Shri Chetna Amit Deshmukh, Baroda V. The Income tax Officer,Ward-1(2), Baroda

ITA 686/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9718 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K
• Keywords: Unexplained investment; Salary income; Opportunity of being heard; Bonafide belief; Additional evidence
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 686/AHD/2011 & 1117/AHD/2013 / ASSESSMENT YEAR: 2006-07 CHETNA AMIT DESHMUKH, 62, VRAJ SHANTI, VISHWAS COLONY, ALKAPURI, BARODA .. APPELLANT PAN : AIGPD 3323 D VS INCOME TAX OFFICER, WARD-1(2) BARODA .. RESPONDENT ASSESSEE(S) BY : SHRI TUS HAR P. HEMANI , AR REVENUE BY : SHRI A.K. PANDAY, SR - DR / DATE OF HEARING 08/12/2015 /DATE OF PRONOUNCEMENT 01/02/2016 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THE APPEAL IN ITA NO. 686/AHD/2011 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A )-I, BARODA DATED 29.12.2010 FOR ASSESSMENT YEAR 2006-07 AND T HE APPEAL IN ITA NO. 1117/AHD/2013 FILED BY THE ASSESS EE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX ITA NO. 686/AHD/2011 CHETNA AMIT DESHMUKH VS. ITO AY 2006-07 - 2 - (APPEALS)-IV, BARODA IN CONFIRMING THE PENALTY U/S 271(1)(C) LEVIED BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2006-07. ITA NO. 686/AHD/2011 : AY 2006-07 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWIN G GROUNDS:- 1. THE ORDER PASSED U/S 143(3) R.W.S 144 OF THE ACT IS BAD IN LAW. 1.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLANTS CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING GROUND NO.1 AS PRAYED IN GROUNDS OF APPEAL THAT THE ORDER PASSED U/S 143(3) R.W.S. 144 OF THE ACT IS BAD IN LAW. 1.2 YOUR APPELLANT PRAYS YOUR HONOUR TO HOLD SO NOW AND TREAT THE PROCEEDINGS AS BAD IN LAW. 2. CONFIRMATION OF ADDITION TO THE TUNE OF RS.35,0 0,000/- AS UNEXPLAINED INVESTMENT. 2.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLA NTS CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION TO THE TUNE OF RS.35,00,000/- A S UNEXPLAINED INVESTMENT ALTHOUGH NECESSARY DETAILS THEREOF WERE FURNISHED. 2.2 THE LD. CIT(A) HAS ERRED IN NOT TAKING INTO CONSIDERATION FACT THAT THE INVESTMENT TO THE TUNE OF RS.5,00,000/- IN HDFC MUTUAL FUND, OUT OF TOTAL INVESTMENT TO THE TUNE OF RS.35,00,000/- IS OWNED BY AMIT DESHMUKSH (FAMILY MEMBER) AND YOUR APPELLANT IS ONLY SECOND HOLDER FOR SUCH INVESTMENT . ITA NO. 686/AHD/2011 CHETNA AMIT DESHMUKH VS. ITO AY 2006-07 - 3 - 2.3 YOUR APPELLANT THEREFORE PRAYS YOUR HONOUR TO HOLD SO NOW AND DIRECT THE LD. AO TO DELETE THE ADDITION TO THE TUNE OF RS.35,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT. 3. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND / OR AMEND THE GROUNDS HEREIN ABOVE RAISED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FURNISHED RETURN OF INCOME ON 03.07.2006 DECLARING TOTAL INCOME OF RS.96,000/-. THE ASSESSING OFFICER FRAME D ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT ON 28.1 1.2008, DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS.35,9 6,000/-, WHICH INCLUDED THE UNEXPLAINED INVESTMENT IN MUTUAL FUND, AMOUNTING TO RS.35,00,000/-, IN THE FOLLOWING INVES TMENTS. NAME OF FUND AMOUNT DATE OF INVESTMENT HDFC MUTUAL FUND RS.5,00,000 06.02.2006 FRANKLIN TEMPLETON MUTUAL FUND RS.5,00,000 0 6.02.2006 P RUDENTIAL ICICI MUTUAL FUND RS.5,00,000 13.02.2006 HDFC MUTUAL FUND RS.5,00,000 06.02.2006 PRUDENTIAL ICICI MUTUAL FUND RS.5,00,000 06.02.2006 FRANKLIN TEMPLETON MUTUAL FUND RS.10,00,000 06.02.2006 RS.35,00,000 2.1 THE ASSESSING OFFICER ASKED THE ASSESSEE TO FUR NISH THE COPY OF BANK STATEMENTS AND THE SOURCES OF INVESTME NTS BY A NOTICE DATED 23.10.2008 BUT THE ASSESSEE COULD NOT FURNISH ITA NO. 686/AHD/2011 CHETNA AMIT DESHMUKH VS. ITO AY 2006-07 - 4 - ANY DETAILS. SINCE THE ASSESSEE WAS HAVING SALARY INCOME OF RS.96,000/-, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SOURCE OF INVESTMENTS WAS NOT EXPLAINED AND HE ACCO RDINGLY ADDED RS.35,00,000/- TO THE TOTAL INCOME OF THE ASS ESSEE. 4. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY, WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, CONFIRMED THE ADDITION IN QUESTION ON THE GROUND TH AT THE SOURCE OF THE SAID AMOUNT WAS NOT EXPLAINED. BEFORE US, THE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FILED AN APPLICATION FOR ADDITIONAL EVIDENCE, INTER ALIA , SUBMITTING THAT THE ASSESSEE IS PLACING 34 PAGES OF DOCUMENTS AS ADDITIONAL EVID ENCES ON RECORD BEFORE THE ITAT. HE FURTHER CONTENDED THAT AT THE ASSESSMENT STAGE, THE MATTER WAS HANDLED BY SHRI NI TIN C. PARMAR, INCOME TAX PRACTITIONER, ON BEHALF OF ASSES SEE AND THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT THE DETAI LS AS REQUIRED FROM TIME TO TIME WERE SUBMITTED BY HIM. HOWEVER, SUCH DETAILS WERE NOT FILED BY SHRI PARMAR BEFORE T HE ASSESSING OFFICER AND THE ASSESSMENT CAME TO BE FRAMED U/S 14 3(3) R.W.S. 144 OF THE ACT. HE ALSO SUBMITTED THAT AT THE APPE LLANT STAGE, THE ASSESSEE MADE STRENUOUS EFFORTS TO COLLECT THES E EVIDENCES FROM SHRI PARMAR, BUT COULD NOT BE ABLE TO COLLECT THE SAME FROM HIM; HENCE THESE ADDITIONAL EVIDENCES COULD NO T BE PLACED ITA NO. 686/AHD/2011 CHETNA AMIT DESHMUKH VS. ITO AY 2006-07 - 5 - EVEN BEFORE THE CIT(A). WE FIND FORCE IN THE SUBMI SSIONS OF THE ASSESSEE THAT THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ARE FOUND TO BE IMPORTANT AND DECISIVE PIE CE OF EVIDENCE IN DETERMINING THE CONTROVERSY IN JUST AND EQUITABLE MANNER. IN VIEW OF THE ABOVE AND IN THE INTEREST OF JUSTICE, WE ADMIT THE APPLICATION FOR ADDITIONAL EVIDENCES FILE D BY THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF TH E ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE ISSUE AFRE SH, AFTER CONSIDERING THE ADDITIONAL EVIDENCES SUBMITTED BY H IM, AS PER FACTS AND LAW. WE ALSO DIRECT THE ASSESSEE TO FURN ISH NECESSARY EXPLANATION / EVIDENCES AS DISCUSSED ABOVE BEFORE T HE ASSESSING OFFICER. NEEDLESS TO MENTION THAT THE AS SESSING OFFICER WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE WHILE RE-ADJUDICATING THIS MATTER. SINCE W E ARE RESTORING THE MATTER TO THE FILE OF ASSESSING OFFIC ER ON PRELIMINARY ISSUE AS DISCUSSED ABOVE, WE ARE REFRAI NING TO COMMENT ON MERIT OF ISSUE AT HAND. 5. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ITA NO. 1117/AHD/2013 : AY 2006-07 6. IN THIS APPEAL, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- ITA NO. 686/AHD/2011 CHETNA AMIT DESHMUKH VS. ITO AY 2006-07 - 6 - 1. ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLANT 'S CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, BARODA (LD. CIT(A) IN SHORT) HAS ERR ED IN NOT APPRECIATING THAT THE PENALTY ORDER WAS PASSED WITH OUT PROVIDING PROPER OPPORTUNITY OF BEING HEARD AND HEN CE TO BE TREATED US BAD IN LAW. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF YOUR APPELLANT'S CASE AND IN LAW, THE LD. CIT(A) HAS ERR ED IN APPRECIATING NECESSARY DOCUMENTARY EVIDENCES FURNIS HED JUSTIFYING SOURCE OR INVESTMENT TO THE TUNE OF RS.35,00,000/- AND HENCE, NO PENALTY SHOULD BE IMPO SED. 3. THE LD, CIT(A) HAS FURTHER ERRED IN NOT CONSIDER ING DECISIONS RELIED UPON BY YOUR APPELLANT. 4. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR AMEND THE GROUNDS HEREIN ABOVE RAISED. 7. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSE E, CHALLENGING THE ORDER OF THE CIT(A) IN CONFIRMING T HE PENALTY OF RS.11,51,000/-, WHICH WAS IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. THE ISSUE IN THIS APPEAL IS PENALTY, WHICH IS CONSEQUENTIAL DEPENDING UPON THE OUTCOME O F THE MAIN ISSUE AS REFERRED HEREINABOVE IN QUANTUM APPEA L, I.E., ITA NO.686/AHD/2011. 8. SINCE WE HAVE RESTORED THE MAIN ISSUE BACK TO TH E FILE OF ASSESSING OFFICER IN THE QUANTUM APPEAL, THE ISSUE OF PENALTY IS ALSO RESTORED BACK TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE SAME AS PER FINAL OUTCOME I N THE ITA NO. 686/AHD/2011 CHETNA AMIT DESHMUKH VS. ITO AY 2006-07 - 7 - QUANTUM PROCEEDINGS AS WELL AS FACTS AND LAW, AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. AS A RESULT, BOTH THE APPEALS FILED BY THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 01 ST OF FEBRUARY, 2016 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 01/02/2016 *BT !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A), 5. !'# $$ , , / DR, ITAT, AHMEDABAD 6. #() / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD