Sri Rajesh Dubey & Ors. L/Rs of Late Sri RC Dubey, Vijayawada V. The ITO, Ward-4, Vijayawada

ITA 647/VIZ/2002

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50248 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-04-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 27-09-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: Y SURYACHANDRA RAO
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 40A(3); 148

Judgement Text

ITA NOS 644 645 AND 647 OF 2002 RAJESH DUBEY & OTHE RS VIJAYAWADA PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NOS.644, 645 & 647/VIZAG/2002 ASSESSMENT YEAR S : 1992 - 93, 1993 - 94 & 1996 - 97 RAJESH DUBEY & OTHERS L/R OF RAM CHANDRA DUBEY, VIJAYAWADA VS. ITO WARD-4, VIJAYAWADA (APPELLANT) PAN NO: ABRPR 8143 H (RESPONDENT) APPELLANT BY: SHRI Y. SURYA CHANDRA RAO, CA RESPONDENT BY: SHRI J. SIRI KUMAR, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: ALL THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE COMMON ORDER DATED 10.06.2002 PASSED BY LEARNED CIT(A), VI JAYAWADA AND THEY RELATE TO THE ASSESSMENT YEARS 1992-93, 1993-94 & 1 996-97. CERTAIN ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATURE. HEN CE THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THE APPEALS RELATING TO ASSESSMENT YEARS 1992- 93 AND 1993-94, FOLLOWING THREE ISSUES ARE URGED: A) VALIDITY OF NOTICE ISSUED UNDER SECTION 148 OF THE ACT B) VALIDITY OF SANCTION GIVEN BY DY.COMMISSIONER OF INCOME TAX UNDER SECTION 151 OF THE ACT. C) ADDITION OF NEGATIVE CASH BALANCE : I) ASSESSMENT YEAR 1992-93 RS. 84,570/- II) ASSESSMENT YEAR 1993-94 RS.1,72,500/- 3. IN THE APPEAL RELATING TO THE ASSESSMENT YEAR 199 6-97, FOLLOWING TWO ISSUES ARE CONTESTED: A) ADDITION OF NEGATIVE CASH BALANCE RS. 10,42,52 0/- B) ADDITION MADE UNDER SECTION 40A(3) RS. 3,28,1 02/- ITA NOS 644 645 AND 647 OF 2002 RAJESH DUBEY & OTHE RS VIJAYAWADA PAGE 2 OF 5 4. AT THE TIME OF HEARING, THE ASSESSEE DID NOT PRE SS THE GROUNDS RELATING TO VALIDITY OF NOTICE ISSUED UNDER SECTION 148 OF THE ACT AND THE VALIDITY OF SANCTION GIVEN BY THE DY.COMMISSIONER O F INCOME TAX UNDER SECTION 151 OF THE ACT. THE ASSESSEE HAS RAISED THE SE TWO ISSUES IN THE APPEALS FILED FOR ASSESSMENT YEARS 1992-93 AND 1993 -94. ACCORDINGLY THE SAID GROUNDS ARE DISMISSED AS WITHDRAWN. 5. THE FACTS RELATING TO THE GROUND RELATING TO ADD ITION OF NEGATIVE CASH BALANCE IN ALL THE 3 YEARS UNDER CONSIDERATION ARE STATED IN BRIEF. A SURVEY WAS CONDUCTED IN THE HANDS OF THE ASSESSEE ON 23-12 -1996. DURING THE COURSE OF SURVEY CERTAIN MANUAL BOOKS MAINTAINED BY THE ASSESSEE WERE FOUND AND IMPOUNDED. IN THE MANUAL BOOKS RELATING T O THE ASSESSMENT YEARS 1992-93 AND 1993-94, THE ASSESSING OFFICER NO TICED THAT CERTAIN PAYMENTS, THOUGH ACCOUNTED FOR IN THE BOOKS, WERE N OT TAKEN INTO ACCOUNT WHILE ARRIVING AT THE CASH BALANCE OF THE DAY I.E. THE SAID PAYMENTS HAVE NOT BEEN DEDUCTED FROM THE AVAILABLE CASH BALANCE. THE AGGREGATE OF SUCH PAYMENTS WAS RS.84,570/- IN THE ASSESSMENT YEAR 199 2-93 AND RS.1,72,500/- IN THE ASSESSMENT YEAR 1993-94. THE A SSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATIONS GIVEN BY THE AS SESSEE AND ACCORDINGLY ADDED THEM IN THE RESPECTIVE YEARS. THE SAID ADDITI ONS WERE CONFIRMED BY THE LEARNED CIT (A). 5.1 IN THE BALANCE ENCLOSED WITH THE RETURN OF INCOM E FOR THE ASSESSMENT YEAR 1996-97, THE CASH IN HAND AS ON 31.3.1996 WAS SHOWN AT RS.11,15,095/-. HOWEVER, IN THE MANUAL BOOK IMPOUN DED DURING THE COURSE OF SURVEY, THE CASH BALANCE AS ON 31.3.1996 STOOD AT RS.72,575/-. ACCORDINGLY THE ASSESSING OFFICER TREATED THE DIFFE RENCE AMOUNT OF RS.10,42,520/- AS UNEXPLAINED INVESTMENT AND ADDED THE SAME. THE SAID ADDITION WAS ALSO CONFIRMED BY THE LEARNED CIT (A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US IN ALL THE THREE YEARS ON THIS ISSUE. ITA NOS 644 645 AND 647 OF 2002 RAJESH DUBEY & OTHE RS VIJAYAWADA PAGE 3 OF 5 6. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE MANUAL BOOKS IMPOUNDED DURING THE COURSE OF SURVEY WERE HA VING MANY MISTAKES AND ERRORS AND HENCE THE ASSESSEE HAS PREPARED FRES H BOOKS THROUGH THE COMPUTERS. THE ASSESSEE ALSO PREPARED A RECONCILIAT ION STATEMENT BY COMPARING THE ENTRIES IN THE MANUAL BOOK AND COMPUT ERIZED BOOK AND THE SAME WAS SUBMITTED BEFORE LEARNED CIT(A). THE EXPLA NATIONS OF THE ASSESSEE AS WELL AS THE RECONCILIATION STATEMENTS W ERE SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCE EDINGS. HOWEVER, THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT (A) FA ILED TO PROPERLY CONSIDER THESE STATEMENTS. THE LEARNED A.R ALSO SOUGHT OUR A TTENTION TO THE PETITION MOVED BY THE ASSESSEE FOR ADMISSION OF CERTAIN ADDI TIONAL EVIDENCES. THE LEARNED A.R SUBMITTED THAT THE ASSESSEE HAS SUBMITT ED THESE ADDITIONAL EVIDENCES IN ORDER TO PROVE CERTAIN ENTRIES AND CON SIDERATION OF THE SAME IS VERY IMPORTANT FOR PROPERLY ADJUDICATING THE IMPUGN ED ISSUE. ACCORDINGLY THE LEARNED AUTHORISED REPRESENTATIVE PRAYED FOR AD MISSION OF THESE ADDITIONAL EVIDENCES AND FURTHER SUBMITTED THAT THE INSTANT ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR CONS IDERING THE SAME AFRESH IN THE LIGHT OF RECONCILIATION STATEMENT, ADDITIONAL E VIDENCES, EXPLANATIONS ETC. FILED BY THE ASSESSEE. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT OBJECT TO THE PLEA MADE BY THE LEARNED AUTHORISED REPRESENTATIVE FOR S ETTING ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE THAT THE ASSESSING OFFICER DID NO T DISCUSS ABOUT THE RECONCILIATION STATEMENTS SUBMITTED BY THE ASSESSEE . IN ADDITION TO THE ABOVE, THE ASSESSEE HAS ALSO SUBMITTED BEFORE US CE RTAIN ADDITIONAL EVIDENCES IN THE FORM OF AFFIDAVITS AND ACCORDING T O THE ASSESSEE, THESE EVIDENCES ARE VERY IMPORTANT IN PROPERLY DISPOSING THE IMPUGNED ISSUE. HENCE, IN THE INTEREST OF NATURAL JUSTICE, WE ADMIT THESE ADDITIONAL EVIDENCES AND WE ARE OF THE VIEW THAT THE IMPUGNED ISSUE HAS TO BE EXAMINED AFRESH IN THE LIGHT OF ABOVE CITED DOCUMEN TS. AS ALREADY STATED, ITA NOS 644 645 AND 647 OF 2002 RAJESH DUBEY & OTHE RS VIJAYAWADA PAGE 4 OF 5 BOTH THE PARTIES HAVE AGREED FOR SETTING ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. IT WAS ALSO BROUGHT TO OUR NOTI CE THAT THE ITAT HAS PASSED ORDERS IN THE ASSESSEES OWN CASE, BUT THE C OPIES OF THE SAID ORDERS WERE NOT PLACED BEFORE US. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) ON THIS ISSUE AND RESTORE THE M ATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE I MPUGNED ISSUE AFRESH IN ACCORDANCE WITH THE LAW BY TAKING INTO CONSIDERATIO N THE EXPLANATIONS OF THE ASSESSEE, THE DOCUMENTS ETC. THAT MAY BE FURNISHED BY THE ASSESSEE. 9. IN THE ASSESSMENT YEAR 1996-97, THE ASSESSEE IS A LSO CONTESTING THE ADDITIONS MADE UNDER SECTION 40A(3) OF THE ACT. BO TH THE PARTIES AGREED THAT THIS ISSUE MAY ALSO BE SET ASIDE TO THE FILE O F THE ASSESSING OFFICER FOR EXAMINING IT AFRESH. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH IN A CCORDANCE WITH THE LAW. 10. THE ASSESSING OFFICER SHOULD ALSO TAKE INTO ACC OUNT THE ORDERS PASSED BY ITAT REFERRED (SUPRA), IN SO FAR AS THE S AME IS RELEVANT TO THE ISSUES UNDER CONSIDERATION. NEEDLESS TO MENTION THE ASSESSEE SHOULD BE GIVEN NECESSARY OPPORTUNITY OF BEING HEARD. 11. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR T HE ASSESSMENT YEARS 1992-93 AND 1993-94 ARE TREATED AS PARTLY ALLOWED F OR STATISTICAL PURPOSES AND THE APPEAL RELATING TO THE ASSESSMENT YEAR 1996 -97 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 3/6/2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 3 RD JUNE, 2011 ITA NOS 644 645 AND 647 OF 2002 RAJESH DUBEY & OTHE RS VIJAYAWADA PAGE 5 OF 5 COPY TO 1 SHRI RAJESH DUBEY L/R OF SHRI RAM CHANDRA DUBEY, PROPRIETOR, CALCUTTA MOTOR STORES, JAWAHAR AUTONAGAR, VIJAYAWAD A 520 007 2 THE ITO WARD-4, VIJAYAWADA 3 4. THE CIT VIJAYAWADA THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM