Sh. Iqbal Singh Prop., Bathinda V. Additional Commissioner of Income Tax, Bathinda

ITA 74/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5828 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 21-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2010
• Court: TRIBUNAL
• Assessee Lawyers: S K BANSAL
• Keywords: Business expenditure; Opportunity of being heard
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR. BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER. I.T.A. NO.74(ASR)/2010. (ASSESSMENT YEAR: 2006-07) SHRI IQBAL SINGH, THE ADDL. C.I.T., BHATINDA. RANGE I, BHATINDA. (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI S.K. BANSAL, ADV. RESPONDENT BY: SHRI TARSEM LAL, D.R. ORDER PER H.L. KARWA, VICE PRESIDENT. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), BHATINDA DATED 12-11-2009, RELATING TO THE ASSESSMENT YEAR 2006-07. 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FAC T THAT THE LD. AO HAS NOT ALLOWED REASONABLE OPPORTUNITY TO THE APPEL LANT, AS THE AO WAS UNDER PRESSURE OF TIME BARRING AND DISPOSE THE CASE HURRIEDLY ON 30-12-08 THE LAST DATE. 2. THAT THE LD. CIT(A) DID NOT PASS A SPEAKING ORDE R AND DISPOSE THE APPEAL WITHOUT PROPER FINDING. 3. THAT THE LD. CIT(A) WRONGLY CONFIRMED THE ADDITI ON OF RS.58000/- AS CASH CREDITS, AND DID NOT APPRECIATE THE AFFIDAVITS OF CREDITORS, WITHOUT PASSING A SPEAKI NG ORDER. 2 4. THAT THE LD. CIT(A) WRONGLY CONFIRMED THE ADDITI ON OF RS.12000/- UNDER HEAD HOUSE HOLD EXPENSES AND DID N OT APPRECIATE THE ARGUMENT, THAT THE WIFE OF APPELLANT IS A REGULAR ASSESSEE AND HAS SHOWN HOUSEHOLD EXPENSES AT RS.300 00/-. 5. THE LD. CIT(A) WRONGLY CONFIRMED THE ADDITION OF RS.45000/- UNDER HEAD INTEREST NOT CHARGED WITHOUT PASSING A SPEAKING ORDER, AND WITHOUT APPRECIATING BUSINESS EXPEDIENCY AND SECOND ONE IS MR. NAVJOT SINGH A REAL BROTHER (AND IGNORED THE CASE OF S.A. BUILDER OF APEX COURT) 288 ITR 1 (SC). 6. THAT THE LD. CIT(A) WRONGLY CONFIRMED THE ADDITI ON OF RS.1,77,000/- UNDER HEAD INTEREST PAID TO SATPAL SI NGH & NAVJOT SINGH DHILLON, OUTSIDE THE BOOKS. 6(B) THAT THE LD. CIT(A) DID NOT APPRECIATE THE ARG UMENT THAT THE PAYMENT OF INTEREST AT RS.177000/- (IF PAID) IS A BUSINESS EXPENDITURE. 6(C) THAT THE LD. CIT(A) HAS NOT APPRECIATED THE AR GUMENT THAT BOTH THE CREDITORS I.E. SATPAL SINGH & NAVJOT SINGH HAD, APPLIED AND TAKEN LOAN, FROM THE BANK, MUCH BEFORE, FOR THE PUR POSE OF BRICK KILN BUSINESS. 6(D) THE DATE OF LOAN TO THE APPELLANT IS MUCH AFT ER. 7. THAT THE ORDER OF AO AS WELL AS ORDER OF CIT(A) ARE BAD IN LAW AS WELL AS ON FACTS. 8. THAT THE ORDER OF CIT(A) MAY KINDLY BE SET ASIDE , MODIFIED OR ANY OTHER CONSEQUENTIAL RELIEF BE ALLOWED, AS THE A PPELLATE ORDER IS NOT A SPEAKING ORDER. 3. FIRSTLY, WE WILL DECIDE GROUND NO.1 OF THE APPEA L, WHICH GOES TO THE ROOT OF THE MATTER. IN THIS CASE, THE ASSESSEE FIL ED HIS RETURN OF INCOME ON 27-10-2006 DECLARING AN INCOME O RS.1,61,332/- FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE A.O. ISSUED NOTICE UNDER S ECTION 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT) ON 22-3- 2007, WHICH WAS SERVED 3 ON 31-3-2007. THE CASE WAS RECEIVED BY THE PRESENT A.O. ON TRANSFER. THE A.O. ISSUED STATUTORY NOTICE ON 10-7-2008 FIXING TH E CASE FOR HEARING ON 29-7-2008. THE ASSESSEE PRODUCED BOOKS OF ACCOUNT, BILLS AND VOUCHERS, WHICH WERE TEST CHECKED BY THE A.O. WHILE FRAMING THE ASSESSMENT, THE A.O. MADE THE ADDITION OF RS.1,55,000/- ON ACCOUNT OF CASH CREDITS, RS.30,000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS , RS.45,000/- UNDER THE HEAD INTEREST NOT CHARGED AND RS.1,77,000/- UNDER SECTION 69C OF THE ACT. 4. ON APPEAL, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE PARTLY AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT ONE OF THE GROUNDS RAISED BEFORE THE CIT(A) WAS AS UNDER:- NO PROPER OPPORTUNITY WAS GIVEN TO THE APPELLANT F OR PRODUCING THE CREDITORS WHOSE DEPOSIT WAS BELOW RS.20,000/- FOR R ECORDING THEIR STATEMENTS. THE STATEMENTS OF DEPOSITORS WERE NO RECORDED AS THEY WERE NOT HAVING ANY IDENTITY CARDS WITH THEM. THE SUMMONS TO THE CREDITORS WERE NOT ISSUED AS REQUESTED BY THE ASSES SEE-APPELLANT. 5.1 FROM THE IMPUGNED ORDER, IT IS EVIDENT THAT THE LEA RNED CIT(A) HAS NOT CONSIDERED THIS GROUND OF APPEAL. WE FIND THAT THE ASSESSMENT WAS FRAMED BY THE A.O. ON 30-12-2008. HOWEVER, AFTER RECEIVIN G THE FILE ON TRANSFER BY THE PRESENT A.O., NO ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WAS GIVEN. IT IS APPARENT FROM THE ASSESSMENT ORDER TH AT THE STATUTORY NOTICE WAS ISSUED ON 10-7-2008 AND THE ASSESSMENT HAS BEEN COM PLETED ON 30-12-2008. IT SEEMS THAT THE A.O. HAS NOT AFFORDED ADEQUATE OP PORTUNITY TO THE ASSESSEE FOR PRODUCING CREDITORS WHOSE DEPOSITS WERE BELOW R S.20,000/- FOR RECORDING THEIR STATEMENTS. SIMILARLY, THE A.O. MADE THE ADD ITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. IT IS APPARENT FROM THE ASS ESSMENT RECORDS THAT FOR THE FIRST TIME THE A.O. ASKED THE ASSESSEE TO JUSTI FY HIS CLAIM VIDE ORDER SHEET ENTRY DATED 24-11-2008. CONSIDERING THE ENTIRE FACT S AND THE CIRCUMSTANCES 4 OF THE PRESENT CASE, WE FIND MERITS IN THE SUBMISSI ONS OF SHRI S.K. BANSAL, ADVOCATE, THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE A.O. HAS NOT AFFORDED SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE BEFORE MAKING THE IMPUGNED ADDITIONS/DISALLOWANCES. WE SET-ASIDE THE ORDER OF THE CIT(A) IN TOTO AND REMAND THE MATTER TO THE A.O. WITH A DIREC TION TO FRAME A FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW AFTER AFFO RDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7 TH JUNE, 2011. SD/- SD/- MEHAR SINGH) (H.L. KARWA) ACCOUNTANT MEMBER. VICE PRESIDENT. DATED: 7 TH JUNE, 2011. KC/- COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE (2) THE ITO (3) THE CIT (4) THE CIT(A) (5) THE SR.D.R., ITAT, ASR. TRUE COPY BY ORDER ASSTT. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AMRITSAR.