ASHOK P. SHAH, MUMBAI V. ITO 14(2)(1), MUMBAI

ITA 6828/MUM/2011

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3427 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 69; 10

Judgement Text

IT A 6828 /MUM/20 11 SHRI ASHOK P SHAH 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI , , BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI RA MIT K OCH AR , ACCOUNTAN T MEMBER IT A 6828/MUM/2011 (ASSESSMENT YEAR: 2008 - 09) SHRI ASHOK P SHAH , C/O. BOMBAY CYCLE CO., 12, INSIDE BHANGWADI, KALBADEVI ROAD, MUMBAI - 400 002 .: PAN: AKMPS 5481 P VS IT O - 14(2) ( 1 ), PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400 051 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NISHIT GANDHI RESPONDENT BY : SHRI GANESH BARE /DATE OF HEARING : 19 - 0 1 - 201 6 / DATE OF PRONOUNCEMENT : 19 - 01 - 2016 ORDER : . . : PER AMIT SHUKLA , JM : THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 13.09.2011 PASSED BY CIT(A) - 25 MUMBAI FOR THE QUANTUM OF ASSESSMEN T PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 2008 - 09 ON VARIOUS GROUNDS: 1.1 THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 25, MUMBAI, 'THE L D. CIT (A).'I ERRED IN PASSING EX - PARTE ORDER U/S. 250 OF THE INCOME TAX ACT, 1961 ('THE ACT') WITHOUT GI VING SUFFICIENT, PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE APPELLANT WHILE PASSING THE ORDER. 1.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE ASSESSMENT ORDER BE HELD AS BAD AND ILLEGAL, HAVING FRAMED IN BREACH OF THE PRINCIPLES OF NATURAL JUSTICE. 2. WITHOUT PREJUDICE TO THE ABOVE: 2.1 THE L D. CIT (A) ERRED IN CONFIRMING THE ACTION OF THE A.O. WHEREBY HE MADE ADDITION OF RS. 7561.000/ - TO THE INCOME OF THE APPELLANT AS ALLEGED UNEXPLAINED INVESTMENT U /S. 69 OF THE ACT. 2.2 WHILE DOING SO, THE L D. CIT (A) ERRED IN: IT A 6828 /MUM/20 11 SHRI ASHOK P SHAH 2 BASING HIS ACTION ONLY ON SURMISES, SUSPICION AND CONJECTURE; TAKING INTO ACCOUNT IRRELEVANT AND EXTRANEOUS CONSIDERATIONS; AND IGNORING RELEVANT MATERIAL AND CONSIDERATIONS AS SUBMITTED BY THE APPELLANT. 2.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 2.4 ASSUMING - BUT NOT ADMITTING - THAT ANY ADDITION WAS CALLED FOR, IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTA NCES OF THE CASE, AND IN LAW, THE COMPUTATION OF THE ADDITION IS NOT IN ACCORDANCE WITH THE LAW. 3. WITHOUT FURTHER PREJUDICE TO THE ABOVE: 3.1 THE L D. CIT (A) ERRED IN CONFIRMING THE ACTION OF THE A.O. IN TREATING THE ENTIRE LONG TERM CAPITAL GAIN, RETUR NED BY THE APPELLANT AND AMOUNTING TO 11,06,617/ - , AS SHORT TERM CAPITAL GAIN OF THE APPELLANT. 3.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CAPITAL GAIN WAS REQUIRED TO BE COMPUTED AS LONG TERM CAPITAL GAIN AND , CONSEQUENTLY, EXEMPT U/S. 10 (38) OF THE ACT, WAS REQUIRED TO BE GRANTED. 3.3 WITHOUT PREJUDICE TO THE ABOVE, ASSUMING - BUT NOT ADMITTING - THAT THE CAPITAL GAIN WAS REQUIRED TO BE COMPUTED AS SHORT TERM CAPITAL GAIN, THE A.O. ERRED IN NOT APPLYING THE APPROPRIATE TAX RATE TO SUCH CAPITAL GAIN. 4.1 THE ID. CIT (A) ERRED IN NOT ADJUDICATING THE GROUND CHALLENGING THE ACTION OF THE A.O. IN NOT GRANTING REBATE U/S. 88 OF THE ACT AS CLAIMED BY THE APPELLANT. 4.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIR CUMSTANCES OF THE CASE, AND IN LAW, THE APPELLANT IS TO BE GRANTED REBATE U/S. 88 AS CLAIMED FOR. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ALL OR ANY THE ABOVE GROUND AT THE TIME OF HEARING . 2. FIRST AND FOREMOST GROUNDS WHICH HAS B EEN RAISED IS THAT, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY PASSING A EX - PARTE ORDER WITHOUT GIVING SUFFICIENT AND PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD ON MERITS. ON MERITS, THE ASSESSEE IS MAINLY AGGRIEVED BY ADDITION OF RS. 75,61,000 / - MADE U/S 69 AS UNEXPLAINED INVESTMENT AND TREATING THE LONG - TERM - CAPITAL - GAIN AMOUNTING TO RS. 11,06,617/ - AS SHORT - TERM - CAPITAL - GAIN. 3. BEFORE US, THE LD. COUNSEL , SHRI NISHIT GANDHI, SUBMITTED THAT, THE FIRST DATE OF HEARING FIXED BY LD. CIT(A) WAS ON 25.07.2011 , ON WHICH DATE THE ASSESSEE HAD MADE REQUEST FOR ADJOURNMENT ON THE GROUND THAT IT REQUIRES SUFFICIENT TIME TO FILE IT A 6828 /MUM/20 11 SHRI ASHOK P SHAH 3 THE DETAILS AND ACCOUNTS AND SO ACCORDINGLY , THE CASE WAS ADJOURNED FOR 17.08.2011 AND AGAIN IT WAS INFORMED THAT IT WOULD NOT BE POSSIBLE TO GATHER THE DETAILS HENCE LONGER DATE SHOULD BE GIVEN. HOWEVER, THE CIT(A) GRANTED A VERY SHORT - ADJOURNMENT FOR 28.03.2011 AND AGAIN ON THE REQUEST OF THE ASSESSEE THE CASE WAS ADJOURNED TO 08.09.2011. HOWEVER, ON THAT DATE, THE ASSESSEE COU LD NOT APPEAR FOR HEARING HENCE THE APPEAL WAS DECIDED EX - PARTE . SO HE SUBMITTED THAT, WITHIN THE SPAN OF 1 MONTHS THE LD. CIT(A) HAS FIXED THREE DATES WITHOUT EXCEEDING TO THE ASSESSEES REQUEST FOR A LONGER DATE SO AS TO ENABLE THE ASSESSEE TO FILE ALL THE REQUISITE DETAILS, BECAUSE THE MAIN ADDITION AS MADE BY THE AO ON THE RECEIPT OF CERTAIN EXTERNAL INFORMATION FOR WHICH THE ASSESSEE REQUIRED NECESSARY DETAILS TO RECONCILE AND ADDUCE PROPER EVIDENCE. THE ASSESSEE OTHERWISE HAD FILED ALL THE DETAILS BE FORE THE AO , WHICH HA S NEITHER BEEN PROPERLY EXAMINED NOR BEEN CONSIDERED IN A RIGHT PERSPECTIVE, THEREFORE, GROSS INJUSTICE HAS BEEN DONE TO THE ASSESSEE. HE REQUESTED THAT THE MATTER SHOULD BE HEARD ON MERITS OR IT SHOULD BE RESTORED BACK TO THE FILE OF THE AO SO THAT PROPER ADJUDICATION CAN BE DONE FROM THE STAGE OF ASSESSMENT. 4. ON THE OTHER HAND, LD. DR SUBMITTED THAT, ON THE LAST DATE OF HEARING, THE ASSESSEE DID NOT APPEAR BEFORE THE CIT(A) THEREFORE THERE WAS NO OPTION LEFT BUT TO DECIDE THE APPEA L ON MERITS. OTHERWISE, THE CIT(A) HAS ALREADY GIVEN FOUR OPPORTUNITIES TO THE ASSESSEE. THUS, IT CANNOT BE HELD THAT REASONABLE OPPORTUNITY HAS NOT BEEN GIVEN . L ASTLY , HE SUBMITTED THAT CIT(A) HAS CONFIRMED THE FINDING OF THE AO ON MERITS. AS AN ALTERNATI VE HE SUBMITTED THAT IF AT ALL THE APPEAL SHOULD BE RESTORED BACK AND THE SAME SHOULD BE SET ASIDE TO THE FILE OF THE CIT(A). 5. AFTER CONSIDERING THE AFORESAID SUBMISSION MADE BY THE PARTIES AND THE OBSERVATIONS MADE IN THE IMPUGNED ORDER, QUA PASSING TH E EX - PARTE ORDER AND OPPORTUNITY OF HEARING GIVEN TO THE ASSESSEE AT THE STAGE OF FIRST APPELLATE PROCEEDINGS, IT IS NOTED THAT IT A 6828 /MUM/20 11 SHRI ASHOK P SHAH 4 LD. CIT(A) HAS GIVEN FOUR OPPORTUNITIES OF HEARING TO THE ASSESSEE STARTING FROM 25.07.2011 TO 08.09.2011. THE ASSESSEES REQUES T BEFORE THE CIT(A) WAS TO GIVE REASONABLE TIME SO AS TO COMPILE THE DETAILS AND DOCUMENTS TO IN SUPPORT OF ITS CASE. IT APPEARS THAT THE LD. CIT(A) WITHIN A GAP OF 1 MONTHS (ONE AND HALF MONTHS) HAS ADJOURNED THE MATTER FOUR TIMES. AT LEAST SOME REASONAB LE OPPORTUNITY OF A LONGER PERIOD SHOULD HAVE BEEN GIVEN IN THE INTER EST OF NATURAL JUSTICE . HOWEVER, WE FIND THE CONDUCT OF THE ASSESSEE TOO WAS NOT JUSTIFIED AS HE DID NOT EVEN APPEAR ON THE DATES SPECIFIED FOR HEARING BY THE CIT(A) . A T LEAST ASSESSEE SH OULD HAVE MADE REQUEST BY FILING AN ADJOURNMENT LETTER OR APPEARING IN PERSON EXPLAINING THE ENTIRE FACTS AND CIRCUMSTANCES. ACCORDINGLY, IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE FEEL THAT THE ENTIRE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT( A) SO THAT THE IMPUGNED ISSUE WHICH HAS BEEN RAISED BEFORE HIM AND ALSO BEFORE US CAN BE DECIDED ON MERITS IN ACCORDANCE WITH THE PROVISIONS OF THE LAW. THUS, WE REMIT THE MATTER TO THE FILE OF THE CIT(A) TO DECIDE ALL THE ISSUES RAISED BEFORE HIM AFRESH A FTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AND ALSO DECIDE THE SAME IN ACCORDANCE WITH THE LAW. THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE WITH THE CIT(A) AND REPRESENT ITS CASE ON THE GIVEN DATE S , AS IT HAS BEEN SUBMITTED BY THE LD. COUNSEL THAT NOW ALL THE DETAILS ARE AVAILABLE ON RECORD. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JANUARY , 201 6. SD/ - SD/ - ( ) ( ) ( RAMIT KOCHAR ) ( AMIT SHUKLA ) ACCOUNTANT ME MBER JUDICIAL MEMBER MUMBAI, DATE: 19 TH JANUARY , 2016 IT A 6828 /MUM/20 11 SHRI ASHOK P SHAH 5 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 25 , MUMBAI . 4 ) THE COMMISSIONER OF INCOME TAX - 14 , MUMBAI . 5 ) , , / THE D.R. A BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS