PURUSHOTTAM L. BHARADWAJ, MUMBAI V. ITO WD 23(1)(3), MUMBAI

ITA 7398/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3077 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 11-12-2014
• Court: TRIBUNAL
• Department Lawyers: SHIR AARSI PRASAD
• Assessee Lawyers: DR P DANIEL
• Keywords: Principle of natural justice
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.7398/M/2014 (ASSESSMENT YEAR: 2000 - 2001 ) SHRI PURUSHOTTAM L BHARADWAJ, C/O. LUB LINKERS INDIA, SUBASH NAGAR, VILLAGE ROAD, BHANDUP (W), MUMBAI 078. / VS. THE INCOME TAX OFFICER, WARD 23(1)(3), MUMBAI. ./ PAN : AAAPB7492F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : DR. P. DANIEL / RESPONDENT BY : SHIR AARSI PRASAD, DR / DATE OF HEARING : 20.06.2016 / DATE OF PRONOUNCEMENT : 20 .06.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 11.12.2014 IS AGAINST THE ORDER OF THE CIT (A) - 33, MUMBAI DATED 30.9.2014 FOR THE ASSESSMENT YEAR 2000 - 01. IN THIS APPEAL, ASSESSEE RAISED THREE GROUNDS IN TOTO AND THEY REVOLVE AROUND THE PENALTY U/S 271(1)(C) OF THE ACT. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO LEVIED PENALTY OF RS. 5,85,200/ - . THOUGH THE ADDITION MADE IN THE ORIGINAL ASSESSMENT IS AROUND RS. 23,60,000/ - , THE AO LEVIED PENALTY ON THE AMOUNT OF RS. 8.6 LAKHS (ROUNDED OF). FURTHER, HE SUBMITTED THAT THE SAID RS . 8.6 LAKHS WAS ALSO SET ASIDE TO THE FILE OF THE AO BY THE ORDER OF THE TRIBUNAL VIDE ITA NO. 297/M/2013 (AY 2000 - 01), DATED 19.1.2016. RELEVANT PARAS FROM THE SAID TRIBUNALS ORDER ARE EXTRACTED AS FOLLOWS: - 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE HAS RECEIVED RS. 5 LACS FROM KISHORE TRADING CO . ON 27 - 1 - 2000 THROUGH BANKING CHANNEL FOR WHICH THE APPROPRIATE RELIEF IS GIVEN BY THE CIT(AL WHEREBY THE CIT(AL DELETED THE A DDI T ION OF RS. 5 L A CS WHICH W A S INCLUDED IN THE AMOUNT OF A DDITION OF RS. 8 , 20 , 000/ - MADE BY THE REV E NUE IN THE ASSESSMENT ORD E RS DATED 28 - 12 - 2010. THE A SS E SSEE H A S CONTEND E D T HA T RS . 5 L A CS REC E IVED FROM KISHORE 2 TRADIN G CO., IS IN FACT THE SAME AMOUNT AND THE DOUBLE ADDITION IS MADE BY THE AO ON HIS ORDERS DATED 28 - 12 - 2010, ONCE IN THE ADDITION OF RS.8 , 20,000/ - MADE BY THE REV E NUE WHICH WAS DELETED BY THE CIT(AL VIDE ORDERS DATED 25.06.2012 AND AG A IN WHILE M A KING ADDITION OF RS.I0,40,000/ - BY THE REVENUE WHICH WAS SU STAINED BY THE CIT(AL. THE A SSESSEE HAS NOT SUBMITTED SUCH EXPLANATION BEFORE THE AUTHORITIES BELOW AND HAS MADE THIS EXPLANATION FOR THE FIRST TIME B E FORE US. IN OUR CON S IDERED VIEW , THE EV IDENCES PLACED BEFORE US BY THE ASSESSEE AND THE CONT E NTIONS OF T HE ASS E SSEE THAT RS. 5 LACS RECEIVED FROM KISHORE TRADING COMPANY IS THE SAME AMOUNT AS INCLUDED IN THE A MOUNT O F A DDITION OF RS. 8, 20 , 000/ - A ND A L S O IN THE ADDITION O F RS.I0,40,000 / - BY THE REVENUE NEEDS VERIFICATION OF FACTS BY THE AUTHORITIES BELOW, H ENCE, WE SET ASIDE THE MATTER BACK TO THE FILE OF A.O. FOR VERIFICATION THAT THE ADDITIONS OF RS.5,00,000/ - BEING LOAN RECEIVED FROM KISHORE TRADING COMPANY IS THE ONLY LOAN RECEIVED BY THE ASSESSEE ON 27 - 01 - 2000 DURING THE PREVIOUS YEAR FROM SAID KISHORE TR A DING COMPANY WHI C H WAS INCLUDED IN THE ADDITIONS OF RS.8,20,0001 - MADE BY THE REVENUE FOR WHICH APPROPRIATE RELIEF WAS GRANTED BY THE CIT(A} AND THERE IS NO OTHER LOAN OF RS.5,00,000/ - RECEIVED DURING THE PREVIOUS YEAR BY THE ASSESSEE FROM MI S KISHORE TRADING COMPANY WHICH IS ADDED IN THE ADDITION OF INCOME OF RS.10,40,0001 - MADE BY THE REVENUE AND TO SATISFY THE MANDATE OF SECTION 68 OF THE ACT. NEEDLESS TO SAY THAT THE AO SHALL GRANT PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANC E WITH LAW IN COMPLIANCE OF PRINCIPLES OF NATURAL JUSTICE. WE ORDER ACCORDINGLY. SIMILARLY, WITH RESPECT TO THE ADDITION OF RS. 40,000/ - , THE ASSESSEE CONTENDED THAT THIS AMOUNT IS INCLUDED IN THE FIGURE OF RS . 10,40,000/ - OF THE ADDITION MADE BY THE A.O. AND THIS AMOUNT OF RS. 40,000/ - REPRESENT THE NURS E RY INCOME WHICH IS INCLUDED IN THE AGRICULTURAL INCOME OF RS.1,32,9001 - DULY DECLARED AND DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED WITH THE REVENUE . TH E ASSESS E E HAS NOT SUBMITTED ANY SUCH EXPLANATION B E FORE THE AO AND THE CIT(AL AND THIS EXPLANATION IS SUBMITTED BY THE ASSESSEE BEFORE US FOR THE FIRST TIME. THUS , THIS FACT ALSO NEEDS VERIFICATION BY THE A.O. AND HENCE THIS ISSUE IS ALSO SET ASIDE TO THE FILE OF A . O. FOR VERIFICATION TO SATI SFY THE M A ND A TE OF S E CTION 68 OF THE ACT. NEEDLESS TO SAY TH A T THE AO SH A LL GRANT PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH LAW IN COMPLIANCE OF PRINCIPLES OF NATURAL JUSTICE.WE ORDER ACCORDINGLY. THE THIRD ADDITION IS WITH RESPECT TO THE AMOUNT OF RS. 3,20,000/ - WHICH WAS INCLUDED IN THE FIGURE OF ADDITION OF AMOUNT OF RS . 8,20,000/ - . THE ASSESSEE CONTEND E D THAT THIS AMOUNT OF RS.3,20,000/ - IS P A YABLE TO INDUSTRI A L CORPORATE SERVICES TOWARDS CONSTRU CTION OF INDUSTRI A L SHED FOR WHICH NECESSARY INVOICES HAS BEEN SUBMITTED ALONG WITH LETTER OF CONFIRMATION . WE HAVE OBSERVED THAT THE LETTER OF CONFIRMATION IS NOT SIGNED BY THE INDUSTRIAL CORPORATE SERVICES AND ALSO NO PAN DETAILS OF THE S A ID CONCERN INDU STRIAL CORPORATE SERVICES WERE SUBMITTED BY THE ASSESSEE, EVEN BEFORE US. THE SAID LETTER OF CONFIRMATION HAS NOT BEEN EMANATING FROM THE INDUSTRIAL CORPORATE SERVICES RATHER IS AN EXTRACT OF ACCOUNTS OF THE ASSESSEE ' S BOOKS OF ACCOUNTS. THE PAYMENT OF RS.80,OOOJ - MADE DURING THE PREVIOUS YEAR IN THE SAID CONFIRMATION ARE ALL PAID IN CASH AS PER DOCUMENTS PRODUCED BEFORE US. IN OUR CONSIDERED VIEW, THESE EVIDENCES AGAIN REQUIRED VERIFICATION BY THE A . O., HENCE THIS ISSUE ALSO NEED TO BE SET ASIDE TO THE FILE OF A.O. FOR NECESSARY VERIFICATION TO SATISFY THE MANDATE OF SECTION 68 OF THE ACT . NEEDLESS TO SAY THAT THE AO SHALL GRANT PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE IN ACCORDANCE WITH LAW IN COMPLIANCE OF PRINCIPLES OF NATURAL JUSTICE. WE ORDER A CCORDINGLY. 3 3. CONSIDERING THE ABOVE FINDING OF THE TRIBUNAL ON MERITS, NOW, LD COUNSEL FOR THE ASSESSEE REQUESTED FOR CANCELLING THE PENALTY AND LEVYING THE PENALTY, IF ANY, AFTER COMPLETION OF THE SET ASIDE PROCEEDINGS. 4. AFTER HEARING BOTH THE PARTIES, I FIND, THE SAID CLAIM OF THE ASSESSEE IS PROPER AND I DELETE THE PENALTY WITH A DIRECTION TO THE AO T O COMPLETE THE PENALTY PROCEEDINGS AS PER THE STATUTE DEPENDING ON THE OUTCOME OF THE SET ASIDE PROCEEDINGS. AO SHALL GRANT A REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED IN THE OPEN COURT ON 2 0 T H JUNE, 2016. S D / - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 20 .6.2016 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI