M/s. Rameshwar Developers, Ahmedabad V. The Dy. CIT, Central Circle-1(4), Ahmedabad

ITA 768/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7504 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K GOYAL
• Assessee Lawyers: P B PARMAR
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 131; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, AHMEDABAD BEFORE SHRI AMARJIT SINGH , ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO. 768 /AHD/2018 & / ASSTT. YEAR: 2013 - 2014 M/S.RAMESHWAR DEVELOPERS , SHYAMVEDSTATUS , BEHIND YASH AVENUE , IOC ROAD, CHANDKHEDA, AHMEDABAD. PA N: AAMFR6704J VS . D .C.I.T. , CENTRAL CIRCLE - 1 ( 4 ) , AHMEDABAD (APPLICANT) (RESPONENT) ASSESSEE BY : SHRI P.B. PARMAR , A.R REVENUE BY : SHRI N.K. GOYAL , SR. DR / DATE OF HEARING : 2 0 / 01 / 2020 / DATE OF PRONOUNCEMENT: 3 0 / 01/2020 / O R D E R PER MS MADHUMITA ROY, JUDICIAL MEMBER : T HE INSTANT APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 19.01.2018 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 11 , AHMEDABAD ARISING OUT OF THE ORDER DATED 14.03.2016 PASSED BY THE ACIT, C ENTRAL C IRCLE - 1(4), AHMEDABAD UNDER SECTION 143 (3)OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT Y EAR 2013 - 20 14. 2. THE AD DITION UNDER SECTION 68 OF THE A CT IN RESPECT OF UNSECURED LOANS OBTAINED BY THE ASSESSEE FROM FOUR PERSONS AND THE INTEREST ON SUCH UNSECURED LOAN HAS BEEN CHALLENGED BEFORE US. ITA NO. 768 /AHD/2018 A.Y. 2013 - 2014 2 3. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE A PARTNERSHIP FI RM ENGAGED AS A DEVELOPER FILED ITS RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION ON 17 .0 9. 2014 DECLARING TOTAL INCOME AT RS. 26 ,9 2 ,2 50 / - . D URING THE COURSE OF ASSESSMENT PROCEEDING IT WAS FOUND T HAT THE APPELLANT HAD BORROWED RS . 1 9 , 30 , 000 / - FROM FOUR PARTIES. COMMISSION UNDER SECTION 131 (1) (D) OF THE A CT WAS ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDING TO THE CONCERNED DD/AC(INV) OF THE SAID CREDITORS. THE DETAILS BEING THE ACKNOWLEDGEMENT OF RETURN OF THOSE CREDITO RS, COPY OF BALANCE SHEET, CONFI RMATION AND THE BANK STATEMENT IN CLUDING THE PAN NUMBERS OF THE SAID CREDITORS WERE ALSO GIVEN TO THE ASSESSING OFFICER BY THE ASSESSEE BEFORE US. HOWEVER THE CASE OF THE REVENUE IS THIS THAT THOSE CREDITORS HAS OUT RIGHTLY DENIED SUCH TRANSACTION MAD E BY THEM TO THE ASSESSEE. MORE SO , THEY HAVE DENIED THAT THEY EVE N DIDN T KNOW THE PERSON WHO REMITTED THE MONEY TO THEIR ACCOUNT S . ULTIMATELY THE REVENUE HAS COME TO A FINDING THAT THE ASSESSEE HAS MANAGED THE MONEY TO TRANSFER TO THEIR ACCOUNT S AND AFTER THAT THEY HAD ISSUED CHEQUE S TO THE A SSESSEE THUS T HIS IS A CLEAR CASE OF ACCOMMODATION ENTRY. 4 . AT THE TIME OF HEA RING OF THE INSTANT APPEAL THE LEARNED A DVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT IN SPITE OF REPEATED REQUEST FOR CROSS - EXAMINATION OF THOSE CREDITORS THE SAME WAS NOT PROVIDED TO THE ASSESSEE. HENCE HE RELIED UPON THE JU DGEMENT PASSED BY THE HON BLE APEX COURT IN THE MATTER OF ANDAMAN TIMBERS INDUSTRIES VERSUS CIT E XCISE, KOLKATA - II AND PRAYED FOR OPPORTUNITY TO CROSS - EXAMINE THOSE CREDITORS ON THE BASIS OF WHOSE STATEMENTS THE REVENUE MADE A DDITION. ON THE OTHER HAND THE LEARNED DEPARTMENTAL R EPRESENTATIVE SUBMITTED THAT IT IS A CLEAR CASE OF ACCOMMODATION ENTRY. THUS THE LEARNED D.R RELIED UPON THE ORDER PASSED BY THE AUTHORITIES BELOW. ITA NO. 768 /AHD/2018 A.Y. 2013 - 2014 3 5. HEARD THE PART IES, WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD INCLUDING THE MATERIALS SUBMITTED BEFORE THE AUTHORITIES BELOW IN SUPPORT OF THE CASE OF THE ASSESSEE. WE HAVE CAREFULLY CONSIDERED THE ORDER PASSED BY THE AUTHORITIES BELOW WHEREFROM IT IS REFLECTED THAT THE ASSE SSEE, TIME AND AGAIN PRAYED FOR CROSS - EXAMINATION OF THE CREDITORS WHOSE STATEMENTS WERE TAKEN INTO CONSIDERATION BY THE AUTHORITIES BELOW WHILE MAKING ADDITION. HOWEVER SUCH PLEA OF THE ASSESSEE WAS NOT TAKEN INTO CONSIDERATION IN ITS PROPER PERSPECTIVE BY GRANTING THEM AN OPPORTUNITY TO CROSS EXAMINE WHICH IS A SERIOUS FLAW MAKES THE ORDER NULLITY AS IT AMOUNTS TO VIOLATION PRINCIPLE OF NATURAL JUSTICE AS WE ALSO GATHER FROM THE JU DGEMENT PASSED BY THE HON BLE APEX COURT AS CITE D BY THE L EARNED A . R IN THE MATTER OF ANDAMAN TIMBERS INDUSTRIES VERSUS CIT EXCISE, KOLKATA - II, REPORTED IN (2015) 62 TAXMANN.COM 3(SC). THE RE LEVANT OBSERVATION MADE BY THE APEX C OURT IN THIS REGARD IS REPRODUCED HEREIN BELOW: ' WE HAVE HEARD MR. KAVIN GU LATI, LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE, AND MR. K. RADHAKRISHNAN, LEARNED SENIOR COUNSEL WHO APPEARED FOR THE REVENUE. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS - EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATE MENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSES WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSES DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS - EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPP ORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFOR ESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS - EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX - FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS - EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM ' THUS , HAVING HEARD THE LD.COUNSEL APPEARING FOR THE PARTIES, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND PARTICULARLY THE PRINC IPAL LAID DOWN BY THE HON BLE APEX C OURT AS DISC USSED HEREIN ABOVE WE FIND NO ITA NO. 768 /AHD/2018 A.Y. 2013 - 2014 4 OTHER ALTERNATIVE BUT TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO CROSS - EXAMINE TO THE CREDITORS BY SETTING ASIDE TO THE FILE OF THE LD.AO . IN THIS REGARD WE DIRECT THE L EARNED A SSESSING O FFICER TO ARRANGE A COMMISSION TO THE RE LEVANT PLACE OF RESIDENCE OF THOSE CRE DITORS/ASSESSEE FOR CROSS EXAMINATION OF THEM BY T HE ASSESSEE WITHIN A PERIOD OF TWO MO NTHS FROM THE DATE OF PASSING OF THIS ORDER AND TO PASS A REASONED ORDER THEREON AFTER GRANTING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE AND UPON TAKING INTO CONSIDERATION THE EVIDENCE ON RECORD AND ANY OTHER EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO REFER AT THE TIME OF HEARING O F THE MATTER. THUS THE ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE COURT ON 30 /01/2020 AT AHMEDABAD. - SD - - SD - ( AMARJIT SINGH ) ACCOUTANT MEMBER ( MS MADHUMITA ROY ) JUDICIAL MEMBER (TRUE COPY) AHMEDABAD; DATED 30 / 01/2020 MANISH