Virendra P Mamtora, Ahmedabad V. The ITO, Ward-5(3)(3), Ahmedabad

ITA 740/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5815 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 29-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KUMAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Principle of natural justice; Peak credit; Additional evidence; Corroborative evidences; Set aside
• Section: 80C; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER) [THROUGH VIRTUAL COURT] ITA. NO: 740/AHD/2019 (ASSESSMENT YEARS: 2012-13) VIRENDRA P. MAMTORA D- 61, KONARK KRISHNA APPARTMENT BEHIND SWAMINARAYAN TEMPLE, MANSI CROSS ROAD, VEJALPUR PAN NO. ACFPM3531P V/S I.T.O., WARD-5(3)(3), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. N. DIVETIA, A.R. RESPONDENT BY : SHRI PURSHOTTAM KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 15-09-2021 DATE OF PRONOUNCEMENT : 16 -09-2021 PER MAHAVIR PRASAD, J.M. 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) VIDE APPEAL NO. CIT(A)-5/ITO WARD-5(3)(3)/10100/2018-19 ORDER DATED ITA NO. 740/AHD/2019 . A.Y. 2012-13 2 28/01/2019 ARISING OUT OF ASSESSMENT ORDER DATED 30/03/2015. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1) 1.1 THE ORDER PASSED U/S. 250 ON 28.01.2019 FOR A.Y.2012-13 BY CIT(A)-5, A'BAD, UPHOLDING ADDITIONS/DISALLOWANCES OF RS.7,68,50,212/- IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE APPELLANT FILED SMALL AND SKETCHY REPLY ON 24-12-2018 AND HIS AR SHRI MEHUL TALERA ADMITTED VIDE ORDER SHEET ENTRY DT 10-1-2019 THAT WITH RESPECT TO GROUND NO. I/A TO 1/E THERE WAS NO EVIDENCE AVAILABLE AND ISSUES MAY BE DECIDED AS PER AVAILABLE MATERIAL. THE LD CIT(A) HAS PASSED A NON-SPEAKING ORDER WITHOUT CONSIDERING THE SUBMISSIONS AND EVIDENCE PRODUCED BEFORE HIM. THE CIT(A) HAS ALSO NOT CONSIDERED THE APPLICATION FOR ADDITIONAL EVIDENCE AS PER RULE 46A AND FAILED TO DISPOSE OFF THIS GROUND. THUS THERE IS GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING FOLLOWING ADDITIONS/DISALLOWANCES: (A) DISALLOWANCE OF INTEREST RS. 53,01,535/- (B) DISALLOWANCE OF DEDUCTION U/C VIA RS. 16,51,155/- (C) CASH DEPOSITS IN BANK A/C RS. 2,81,91,623/- (D) DISALLOWANCE OF EXPENSES RS. 54,68,899 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE ABOVE SAID ADDITIONS/DISALLOWANCES. 2.3 THE LD CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ADDITIONS TOWARDS SUNDRY CREDITORS WHO HAVE GIVEN LOAN DURING THE YEAR. 2.4 WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALTERNATIVE, THE ID. CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING MULTIPLE ADDITIONS/DISALLOWANCES SO THAT THE SAME DESERVES TO BE REDUCED. SIMILARLY, THE CIT(A) OUGHT TO HAVE GIVEN SET OFF OF THE DOUBLE ADDITIONS AND THE BENEFIT OF PEAK CREDIT. ITA NO. 740/AHD/2019 . A.Y. 2012-13 3 IT IS THEREFORE PRAYEDTHAT THE DISALLOWANCE/ADDITIONS AGGREGATING TO RS. 7,68,50,212/- UPHELD BY THE LD. CIT(A) SHOULDBE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL AND DERIVES INCOME BY WAY OF MFG AND SEMI WHOLE SELLER OF GARMENTS. HE HAD FILED HIS RETURN OF INCOME FOR A.Y.2012-13 ON 29-9-2012 DECLARING TOTAL INCOME OF RS. 9,39,410/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS CLAIMED THAT VARIOUS NOTICES OF HEARING WERE ISSUED AND SERVED UPON THE APPELLANT BUT HE COMPLETELY FAILED TO COMPLY WITH THE SAME. HENCE THE AO PASSED EX-PARTE ORDER MAKING FOLLOWING ADDITIONS/DISALLOWANCES: (A) DISALLOWANCE OF INTEREST RS. 53,01,535/- (B) DISALLOWANCE OF DEDUCTION U/C VIA RS. 16,51,155/- (C) ADDITION U/S 68 RS. 3,62,37,000/- (D) CASH DEPOSITS IN BANK A/C RS. 2,81,91,623/- (E) DISALLOWANCE OF EXPENSES RS. 54,68,899/- 4. THE AO ALSO NOTICED THAT THE APPELLANT HAD CLAIMED INTEREST EXP OF RS. 53,01,535/- ON LOAN TAKEN ON THE SECURITY OF HOUSE PROPERTY BUT IN ABSENCE OF THE SUPPORTING EVIDENCE RELATING TO THE LOAN TAKEN FROM BANK FOR THE SPECIFIC PURPOSE OF HOUSE PROPERTY, THE ENTIRE INTEREST EXP. WAS DISALLOWED. 5. THE AO ALSO DISALLOWED THE ENTIRE CLAIM OF RS.16,51,155/- MADE UNDER CHAPTER-VIA CONSISTING OF DEDUCTIONS U/S. 80C OF RS.L LACS, U/S. 80GGC OF RS. 15,21,000/-, U/S. 80D OF RS. 6,155/- AND U/S. 80GGA OF RS. 24,000/- IN ABSENCE OF THE PROOF OF PAYMENT. 6. THE AO NOTICED FROM THE BALANCE SHEET THAT THERE WAS UNSECURED LOAN OF RS.3,62,37,000/- FROM 11 PARTIES BUT THE APPELLANT DID NOT ESTABLISHED THE IDENTITY, ITA NO. 740/AHD/2019 . A.Y. 2012-13 4 CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN SPITE OF OPPORTUNITY GIVEN. HENCE, THE ADDITION OF RS. 3,62,37,000/- WAS MADE. 7. THE AO HAS OBSERVED THAT AS PER AIR INFORMATION, THE APPELLANT HAD MADE CASH DEPOSITS IN ACCOUNT WITH CITY BANK AND HDFC BANK AS PER THE DETAILS GIVEN IN PARA 6.3 OF THE ORDER, BUT, IN ABSENCE OF COPY OF BANK ACCOUNT AND THE SOURCE TO PROVE THE CASH DEPOSITS, THE SAME WAS TREATED AS UNEXPLAINED CASH CREDIT. HENCE, THE ADDITION OF ALL CREDITS IN THE BANK ACCOUNTS TOTALING TO RS.2,81,91,623/- WAS MADE. 8. THE AO HAS OBSERVED THAT IN ABSENCE OF DETAILS OF SALES LEDGER, SALES BILL, NAME AND ADDRESS OF THE PARTIES ETC., THE SALES WERE UNVERIFIABLE AND HENCE 20% OF THE TOTAL EXPENSES WERE DISALLOWED I.E. RS. 54,68,899/-. THUS THE AO PASSED AN EX-PATE ORDER MAKING ADDITIONS/DISALLOWANCES OF TOTALING TO RS.7,68,50,212/-. 9. BEING AGGRIEVED, THE APPELLANT PREFERRED APPEAL BEFORE THE CIT(A)-5, ABAD. HOWEVER, EVEN AT THIS STAGE, THE APPELLANT COULD NOT REPRESENT HIS CASE AND THE CIT(A) DISMISSED THE APPEAL WITHOUT CONSIDERING THE MATTER ON MERITS. 10. WE HAVE HEARD BOTH THE PARTIES. UNDISPUTEDLY, ASSESSEE COULD NOT FURNISH THE RELEVANT DETAILS IN SUPPORT OF HIS CONTENTION HOWEVER, LOWER AUTHORITIES HAD TO PASS AN EX PARTE ORDER. THE ARGUMENT OF THE LD. A.R. WAS THAT AT THAT POINT OF TIME, ASESSEE DID NOT HAVE SUFFICIENT EVIDENCE IN SUPPORT OF ITS CONTENTION AND AT THIS STAGE, ASSESSEE HAS FILED DETAILED PAPER BOOK CONTAINING SUPPORTING DOCUMENTS THOSE HAVE BEEN FILED FIRST TIME BEFORE US. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER ALL THE EVIDENCES AND SUPPORTING DOCUMENTS AND THEREAFTER WILL PASS AN ORDER AS PER LAW. SUBJECT TO THE CONDITION THAT ASSESSEE SHALL DEPOSIT A COST OF RS. 10,000/- WITH THE DEPARTMENT AS ASSESSEE HAS WASTED PRECIOUS TIME OF THE LOWER AUTHORITIES AND AFTER PAYMENT OF THE COST. LD. AO. SHALL PROCEED WITH THE APPEAL AND WILL PASS AN ORDER AS PER LAW. ITA NO. 740/AHD/2019 . A.Y. 2012-13 5 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 16- 09- 2021 SD/- SD/- (AMARJIT SINGH) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 16/09/2021 RAJESH COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD