUNDR Y CREDITORS OF RS. 1,59,734/-. PLEASE ALSO NOTE THAT DURING THE FINANCIAL YEAR 1995-1996 THE ASSESSEE HAS NOT RECEIVED ANY FRESH LOAN FROM THE PARTIES MENTIONED IN THE BALANCE SHEET BUT THE SAME HAS BEEN RECEIVED IN EAR LIER YEARS. AS ALLEGATION MADE BY THE AO THAT THE SAID P ERSONS, WHICH ARE FAMILY MEMBERS, ARE NOT IN A POSITION TO GIVE ADVANCE TO THE ASSESSEE AND THIS CONCLUSION IS FRAM ED BY THE AO ON THE BASIS OF THE ENQUIRY MADE BY THE INSP ECTOR. PLEASE NOTE THAT IF THE ENQUIRY WAS MADE BY THE INS PECTOR, THE REPORT OF THE INSPECTOR IS NOT PROVIDED TO THE ASSESSEE TO PROVE ITS CASE THROUGH CROSS EXAMINE THE DEPOSIT ORS. FURTHER THE AO HAS NOT MENTIONED THE SECTION IN WHI CH HE WAS WANT TO ADDED THE SAME. IF THE LOANS ARE NOT TAKEN DURING THE YEAR UNDER CONSIDERATION, THE SAME WILL NOT BE ADDED IN THIS ASSESSMENT YEAR. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE A ND EVIDENCE PLEASE DELETE THE ADDITION MADE BY AO FOR RS. 9,24,734/- ON ACCOUNT OF CREDIT BALANCE IN BALANCE SHEET AND RS. 5,95,450/- ON ACCOUNT OF INVESTMENT IN BUIL DING. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 9 1997-1998 IN THIS YEAR THE AO HAS FURTHER MADE AN ASSESSMENT U/S 144 OF THE ACT. THE AO HAS RELIED ON THE BALANCE SH EET SUBMITTED IN THE BANK ALONG WITH PROJECT REPORT AND MADE ADDITIONS OF INCOME SHOWN IN PROFIT AND LOSS ACCOUN T, INCREASED IN CREDIT BALANCE OF CREDITORS AND INCREA SED IN INVESTMENT IN BUILDING. AO HAS MADE ADDITION OF RS. 1,35,790/- FOR CASHCREDIT THE AO HAS MADE ADDITION ON ACCOUNT OF INCREASE IN SUNDRY CREDITORS BUT NOT VERIFIED THE FACTS THAT IN SUCH CREDITORS THOSE CREDITORS ARE ALSO INCLUDED WHICH A RE RELATED TO THE INVESTMENT IN BUILDING. SINCE THE SA ME IS RELATED TO BUILDING AND NOT FOR BUSINESS THE SAME I S NOT ADDED IN THE HAND OF THE ASSESSEE. FURTHER THE AO HAS MADE ADDITION OF RS. 7,41,110/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BUILDING. S IR, THIS IS ONCE AGAIN THE DIFFERENCE OF OPENING AND CLOSING BALANCE SHOWN IN BALANCE SHEET. SIR, THIS FIGURE IS DULY IN CORPORATE IN THE BALANCE SHEET AND THE SOURCE OF SAID INVESTM ENT IS INCOME EARNED IN THE YEAR UNDER CONSIDERATION, INCR EASE IN CREDITORS AND DECREASED IN THE CURRENT ASSETS. THE TOTAL AMOUNT OF INVESTMENT MADE DURING THE YEAR UNDER CONSIDERATION IS ALREADY REFLECTED IN THE BALANCE S HEET ITSELF. THE ASSESSEE HAS HAVING THE SOURCE FOR THE SAME AND THE SAME IS ALREADY OFFERED FOR TAX IN THIS YEA R AS WELL AS IN LAST YEAR THAN NO FURTHER ADDITION WILL BE M ADE IN THIS HEAD BECAUSE THE SOURCE IS ALREADY ADDED IN TH E HAND OF THE ASSESSEE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE A ND EVIDENCE PLEASE DELETE THE ADDITION MADE BY AO FOR RS. 1,35,790/- ON ACCOUNT OF CREDIT BALANCE IN BALANCE SHEET AND RS. 7,41,110/- ON ACCOUNT OF INVESTMENT IN BUIL DING. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 10 ASSESSMENT YEAR 1999-2000 THE LD ASSESSING OFFICER FURTHER PASSED ORDER U/S 14 4 OF THE ACT AND MADE THE ADDITIONS AS UNDER: 01. RS. 1,00,000/- THE AO HAS MADE AN ADDITION OF RS. 1,00,000/- ON TH E ESTIMATED SALES OF RS. 20,00,000/- IN-SPITE OF THE FACTS THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESS EE IS NOT DOING ANY BUSINESS. THE AO HAS MADE GUESS WORK AND ASSUMED THAT IF THERE IS BUSINESS IN THE LAST YEAR THERE IS BUSINESS IN THE CURRENT YEAR AND ESTIMATED THE SALE IN COMPARE TO LAST YEAR AND ALSO ESTIMATE THE INCOME F ROM SUCH BUSINESS. IF THERE IS NO BUSINESS THE AO HAS BOUND TO ACCEPT THE SAME OTHERWISE HE BROUGHT OUT ANY COGENT MATERIAL O N RECORD TO PROVE ITS CONTENTION THAT THE ASSESSEE HA S DOING BUSINESS IN PARTICULAR YEAR I.E. YEAR UNDER CONSIDE RATION. IN THIS CASE THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE HAS DOING THE BUS INESS IN THE YEAR UNDER CONSIDERATION. THE ESTIMATION OF THE AO IS ONLY ON SUSPICIOUS NOT ON THE BASIS OF MATERIAL. 02. THE LD AO HAS FURTHER ADDED A SUM OF RS. 28,15,977/- IN THE INCOME OF THE ASSESSEE ON ACCOUN T OF UNEXPLAINED INVESTMENT IN BUILDING. THE AO HAS RELI ED UPON THE VALUATION REPORT DONE BY THE DEPARTMENTAL VALUER AND ASSUMED THAT THE ASSESSEE HAS CONSTRUCTED THE S AME IN TWO FINANCIAL YEAR I.E 1997-1998 AND 1998-1999 A ND BIFURCATE THE SAME IN 50:50 RATIO. THEREAFTER HE AS SUMED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESS EE HAS INVESTED A SUM OF RS. 30,15,977/- IN THE BUILDING. THE AO HAS MENTIONED IN THE ORDER ITSELF THAT THE ASSESSEE HAS TAKEN LOAN OF RS. 22,80,895/- FROM CO OPERATIVE BAN K AND ALSO MENTIONED THAT THE ASSESSEE HAS TAKEN BANK LOA N OF RS. 15,00,000/- DURING THE PERIOD FROM 20.01.1998 T O 13.05.1998 AND OUT OF THIS ONLY 2,00,000/- IS UTILI ZED FOR THE PURPOSES OF BUILDING CONSTRUCTION HENCE THE SOU RCE OF SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 11 RS. 2,00,000/- IS ACCEPTED AND THE BALANCE AMOUNT I S ADDED TO THE INCOME OF THE ASSESSEE. THE AO HAS NOT MENTIONED THE TREATMENT OF THE REMAINING BANK LOAN AMOUNT OF RS. 7,80,895/-. PLEASE NOTE THAT THE AO ITSELF HAS ASSESSED THE INC OME OF THE ASSESSEE FOR THE LAST THREE YEARS AND MADE AN A DDITION ON ACCOUNT OF INVESTMENT IN BUILDING AS UNDER: ASSESSMENT YEAR AMOUNT 1995-1996 (OPENING BALANCE) 89,900/- 1996-1997 5,95,450/- 1997-1998 7,41,110/- 1998-1999 30,15,977/- 1999-2000 2,00,000/- BALANCE LOAN AMOUNT 7,80,895/- TOTAL 54,23,332/- ON THE PERUSAL OF THE ABOVE IT IS CLEAR THAT THE AS SESSEE HAS STARTED ITS CONSTRUCTION ACTIVITIES IN THE FINA NCIAL YEAR 1994-1995 AND TILL THE 1998-1999 SHE IS UTILIZED A SUM OF RS. 54,23,332/- TOWARDS BUILDING. THE ESTIMATION OF AO THAT THE ASSESSEE HAS CONSTRUC TED THE SAME IN TWO YEARS I.E. 1997-1998 AND 1998-1999 IS BASELESS BECAUSE THE AO HIMSELF MADE ADDITIONS IN T HE YEAR OTHER THAN MENTION IN THE ORDER I.E. 1994-1995 TO 1996-1997. THE REPORT OF THE DEPARTMENTAL VALUER IS ALSO NOT A CCURATE THOUGH AND THE VALUER IS VALUED THE SAME ON THE BAS IS OF THE YEAR OF CONSTRUCTION I.E. FINANCIAL YEAR 1997-1 998 AND 1998-1999 AND OBVIOUSLY IN THE LATTER YEARS COST OF CONSTRUCTION IS TAKEN HIGHER THAN THE COST OF 1994- 1995. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 12 LOOKING TO THE FACT AND THE CIRCUMSTANCES OF THE CAS E AND THE ADDITION MADE BY THE AO IN EARLIER YEARS THE SA ME IS PROVE THE CONTRADICTION IN THE VALUER REPORT AND TH E CONTENTION OF THE AO. THE ASSESSEE HAS ALSO HAVING VALUATION REPORT FROM THE REGISTERED VALUER DULY REGISTERED UNDER WEALTH TAX ACT. THE SAME IS MUCH BELOW THE AMOUNT ESTIMATED BY THE DEPARTMENT VALUER. WE REQUEST YOU TO PLEASE ACCEPT THE VALUATION REPORT OF WEALTH TAX APPROVED VALUER TAKE N BY THE ASSESSEE FOR VALUATION PURPOSES AND DELETE THE ADDITION MADE BY THE AO FOR RS. 28,15,977/- 8. IN THE CASE OF DINESH GOYAL, THE LD. COUNSEL FOR T HE ASSESSEE HAS SUBMITTED THE FOLLOWING WRITTEN SUBMISSI ONS BEFORE THE TRIBUNAL :- ASSESSMENT YEAR 1996-1997 AND 1997-1998 APPEAL NO.IT- 64-65/2014 FACTS : - THE FACTS IN BRIEF ARE THAT THE APPELLANT IS INDIVI DUAL ASSESSEE. THE ASSESSEE HAS DESIRED TO START BUSINES S ACTIVITY IN THE NAME OF HIS WIFE SMT LAXMIKANTA GOYA L IN FORM OF HOTEL BUSINESS AND FOR THAT PURPOSES SHE HAS APPLIED FOR THE BANK LOAN. TO AVAIL BANK LOAN T HE BANK HAS REQUIRED CERTAIN PAPERS INCLUDED THE PROJE CT REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT. TH E CONSULTANT OF THE ASSESSEE HAS PREPARED THE SAME AN D SUBMITTED TO THE BANK AND THEREAFTER AVAIL THE LOAN FROM THE BANK. THE ASSESSEE HAS NOT FILED ITS RETUR N OF INCOME, THEREFORE THE AO HAS REOPEN THE CASE U/S 14 8 AND FRAME THE ASSESSMENT OF THE ASSESSEE FOR THE ABOVE REFERRED ASSESSMENT YEAR U/S 144 OF THE SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 13 INCOME TAX ACT. THEREAFTER THE ASSESSEE IS PREFERRE D AN APPEAL BEFORE THE CIT(A), UJJAIN BUT DUE TO NON APPEARANCE THE SAME IS DISMISSED BY THE CIT(A), UJJAIN. THE ASSESSEE FURTHER FILED AN APPEAL BEFORE THE ITAT, INDORE BENCH INDORE AND THE BENCH HAS SET ASIDE THE CASE AND RESTORE THE MATTER TO THE CIT(A) , UJJAIN TO CONSIDER THE MATTER A FRESH AND ALSO DECI DE THE LEGAL ISSUE FOR REOPEN THE CASE U/S 148 OF THE ACT. THE CIT(A) HAS FURTHER NOT DECIDED THE LEGAL MATTER FOR REOPEN THE CASE U/S 148 OF THE ACT AND DISMISSE D THE APPEAL OF THE ASSESSEE FOR NON APPEARANCE. THE ASSESSEE HAS FURTHER APPEAL TO THE ITAT, INDORE BEN CH INDORE AND THE SAID CASE IS DISMISSED FOR NON APPEARANCE. THE ASSESSEE HAS FILED THE RESTORANCE O F APPEAL AND THE SAME IS ACCEPTED BY THE BENCH AND RESTORE THE APPEAL. THE ASSESSEE HAS FILED THIS APP EAL IS DELAYED BY 310 DAYS AND FOR CONDONATION OF DELA Y AND THE SAME IS ACCEPTED BY THE HONBLE BENCH IN FAVOR OF THE ASSESSEE. THE LD. ASSESSING OFFICER HAS PASSED THE ORDER U/S 1 44 AND ADDED THE ENTIRE CREDITORS, UNSECURED LOANS AND THEREAFTER THE INVESTMENT MADE IN BUILDING IS ALSO ADDED IN THE INCOME ESTIMATED ON THE TURNOVER SHOWN IN THE PROFIT AND LOSS ACCOUNT ATTACHED WITH THE PROJECT REPORT. SUBMISSION GROUND NO. 1 CHALLENGE THE REOPENING OF CASES FOR THE ASSESSMENT YEAR 1996-1997, 1997-1998 THE AO HAS RE-OPENED THE CASE OF THE ASSESSEE U/S 148 OF THE ACT ON 27.05.2005 FOR THE ASSESSMENT YEA R 1996-1997 AND 1997-1998 THAT IS BEYOND THE FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. AS PER SECTION 148 AO HAS POWER TO REOPEN THE CASE OF THE SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 14 ASSESSEE ON OR BEFORE 31 ST MARCH 2001 (FOR THE ASSESSMENT YEAR 1996-1997), 31 ST MARCH 2002 (FOR THE ASSESSMENT YEAR 1997-1998). ON PLAIN READING OF THE REASONS RECORDED BY THE AO FOR ISSUING NOTICE U/S 148 IT IS FOUND THAT THE AO HAS JUST MENTIONED THE BALANCE SHEET FIGURES AND ON SUSPICIOUS HE REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE, OPENING STOCK, LOANS AND INVESTMENT IN BUILDING IS TREATED AS INCOME AND BELIEVE THAT THE SAME IS ESCAPED ASSESSMENT. THE AO HAS NOT TAKEN THE PRIOR APPROVAL OF THE JCIT FOR ISSUING THE NOTICE U/S 148 OF THE ACT. FROM THE ABOVE AND THE FACTS OF THE CASE THE ACTI ON TAKEN BY THE AO FOR REOPENING OF THE CASE IS BARRED BY LIMITATION AND BAD IN LAW LIABLE TO QUASH. 1996-1997 PLEASE NOTE THAT THE ASSESSEE IS NOT DOING ANY BUSINESS AND ONLY DO THE SAREE BUSINESS IN THE NAME OF HIS WIFE SMT LAXMIKANTA GOYAL. TO AVAIL THE LOAN FROM BANK THE CONSULTANT OF THE ASSESSEE HAS PREPARED BALANCE SHEET FOR THE ASSESSMENT YEAR 1997-1998 AND 1998-1999 AND SUBMITTED TO THE BANK. THE LD AO HAS MADE THE ADDITIONS ON THE BASIS OF SAID BALANCE SHEET. THE AO HAS MADE AN IDENTICAL ADDITION OF RS. 1,45,687/- MADE IN THE CASE OF ASSESSEES WIFE. FURTHER THE AO HAS MADE AN ADDITIO N OF RS. 2,50,000/- ON ACCOUNT OF ADVANCE GIVEN TO HI S WIFE ( SAME ADDITION OF RS. 2,50,000/- WERE MADE IN HIS WIFE ACCOUNT). THE AO HAS FURTHER ADDED A SUM O F RS. 2,40,200/- ON ACCOUNT OF UNEXPLAIN INVESTMENT I N BUILDING, IN-SPITE OF THE FACTS THAT THE ASSESSEE I S NOT HAVING ANY BUILDING. SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 15 WHAT HAPPEN IN THIS CASE THAT THE COUNCIL OF THE ASSESSEE HAS JUST PREPARED THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF BOTH THE ASSESSEE I.E. LAXMIKANTA GOYAL AND DINESH GOYAL TO AVAIL THE LOAN FROM BANK. HE JUST PREPARED THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF SMT. LAXMIKANTA GOYAL FO R THE ASSESSMENT YEAR 1996-1997 AND 1997-1998 AND THE SAME BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF SMT. LAXMIKANTA GOYAL IS CONVERTED IN THE CASE OF DINESH GOYAL AS PREPARED FOR THE ASSESSMENT YEAR 1997-1998 AND 1998-1999. PLEASE SEE PAGE 4 TO 7 OF THE PAPER BOOK IN WHICH PAGE NO. 4 IS RELATED TO SMT. LAXMIKANTA GOYAL AND PERTINENT TO FINANCIAL YEAR 1996-1997 I.E. ASSESSME NT YEAR 1997-1998, THE SAME HAS BEEN CONVERTED IN THE NAME OF THE ASSESSEE FOR THE FINANCIAL YEAR 1997-19 98 I.E. ASSESSMENT YEAR 1998-1999(PAGE NO. 6). PLEASE VERIFY THE SAME IN BOTH THE BALANCE SHEET AND PROFI T & LOSS ACCOUNT ALL THE AMOUNTS ARE SAME ONLY NAME OF THE ASSESSEE IS CHANGED AND THE PERIOD IS ALSO CHANGED. PLEASE SEE PAGE 4 TO 7 OF THE PAPER BOOK IN WHICH PAGE NO. 5 IS RELATED TO SMT. LAXMIKANTA GOYAL AND PERTINENT TO FINANCIAL YEAR 1997-1998 I.E. ASSESSME NT YEAR 1998-1999, THE SAME HAS BEEN CONVERTED IN THE NAME OF THE ASSESSEE FOR THE FINANCIAL YEAR 1998-19 99 I.E. ASSESSMENT YEAR 1999-2000. PLEASE VERIFY THE SAME IN BOTH THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT ALL THE AMOUNTS ARE SAME ONLY NAME OF THE ASSESSEE IS CHANGED AND THE PERIOD IS ALSO CHANGED. ON THE PERUSAL OF THE ABOVE IT IS PROVE THAT BOTH T HE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE ASSESSMENT YEAR 1998-1999 AND 1999-2000 IS PREPARED AND SUBMITTED TO THE BANK TO AVAIL LOAN ON LY. THE AO HAS MADE THE ADDITIONS IN THE HAND OF THE ASSESSEES WIFE AND THE SAME CANNOT BE FURTHER ADDE D SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 16 IN THE ASSESSEES HAND SINCE THE SAME WILL BE DOUBL E TAXATION ON SINGLE AMOUNT. ESTIMATION OF PROFIT OF RS. 37,500/- BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE ASSESSMENT YEAR 199 7- 1998 THE AO HAS ASSUMED THAT THE ASSESSEE WAS IN BUSINESS IN THE LAST YEAR I.E ASSESSMENT YEAR 1996- 1997 AND ESTIMATE THE SALES FOR RS. 3,75,000/- ANS ESTIMATED THE NET PROFIT AT 37,500/- I.E. 10% OF TH E ESTIMATED SALES AND ON THIS BASIS MADE ADDITION LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND EVIDENCE PLEASE DELETE THE ENTIRE ADDITION MADE BY AO FOR RS. 6,73,387/- ON ACCOUNT OF DUPLICATION OF INCOME. 1997-1998 IN THIS YEAR THE AO HAS FURTHER MADE AN ASSESSMENT U/S 144 OF THE ACT. THE AO HAS RELIED ON THE BALANC E SHEET SUBMITTED IN THE BANK ALONG WITH PROJECT REPO RT AND MADE ADDITIONS OF INCOME SHOWN IN PROFIT AND LOSS ACCOUNT, INCREASED IN CREDIT BALANCE OF CREDIT ORS AND INCREASED IN INVESTMENT IN SHARES. AO HAS MADE ADDITION OF RS. 1,70,000/- FOR BUSINESS INCOME THE AO HAS MADE ADDITION ON ACCOUNT OF ESTIMATING THE BUSINESS INCOME OF THE ASSESSEE ON THE BASIS OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT SUBMITTED I N BANK. THE BASE OF THE SAME IS CONVERTED MEANS BALANCE SHEET OF THE LAXMIKANTA GOYAL IS RENAMED IN THE ASSESSEES NAME FOR DIFFERENT ASSESSMENT YEAR. SINCE THERE IS NO BUSINESS IN THE NAME OF THE ASSES SEE PLEASE DELETE THE SAME. AO HAS MADE ADDITION OF RS. 1,35,790/- FOR CASHCREDIT SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 17 THE AO HAS MADE ADDITION ON ACCOUNT OF INCREASE IN SUNDRY CREDITORS ON THE BASIS OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT SUBMITTED IN BANK. THE BASE O F THE SAME IS CONVERTED MEANS BALANCE SHEET OF THE LAXMIKANTA GOYAL IS RENAMED IN THE ASSESSEES NAME FOR DIFFERENT ASSESSMENT YEAR. SINCE THERE IS NO BUSINESS IN THE NAME OF THE ASSESSEE PLEASE DELETE THE SAME. FURTHER THE AO HAS MADE ADDITION OF RS. 7,41,110/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BUILDING. SIR, THE AO HAS MADE ADDITION ON ACCOUNT OF INCREASE IN INVESTMENT IN BUILDING ON THE BASIS OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT SUBMITTED I N BANK. THE BASE OF THE SAME IS CONVERTED MEANS BALANCE SHEET OF THE LAXMIKANTA GOYAL IS RENAMED IN THE ASSESSEES NAME FOR DIFFERENT ASSESSMENT YEAR. SINCE THERE IS NO BUILDING IN THE NAME OF THE ASSES SEE PLEASE DELETE THE SAME. AS MENTIONED HERE IN ABOVE IN THIS CASE THAT THE COUNCIL OF THE ASSESSEE HAS JUST PREPARED THE BALAN CE SHEET AND PROFIT AND LOSS ACCOUNT OF BOTH THE ASSES SEE I.E. LAXMIKANTA GOYAL AND DINESH GOYAL TO AVAIL THE LOAN FROM BANK. HE JUST PREPARED THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF SMT. LAXMIKANTA GOYAL FOR THE ASSESSMENT YEAR 1996-1997 AND 1997-1998 AND THE SAME BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF SMT. LAXMIKANTA GOYAL IS CONVERTED IN THE CASE OF DINESH GOYAL AS PREPARED FOR THE ASSESSMENT YEAR 1997-1998 AND 1998-1999. PLEASE SEE PAGE 4 TO 7 OF THE PAPER BOOK IN WHICH PAGE NO. 4 IS RELATED TO SMT. LAXMIKANTA GOYAL AND PERTINENT TO FINANCIAL YEAR 1996-1997 I.E. ASSESSME NT YEAR 1997-1998, THE SAME HAS BEEN CONVERTED IN THE NAME OF THE ASSESSEE FOR THE FINANCIAL YEAR 1997-19 98 I.E. ASSESSMENT YEAR 1998-1999(PAGE NO. 6). PLEASE VERIFY THE SAME IN BOTH THE BALANCE SHEET AND PROFI T & SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 18 LOSS ACCOUNT ALL THE AMOUNTS ARE SAME ONLY NAME OF THE ASSESSEE IS CHANGED AND THE PERIOD IS ALSO CHANGED. PLEASE SEE PAGE 4 TO 7 OF THE PAPER BOOK IN WHICH PAGE NO. 5 IS RELATED TO SMT. LAXMIKANTA GOYAL AND PERTINENT TO FINANCIAL YEAR 1997-1998 I.E. ASSESSME NT YEAR 1998-1999, THE SAME HAS BEEN CONVERTED IN THE NAME OF THE ASSESSEE FOR THE FINANCIAL YEAR 1998-19 99 I.E. ASSESSMENT YEAR 1999-2000. PLEASE VERIFY THE SAME IN BOTH THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT ALL THE AMOUNTS ARE SAME ONLY NAME OF THE ASSESSEE IS CHANGED AND THE PERIOD IS ALSO CHANGED. ON THE PERUSAL OF THE ABOVE IT IS PROVE THAT BOTH T HE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE ASSESSMENT YEAR 1998-1999 AND 1999-2000 IS PREPARED AND SUBMITTED TO THE BANK TO AVAIL LOAN ON LY. THE AO HAS MADE THE ADDITIONS IN THE HAND OF THE ASSESSEES WIFE AND THE SAME CANNOT BE FURTHER ADDE D IN THE ASSESSEES HAND SINCE THE SAME WILL BE DOUBL E TAXATION ON SINGLE AMOUNT. SINCE THE ASSESSEE IN NOT ENGAGED IN ANY BUSINESS AND THE ASSESSEE IS NOT HAVING ANY BUILDING IN ITS NAME AND THE ENTIRE AMOUNT OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT IS ALREADY INCLUDED IN HIS WI FE CASE IT IS PRAYED THAT PLEASE DELETE THE ENTIRE ADD ITION MADE IN BOTH THE APPEALS. 9. AFTER HEARING BOTH THE SIDES, WE FIND THAT IN THES E CASES THE AO HAS MADE THE ASSESSMENTS U/S 144 OF THE IT ACT. BEFORE THE LEARNED CIT(A) ALSO THERE WAS NO REPRESENTATION ON BEHALF OF THE ASSESSEE. THE LEARNED SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 19 CIT(A), THEREFORE, DECIDED THE APPEALS WITHOUT HEARING THE ASSESSEES. WE ARE, THEREFORE, OF THE VIEW THAT SINCE B OTH THE AUTHORITIES BELOW HAVE DECIDED THE MATTER WITHOUT HEARI NG THE ASSESSEES, IN VIEW OF PRINCIPLE OF NATURAL JUSTICE AND FAIR PLAY, THESE APPEALS NEED TO BE RESTORED TO THE FI LE OF THE AO FOR DECIDING THE SAME AFTER PROVIDING DUE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEES. WE, THEREFORE, RESTOR E THESE APPEALS TO THE FILE OF THE AO TO MAKE FRESH ASSESSMENTS AFTER PROVIDING THE ASSESSEES DUE OPPORTUNITY OF BEIN G HEARD. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 29.2. 2016 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED - 29.2.2016 DN/- SMT. LAXMIKANT GOYAL & DINESH GOYAL ITA NOS. 61 TO 63/IND/2014 & 64 & 65/IND/2014 20