Sri.B.Shivakumar, Raichur V. Income Tax Officer, Raichur

ITA 648/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5347 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS
• Assessee Lawyers: V SRINIVASAN
• Keywords: Principle of natural justice
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.648/BANG/2017 ASSESSMENT YEAR : 2009-10 SHRI. B. SHIVAKUMAR, PROP: M/S. SANGAMESHWAR DEPARTMENTAL STORES, M NO. 1-1-55/34/A, LINGASUGUR ROAD, RAICHUR. PAN : ANYPK2987K VS. THE INCOME TAX OFFICER, WARD - 1, RAICHUR. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SMT. SWAPNA DAS, JCIT DATE OF HEARING : 18.05.2017 DATE OF PRONOUNCEMENT : 26.05.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(A) INTERALIA ON FOLLOWING GROUNDS: ITA NO. 648/BANG/2017 PAGE 2 OF 4 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS TH EY ARE AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EV IDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN SUSTAINING T HE ADDITION OF RS.15,40,350/-- BEING THE CASH DEPOSIT MADE IN T HE BANK ACCOUNT IGNORING THE EXPLANATION TENDERED BY THE APPELLANT THAT A SUM OF RS. 11,12,458/- WAS DEPOSITED FROM OUT OF THE COLLECTIONS IN THE KIRANA BUSINESS CARRIED ON FOR WHICH THE APPELLANT HAD ALSO ADMITTED SALES OF RS.11,12,458/- IN THE RE TURN OF INCOME FILED AND THE SAME UNDOUBTEDLY WOULD EXPLAIN THE CASH DEPOSITS MA DE IN THE BANK ACCOUNT OF THE APPELLANT TO THE AFORESAID EXTENT UNDER THE FAC TS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3. THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT T HE APPELLANT HAD RECEIVED A SUM OF RS. 5,53,000/- FROM SRI SUREN DRA BHANDARI OF NAVKAR CHIT FUND PVT.LTD., RAICHUR, AND THE LEARNED A.O. H AD RECORDED A STATEMENT FROM THE SAID PERSON, WHO HAD REPORTEDLY DENIED THE SAME AND THE RELIANCE PLACED ON THE SAID STATEMENT WITHOUT THE SAME BEING CONFRONTED TO THE APPELLANT TO LEAD EVIDENCE AND REBUTTAL WAS BAD IN LAW AND CONSEQUENTLY THE ADDITION TO THE EXTENT OF RS. 5,53,000/- DESERVES T O BE DELETED. 4. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABL E TO BE CHARGED TO INTEREST U/S. 234-A AND 234-B OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND THE LEVY DESERVES TO BE CANCELLED. 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL F OR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE AO HAS M ADE ADDITION OF RS.5,53,000/- RECEIVED FROM SHRI. SURENDRA BHANDARI OF NAVKAR CHI T FUND PVT. LTD., RAICHUR, ON THE BASIS OF THE STATEMENT OF SHRI SURENDRA BHANDAR I RECORDED AFTER SUMMONING UNDER SECTION 131 OF IT ACT HEREINAFTER CALLED THE ACT, AT THE BACK OF THE ASSESSEE. IN THE STATEMENT SHRI. SURENDRA BHANDARI HAS DENIED THE ADVANCEMENT OF THE LOAN TO ITA NO. 648/BANG/2017 PAGE 3 OF 4 THE ASSESSEE BUT THE STATEMENT WAS NEITHER CONFRONT ED TO THE ASSESSEE NOR THE ASSESSEE WAS ALLOWED TO CROSS EXAMINE HIM. THE OTH ER CONTENTIONS OF THE ASSESSEE WITH REGARD TO THE DEPOSIT IN THE BANK WAS ACCEPTED BY THE REVENUE. SINCE THE ADDITION WAS MADE HAVING RELIED UPON THE STATEMENT OF MR. SURENDRA BHANDARI WITHOUT CONFRONTING THE SAME TO THE ASSESSEE, THE A DDITION IS NOT SUSTAINABLE IN THE EYES OF THE LAW. 3. THE LEARNED DR PLACED RELIANCE UPON THE ORDERS O F THE LOWER AUTHORITIES. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES, IN THE LIGHT OF THE RIVAL SUBMISSIONS, I FIND THAT THE ASSESSEE HAS MADE THE DEPOSITS IN THE BANK OF RS.15,40,350/- OUT OF WHICH RS.11,12,458/- WAS CONSIDERED TO BE THE TRADING RECEIPTS AND RECEIPT OF LOAN OF RS.3,08,450/- AS AG RICULTURAL INCOME FROM HIS UNCLE WAS ALSO ACCEPTED BY THE REVENUE. BUT THE RECEIPT OF LOAN OF RS.5,53,000/- FROM SHRI. SURENDRA BHANDARI WAS NOT ACCEPTED HAVING REL IED UPON THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT. BUT THE STA TEMENT WHICH IS A SOLE BASIS OF THE ADDITION WAS NEITHER CONFRONTED TO THE ASSESSEE NOR ANY CROSS EXAMINATION WAS ALLOWED. THESE FACTS DEMONSTRATE THAT THERE IS A V IOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. I AM THEREFORE OF THE VIEW THAT W ITHOUT CONFRONTING THE STATEMENT TO THE ASSESSEE, THE SAME CANNOT BE USED AGAINST THE A SSESSEE. THEREFORE I SET ASIDE THE ORDER OF THE CIT(A) IN THIS REGARD AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH A FTER CONFRONTING THE STATEMENT OF SHRI. SURENDRA BHANDARI TO THE ASSESSEE. IF THE AS SESSEE SEEKS ANY CROSS- ITA NO. 648/BANG/2017 PAGE 4 OF 4 EXAMINATION OF SHRI. SURENDRA BHANDARI, THE SAME MA Y BE ALLOWED TO HIM AND THEREAFTER THE ISSUE MAY BE ADJUDICATED AFRESH IN T HE LIGHT OF THE EVIDENCE COLLECTED DURING THE COURSE OF ENQUIRY. ACCORDINGLY, THE APP EAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE. DATED: 26 TH MAY, 2017. /NSHYLU/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.