Smt. Rita. B. Parikh, Hyderabad V. ITO, Ward 16(2), Hyderabad

ITA 651/HYD/2014

• Counselvise Citation: 65122514 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Unexplained expenditure; Gift; Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER S.NO. ITA NO. AY APPELLANT RESPONDENT 1. 650/H/14 2007-08 SHRI ANKIT B. PARIKH, HYDERABAD. PAN ABXPB9917 F INCOME-TAX OFFICER, WARD 16(2), HYDERABAD 2. 651/H/14 2007-08 SMT. RITA B. PARIKH, HYDERABAD PAN ACXPB 4165A -DO- 3. 652/H/14 2007-08 SHRI NIKHIL B. PARIKH, HYDERABAD PAN ACJPP5687M -DO- ASSESSEE BY : SHRI K.A. SAI PRASAD REVENUE BY : SHRI RAJAT MITRA DATE OF HEARING 13-08-2015 DATE OF PRONOUNCEMENT 26-08-2015 O R D E R PER SAKTIJIT DEY, J.M.: THESE THREE APPEALS BY THREE DIFFERENT ASSESSEES A RE AGAINST SEPARATE ORDERS OF LD. CIT(A)-V, HYDERABAD, ALL DAT ED 09/12/2013, PERTAINING TO AY 2007-08. SINCE ASSESSEES ARE RELAT ED PARTIES AND FACTS & ISSUES INVOLVED IN ALL THE APPEALS ARE MORE OR LESS COMMON, FOR THE SAKE OF CONVENIENCE THESE APPEALS WERE CLUB BED AND HEARD TOGETHER AND, THEREFORE, DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. ITA NOS.650, 651 & 652/H/14 SHRI ANKIT B. PARIKH AND OTHERS 2 2. THE GROUNDS, WHICH ARE COMMON IN ALL THESE APPEA LS, READ AS UNDER: 1. THE LEARNED COMMISSIONER INCOMETAX (APPEALS) I S NOT JUSTIFIED IN NOT GRANTING ADJOURNMENT SOUGHT FOR O N GROUNDS OF ILL HEALTH OF THE AUTHORIZED REPRESENTATIVE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) OUGHT TO HAVE ALLOWED ANOTHER OPPORTUNITY TO PRODUCE THE NECESSARY EVIDENCE, WHICH COULD NOT BE PRODUCED BEFORE THE A SSESSING OFFICER. 3. FOR THE ABOVE AND ANY GROUND OR GROUNDS THAT MA Y BE PRODUCED DURING THE COURSE OF HEARING, THE HON'BLE APPELLATE TRIBUNAL BE PLEASED TO SET ASIDE THE WHOLE ISSUE T O THE LEARNED ASSESSING OFFICER. 3. AS CAN BE SEEN FROM THE GROUNDS RAISED, ASSESSEE S ARE BASICALLY AGGRIEVED WITH THE DECISION OF LD. CIT(A) IN DISPOSING OF APPEALS WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD. 4. BRIEFLY THE FACTS ARE, THE FIRST ASSESSEE SHRI A NKIT PARIKH IS A DIRECTOR OF THE COMPANY OF M/S PARIKH FABRICATORS P VT. LTD. FOR THE AY UNDER CONSIDERATION, HE FILED HIS RETURN OF INCO ME ON 19/07/2009 DECLARING INCOME OF RS. 3,66,902. AO ON THE BASIS O F THE INFORMATION AVAILABLE WITH HIM FOUND THAT ASSESSEE HAS INVESTED RS. 34,50,000 IN SHARE CAPITAL DURING THE YEAR. ALLEGIN G THAT ASSESSEE HAS NOT EXPLAINED THE SOURCE FOR SUCH INVESTMENT, A O REOPENED ASSESSMENT BY ISSUING A SHOW CAUSE NOTICE U/S 148 O F THE ACT. IN COURSE OF REASSESSMENT PROCEEDING, AS OBSERVED BY A O, WHEN HE CALLED UPON ASSESSEE TO EXPLAIN THE SOURCE OF INVES TMENT IN SHARE CAPITAL AMOUNTING TO RS. 34,50,000, ASSESSEE STATED THAT HE RECEIVED AN AMOUNT OF RS. 30 LAKHS THROUGH WILL AND AN UNSECURED LOAN OF RS. 3,33,064 BESIDES GIFTS RECEIVED OF RS. 2,75,000 WHICH WERE INVESTED IN SHARE CAPITAL. AO, HOWEVER, NOT BE ING SATISFIED WITH THE EXPLANATION OF ASSESSEE ISSUED A SHOW CAUSE NOT ICE STATING THEREIN THAT IN ABSENCE OF PROPER EVIDENCES, ASSESS EES EXPLANATION OF SOURCE OF INVESTMENT CANNOT BE ACCEPTED, HENCE, INVESTMENT IN SHARE CAPITAL WILL BE ADDED AS UNEXPLAINED INVESTME NT. AS NOTED BY AO, IN SPITE OF SUFFICIENT OPPORTUNITY, ASSESSEE DI D NOT APPEAR AND ITA NOS.650, 651 & 652/H/14 SHRI ANKIT B. PARIKH AND OTHERS 3 EXPLAIN THE SOURCE OF INVESTMENT WITH PROPER EVIDEN CES. HE FURTHER FOUND THAT ASSESSEE HAS UTILIZED CREDIT CARD WHILE INCURRING EXPENDITURE OF RS. 3,53,008 WHEREAS HE HAS SHOWN DR AWINGS AT RS. 36,000. IN ABSENCE OF EXPLANATION FROM ASSESSEE, AO TREATED THE AMOUNT OF R. 30 LAKH CLAIMED TO HAVE BEEN RECEIVED THROUGH WILL, RS. 2,75,000 RECEIVED AS GIFT, UNSECURED LOAN OF RS . 3,33,064 AND THE UNEXPLAINED EXPENDITURE OF RS. 3,53,008 AS ASSE SSEES INCOME OF THE YEAR. SIMILARLY IN CASE OF SECOND ASSESSEE S MT. RITA B. PARIKH ALSO, AO FINDING THAT ASSESSEE HAS INVESTED IN SHARE CAPITAL AMOUNTING TO RS. 35 LAKH, SOURCE OF WHICH HAS NOT B EEN EXPLAINED, REOPENED ASSESSMENT U/S 147. IN COURSE OF ASSESSMEN T PROCEEDING, WHILE EXPLAINING THE SOURCE OF INVESTMENT, ASSESSEE SUBMITTED THAT SHE HAS RECEIVED AN AMOUNT OF RS. 40 LAKH THROUGH W ILL AND AN AMOUNT OF RS. 1,50,000 AS GIFT, BUT, AO IN ABSENCE OF PROPER EVIDENCE DISBELIEVED THE EXPLANATION OF ASSESSEE AN D ADDED BACK THE AMOUNT OF RS. 41,50,000. IN RESPECT OF THIRD AS SESSEE SHRI NIKHIL B. PARIKH ALSO, ASSESSMENT WAS REOPENED U/S 147 OF THE ACT ON THE ALLEGATION THAT ASSESSEE HAS NOT EXPLAINED THE SOUR CE OF INVESTMENT OF RS. 34,50,000 IN SHARE CAPITAL DURING THE YEAR. THOUGH, IN COURSE OF REASSESSMENT PROCEEDING, IT WAS SUBMITTED BY ASS ESSEE THAT HE RECEIVED AN AMOUNT OF RS. 30 LAKH THROUGH WILL, RS. 3,15,140 AS UNSECURED LOAN AND RS. 2,75,000 THROUGH GIFT, BUT, AO DISBELIEVING THE CLAIM OF ASSESSEE IN ABSENCE OF PROPER EVIDENCE , ADDED BACK THE ENTIRE AMOUNT OF RS. 35,94,140 TO INCOME OF ASS ESSEE. BEING AGGRIEVED OF THE ASSESSMENT ORDERS SO PASSED, ASSES SEES PREFERRED APPEALS BEFORE LD. CIT(A). 5. AS COULD BE SEEN FROM THE RESPECTIVE ORDERS OF L D. CIT(A) PASSED IN CASE OF ASSESSEES CONCERNED, APPEALS WERE DISPOSED OF EXPARTE BY CONFIRMING THE ADDITIONS MADE BY AO. LD. CIT(A) OBSERVED THAT DESPITE ISSUING NOTICES SINCE THERE W AS NO COMPLIANCE FROM THE ASSESSEES NOR ANY SUBMISSIONS W ERE MADE IN SUPPORT OF THEIR CLAIM, ADDITIONS HAVE TO BE CONFIR MED. BEING AGGRIEVED OF THE RESPECTIVE ORDERS OF LD. CIT(A), A SSESSEES ARE BEFORE US. ITA NOS.650, 651 & 652/H/14 SHRI ANKIT B. PARIKH AND OTHERS 4 6. COMMON ARGUMENTS ADVANCED BY LD. AR IN RESPECT O F THREE ASSESSEES ARE TO THE EFFECT THAT BEFORE AO ASSESSEE S COULD NOT PRODUCE ANY SUPPORTING EVIDENCE AS THEY WERE NOT AB LE TO GET THE CONFIRMATIONS FROM THE CONCERNED PARTIES. AS FAR AS NON- REPRESENTATION BEFORE LD. CIT(A) IS CONCERNED, LD. AR SUBMITTED, WHEN THE MATTER WAS POSTED FOR HEARING, COUNSEL FOR ASSESSEE SOUGHT FOR AN ADJOURNMENT AS BOTH HE AND HIS SON WE RE SUFFERING FROM ILLNESS AND HOSPITALIZED, HE WAS NOT IN A POSI TION TO APPEAR BEFORE LD. CIT(A) FOR REPRESENTING HIS CASES. LD. A R SUBMITTED, FOR THAT REASON ALONE MANY OTHER APPEALS WHERE HE WAS A PPEARING WERE DECIDED EXPARTE DUE TO NON-REPRESENTATION. HOWEVER, THE TRIBUNAL APPRECIATING THE DIFFICULTIES FACED BY LD. AR HAS R ESTORED SOME OF THE ASSESSMENTS BACK TO THE FILE OF AO. IN THIS CON TEXT, HE BROUGHT TO OUR NOTICE AN ORDER PASSED BY THE COORDINATE BEN CH IN CASE OF SRI K.C. SUBBA RAO AND SMT. K. PARVATHI IN ITA NOS. 123 5, 1236 & 1237/HYD/2014, DATED 26/11/2014. LD. AR SUBMITTED, FOR THE VERY SAME REASON, HE COULD NOT APPEAR BEFORE LD. CIT(A) IN CASE OF THE PRESENT ASSESSEES ALSO AND PRODUCE SUPPORTING EVIDE NCES FOR EXPLAINING THE SOURCE OF INVESTMENT BY CONCERNED AS SESSEES. LD. AR SUBMITTED, HOWEVER, ASSESSEES HAVE BEEN ABLE TO OBTAIN NECESSARY SUPPORTING EVIDENCES IN THIS REGARD BY WA Y OF CONFIRMATION AND COPY OF THE WILL AND SOUGHT ADMISS ION OF THE SAME AS ADDITIONAL EVIDENCE. HE SUBMITTED, SINCE ASSESSE ES HAVE BEEN DEPRIVED OF PRODUCING THESE ADDITIONAL EVIDENCES BE FORE THE DEPARTMENTAL AUTHORITIES FOR UNAVOIDABLE REASONS, T HE MATTERS MAY BE REMITTED BACK TO THE FILE OF AO FOR DECIDING AFR ESH AFTER CONSIDERING THE ADDITIONAL EVIDENCES. 7. LD. DR, ON THE OTHER HAND, JUSTIFIED THE ADDITI ONS MADE BY AO AS WELL AS CONFIRMATIONS OF THE SAME BY LD. CIT(A) IN ABSENCE OF PROPER REPRESENTATION BY ASSESSEES DESPITE HAVING B EEN GIVEN SUFFICIENT OPPORTUNITY. ITA NOS.650, 651 & 652/H/14 SHRI ANKIT B. PARIKH AND OTHERS 5 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS ORDERS O F REVENUE AUTHORITIES. AS COULD BE SEEN FROM THE ORDERS OF DE PARTMENTAL AUTHORITIES, ADDITIONS MADE IN CASE OF ALL ASSESSEE S ARE DUE TO THE REASON THAT SOURCE FOR INVESTMENT IN SHARE CAPITAL HAVE NOT BEEN EXPLAINED WITH SUPPORTING EVIDENCE. IN FACT, APPEAL S OF ASSESSEES B3EFORE LD. CIT(A) WERE DECIDED EXPARTE AS NO ONE A PPEARED ON BEHALF OF ASSESSEES. IT HAS BEEN EXPLAINED BY LD. A R BEFORE US, HE COULD NOT APPEAR BEFORE LD. CIT(A) ON THE LAST DATE OF HEARING AND PRODUCE NECESSARY EVIDENCES AS HE WAS SUFFERING FRO M ILLNESS. CONSIDERING THE FACT THAT LD. AR COULD NOT APPEAR B EFORE LD. CIT(A) DUE TO GENUINE DIFFICULTIES, WE TAKE A LIBERAL VIE W IN THE MATTER SIMPLY FOR THE REASON THAT ASSESSEES SHOULD NOT SUF FER FOR LACK OF PROPER REPRESENTATION. AS ADDITIONS HAVE BEEN MADE PURELY ON THE BASIS THAT ASSESSEES COULD NOT PRODUCE SUPPORTING E VIDENCES IN SUPPORT OF THEIR CLAIM OF SOURCE OF INVESTMENT, WHE REAS, BEFORE US LD. AR HAS PRODUCED CERTAIN ADDITIONAL EVIDENCES IN SUPPORT OF SOURCE OF INVESTMENT, WHICH WERE NOT BEFORE THE DEP ARTMENTAL AUTHORITIES, WE ARE INCLINED TO GRANT ONE MORE OPPO RTUNITY TO ASSESSEES CONCERNED FOR EXPLAINING THEIR CASE BEFOR E AO BY PRODUCING NECESSARY EVIDENCES INCLUDING ADDITIONAL EVIDENCES PRODUCED BEFORE US. IN THE AFORESAID VIEW OF THE MA TTER, WE SET ASIDE THE IMPUGNED ORDERS OF LD. CIT(A) AND REMIT T HE MATTERS BACK TO THE FILE OF AO IN RESPECT OF ALL THE AFORESAID A SSESSEES FOR DECIDING THE ISSUE RELATING TO THE ADDITIONS MADE A FTER EXAMINING THE EVIDENCES PRODUCED BY CONCERNED ASSESSEES. AO MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEES IN THE MATTER. SIMILARLY, WE DIRECT ASSESSEES TO COOPERATE WITH AO IN THE MATTER FOR FINALIZING ASSESSMENT PROCEEDING. IN CASE, ASSE SSEES DO NOT COMPLY TO NOTICES ISSUED BY AO OR QUERIES MADE BY H IM, AO IS FREE TO TAKE HIS OWN VIEW ON THE INVESTMENTS MADE BY ASS ESSEES ON THE BASIS OF MATERIALS ON RECORD AND IN ACCORDANCE WITH LAW. WITH AFORESAID OBSERVATIONS, GROUNDS RAISED BY ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.650, 651 & 652/H/14 SHRI ANKIT B. PARIKH AND OTHERS 6 9. IN THE RESULT, ALL THE APPEALS UNDER CONSIDERATI ON ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN ON 26 TH AUGUST, 2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 26 TH AUGUST, 2015 KV COPY TO:- 1) SHRI ANKIT B. PARIKH, 2) SMT. RITA B. PARIKH A ND 3) SHRI NIKHIL B. PARIKH. C/O C/O CH. PARTHASA RATHY & CO., 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST. NO.1, ASHOKNAGAR, HYDERABAD 500 020. 4) INCOME TAX OFFICER, WARD 16(2), HYDERABAD 3) CIT(A)-V, HYDERABAD 4) CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.