M/S. GEMS INTERNATIONAL, MUMBAI V. A.C.I.T.CENT.CIR7, MUMBAI

ITA 6347/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7460 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-02-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 27-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHA AGARWAL
• Assessee Lawyers: SANJUKTA CHOUDHURY; PRAMOD PARIDA
• Keywords: Search and seizure; Opportunity of being heard; Opportunity of cross examination; Third party statement; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI R.K. PAND A ,(AM) ITA NO.6347/MUM/2008 ASSESSMENT YEAR : 2000-01 ITA NO.6348/MUM/2008 ASSESSMENT YEAR : 2002-03 M/S. GEMS INTERNATIONAL 107, SHREE CHAMBERS, 1 ST FLOOR OPP. PRAKASH CHAMBER, OPERA HOUSE MUMBAI-400 004. ..( APPELLANT ) P.A. NO. (AACFG 5346 B) VS. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-7 MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI PRAMOD PARIDA AND MS. SANJUKTA CHOUDHURY RESPONDENT BY : MS. ASHA AGARWAL O R D E R PER D.K. AGARWAL (JM). THESE APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAIN ST SEPARATE ORDERS DT.5.8.2008 PASSED BY THE LD. CIT(A) F OR THE ASSESSMENT YEARS 2000-01 AND 2002-03. SINCE FACTS ARE IDEN TICAL AND GROUNDS ARE COMMON, BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FOR THE SAKE OF BREVITY, THE BRIEF FACTS, EXTRACTED FROM ITA NO.6347/M/08 FOR ASSESSMENT YEAR 2000-01 ARE THAT THE ASSESSEE FIRM ITA NO.6347 & 48/M/08 A.Y:00-01 & 02-03 2 IS ENGAGED IN THE BUSINESS OF DIAMOND EXPORTS. THERE WA S A SEARCH AND SEIZURE U/S.132 OF THE IT ACT, 1961 (THE ACT) ON 20 .10.2005. IN RESPONSE TO NOTICE ISSUED U/S.153A, THE ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF RS.2,576/-. HOWEVER, THE ASSESSMENT WAS COM PLETED AT AN INCOME OF RS.1,21,11,990/- VIDE ORDER DATED 31. 12.2007 PASSED U/S.153A R.W.S. 143(3) OF THE ACT. ON APPEAL, THE LD . CIT(A) PROVIDED VARIOUS OPPORTUNITIES TO THE ASSESSEE. IN THE ABSENCE OF ANY RESPONSE FROM THE ASSESSEE, THE LD. CIT(A) WHILE PASSING EXPARTE ORDER ALLOWED PART RELIEF TO THE ASSESSEE ON THE BASIS OF MATERIAL AVA ILABLE ON RECORD. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE D ENIAL OF SUFFICIENT OPPORTUNITY BY THE LD. CIT(A), SUSTENANCE OF ADDITION U/S.68 RS.44.00 LACS, LICENCE PREMIUM RS.1,76,436/-, INFLATION OF PURCHASE S RS.8,41,246/- AND LEVY OF PENAL INTEREST . 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE A SSESSEE AT THE OUTSET, SUBMITS THAT IN THIS CASE THE AO AND THE LD. CIT( A) HAVE PASSED THE IMPUGNED ORDERS WITHOUT GIVING SUFFICIENT OP PORTUNITY OF BEING HEARD TO THE ASSESSEE TO PRESENT HIS CASE OR TO REVE RT THE THIRD PARTY STATEMENT, THEREFORE, IN THE INTEREST OF JUSTICE, THE ORDER PASSED BY THE AO AND THE LD. CIT(A) BE SET ASIDE AND THE MAT TER MAY BE RESTORED BACK TO THE FILE OF THE AO. ITA NO.6347 & 48/M/08 A.Y:00-01 & 02-03 3 5. ON THE OTHER HAND, THE LD. DR WHILE RELYING ON THE ORDER OF THE AO AND THE LD. CIT(A) SUBMITS THAT SUFFICIENT OPPORTUNI TIES WERE PROVIDED TO THE ASSESSEE BY THE AO AND THE LD. CIT(A), AND THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE LD. CIT(A), THE REFORE, THE ASSESSEE DESERVES NO RELIEF AND, HENCE, THE ORDER PASSED BY THE LD. CIT(A) BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE LD. CIT(A) HAS PROVIDED THREE OPPOR TUNITIES TO THE ASSESSEE BUT THE ASSESSEE HAS MADE NO COMPLIANCE. HOWEVER, KEEPING IN VIEW THAT IT IS A SEARCH CASE WHEREIN THE AO HAS MADE THE ASSESSMENT AT AN INCOME OF RS.1,21,11,990/- AS AGAINST RET URNED INCOME OF RS.2,576/- ONLY, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, ONE MORE OPPORTUNITY BE PROVIDED TO THE ASSESSEE TO REPRESENT HIS CASE BEFORE THE LD. CIT(A) AND ACCORDINGLY WE SET A SIDE THE ORDER PASSED BY THE LD. CIT(A) ON THIS ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF THE LD. CIT(A), WHO SHALL DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE THER EFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.6347 & 48/M/08 A.Y:00-01 & 02-03 4 ITA NO.6348/MUM /08(A.Y.2002-03): 7. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED T HAT THE FACTS, GROUNDS AND THE PLEA TAKEN BY THEM ARE SIMILAR TO TH AT IN ITA NO.6347/M/ 08 IN M/S. GEMS INTERNATIONAL, FOR ASSESSMENT YEAR 2000- 01, THEREFORE, THE ISSUES MAY BE DECIDED ACCORDINGLY. 8. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE KEEPING IN VIEW OF OUR FINDING RECORDED IN PARA -6 OF THIS ORDER RESTORE THE MATTER TO THE FILE OF THE LD. CIT(A) WHO SHALL DECIDE THE SAME AFRESH IN A CCORDANCE WITH THE AFORESAID DIRECTION AND ACCORDING TO LAW AFTER PROV IDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND S TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PU RPOSES. 9. IN THE RESULT, APPEALS STAND PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4.3.2010. SD/- SD/- ( R.K. PANDA ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 4.3.2010. JV. ITA NO.6347 & 48/M/08 A.Y:00-01 & 02-03 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 4.2.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 5.2.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 4.3.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 5.3.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER