DILIP K. KAPADIA, MUMBAI V. ITO 17 (1)(4), MUMBAI

ITA 6857/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4645 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Bogus purchase; Principle of natural justice; Set aside
• Section: 143(3); 201; 154

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) I.T.A. NO. 6857 /MUM/ 201 8 (ASSESSMENT YEAR 20 0 8 - 0 9 ) MR. DILIP K. KAPADIA C/O. KESHAVLAL VAJECHAND ABAN HOUSE, 1 ST FLOOR 25/31, ROPEWALK STREET OFF. K. DUBHASH MARG F ORT, MUMBAI - 400 023. PAN : AABPK0349K V S . ITO - 17(1)(4) 1 ST FLOOR AAYAKAR BHAVAN NEW MARINE LINES M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY MS. RUTUJA N. PAWAR DEPARTMENT BY SHR I R. BHOOPATHI DATE OF HEARING 12 . 1 2 . 20 1 9 DATE OF PRONOUNCEMENT 17 . 0 2 . 20 20 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 9.10.2018 PERTAINS TO A.Y. 2008 - 09. 2. G ROUNDS OF APPEAL READ AS UNDER : - 1. THAT ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE OF THE APPELLANT AND IN LAW ID. CIT(A) HAS ERRED IN ACCEPTING THE ORDER PASSED BY ID. ASSESSING OFFICER WITHOUT GOING INTO THE CONTENTIONS PLACED IN THE APPLICATION FOR RECTIFICATION U/S. 154 OF THE ACT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW ID. CIT(A) HAS ERRED IN UPHOLDING THE ORDER O ID. ASSESSING OFFICER WITHOUT GOING IN TO THE MERITS OF THE CASE. 3. THAT THE IMPUGNED ORDER BEING CONTRARY TO LAW, EVIDENCE AND FACTS OF THE CASE MAY K INDLY BE SET ASIDE, AMENDED AND MODIFIED IN THE LIGHT OF THE GROUNDS OF APPEAL ENUMERATED ABOVE AND THE APPELLANT BE GRANTED SUCH RELIEF AS IS CALLED FOR ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW. 4. THAT EACH OF THE GR OUNDS OF APPEAL ENUMERATED ABOVE IS WITHOUT PREJUDICE TO AND INDEPENDENT OF ONE ANOTHER. MR. DILIP K. KAPADIA 2 5. THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO HIMSELF THE RIGHT TO ADD, TO ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE END OF THE HEARING AND TO PRODUCE SUCH FURTHER EVIDENCE, DOCUMENTS AND PAPERS AS MAY BE NECESSARY. 3. BRIEF FACTS OF THE CASE AS NOTED BY LEARNED CIT(A), WHILE DECIDING THE ASSESSEES APPEAL UPON REJECTION OF PETITION U/S. 154 ARE AS UNDER : - THE CHRONOLOGY OF EVENTS LEADING TO A PPEAL IS AS UNDER : - DATE EVENT 25.3.2016 ASSESSMENT COMPLETED. 100% OF VALUE OF ACCOMMODATION ENTRY DISALLOWED ALLEGING IT TO BE BOGUS PURCHASE. 6.4.2016 APPLICATION FILED BEFORE THE ASSESSING OFFICER SEEKING RECTIFI CATION AND REDUCTION OF ABOVE ADDITION. 25.5.2016 ASSESSING OFFICER REJECTS RECTIFICATION APPLICATION STATING IT TO BE OUT OF PURVIEW OF SECTION 154. 16.6.2016 APPEAL AGAINST ORDER UNDER SECTION 154 FILED. TO DISPOSE APPEAL, 2 OTHER THINGS NEED TO BE CONSIDERED. THEY ARE; A. NO APPEAL IS FILED AGAINST REGULAR ASSESSMENT, AND B. THE FORM 35 AND GROUNDS OF APPEAL RELATE TO ORDER UNDER SECTION 154. THE ASSESSMENT ORDER WAS ATTACHED TO FORM 35 AS AGAINST ORDER OF REC T I F ICATI O N. THIS GOT CURED WHEN ORDER UNDER SEC TION 154 WAS FILED ON 04.10.2018 . GROUND 1 STATES THAT RECTIFICATION WAS REJECTED WITHOUT ASSIGNING REASON. I FIND THAT ASSESSING OFFICER HAS RECORDED THAT THE APPEAL IS OUT OF PURVIEW OF SECTION 154. HENCE I HOLD REASONS ARE GIVEN. HENCE THE GROUND IS DISMISSED. GROUND 2 (2, 2.1, 2.2 AND 2.3) DEALS WITH M ERIT OF ADDITION MADE UNDER SECTION U/S. 143(3) R.W. 147 DATED 25.03.2016. THE APPEAL BEFORE ME IS AGAINST ORDER UNDER SECTION F 25.05.2016. DECISION ON MATTERS COVERED B Y F ORMER CANNOT BE ADJUDICATED IN APPEAL LATTER. HENCE I DECLINE TO ADJUDICATE. THE GROUND IS TREATED ON DISMISSED. 4. AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. I HAVE HEARD BOTH THE COUN SE L AND PERUSED THE RECORDS. A READING OF THE ABO VE ORDER OF LEARNED CIT(A) MAKES IT CLEAR THAT CIT(A) HAS DISMISSED THE ASSESSEE'S APPEAL BY NOT GOING INTO THE DETAIL AS TO WHAT WAS THE ISSUE AND HOW THE SAME WAS DEALT WITH BY THE ASSESSING OFFICER. IN THIS REGARD LEARNED MR. DILIP K. KAPADIA 3 DEPARTMENTAL REPRESENTATIVE ACC EPTED THAT WHEN THE AO HAS MENTIONED THAT ASSESSEE IS ENGAGED IN PHARMACEUTICAL BUSINESS HOW CAN THERE BE A DISALLOWANCE FOR DIAMOND PURCHASE IN PROFIT AND LOSS ACCOUNT. THE ABOVE SHOWS THAT THERE IS ABSENCE OF APPLICATION OF MIND. IT IS SETTLED LAW THAT E VEN AD M INISTRATIVE ORDERS HAVE TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE. ACCORDINGLY I REMIT THE ISSUE TO THE FILE OF LEARNED CIT APPEALS. LEARNED CIT APPEALS IS DIRECTED TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY O F BEING HEARD. 6. IN THE RESULT THIS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES ORDER HAS BE EN PRONOUNCED IN THE COURT ON 17 . 2 . 20 20 . SD/ - (SH A MIM YAHYA ) ACCOUNTANT MEMBER MUMBAI ; DATED : 17 / 2 / 20 20 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI