PINKY LAXMANRAJ MUTHA, MUMBAI V. ITO 15 (1)(1), MUMBAI

ITA 7835/MUM/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0577 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 18-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Peak credit; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR, AM AND SHRI AMARJIT SINGH, JM (Hearing through Video Conferencing Mode) आयकर अपील सं/ I.T.A. No. 7835/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2011-12) Pinky Laxmanraj Mutha 33, Balaram Building, Room No.5, 1 st Floor, Balaram Street, Grant Road, Mumbai- 400007. बिधम/ Vs. ITO-15(1)(1) 119, Matru Mandir, Mumbai-400007. स्थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AKZPM7856R (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) सुनवाई की तारीख / Date of Hearing: 09/11/2021 घोषणा की तारीख /Date of Pronouncement: 05/01/2022 आदेश / O R D E R PER AMARJIT SINGH, JM: The assessee has filed the present appeal against the order dated 28.10.2019 passed by the Commissioner of Income Tax (Appeals)-30, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2011-12. 2. The assessee has raised the following grounds: - “1. Violation of Natural Justice: 1. The Ld CIT(A) erred in passing the order dated 28/10/2019 without proper notice and opportunity of hearing to the assessee. Copy of remand report was also not provided, notice issued on incorrect email, thus the CIT(A) order is liable to be quashed . Assessee by: Shri Ajay R. Singh Revenue by: Shri Dharmvir (DR) ITA. No.7835/Mum/2019 A.Y. 2011-12 2 II. Addition of Rs.54,18,568/- as unexplained cash credit. 2. The Ld CIT(A) erred in considering entire deposits in the form of cash and cheques amounting to Rs54,18,568/ in the Savings Bank with ICICI bank as belonging to assessee without properly appreciating the explanation and documentary evidences including the statement recorded of father Shri Laxman Mutha, therefore the addition in hands of assessee is unjustifiable. 3. The ld CIT(A) erred in upholding the addition without appreciating that the transaction pertained to the proprietary concern of assessee’s father which was duly supported by details like the list of parties who had deposited the cash, date wise & invoice wise deposited amount against sales, sales invoice raised by M/s R.K steel and payment received alongwith confirmations of parties, books of account etc were furnished before Assessing Officer as well as CIT(A). Therefore, addition may be deleted. 4. Without prejudice to above the ld CIT(A) erred in not accepting alternative claim of the assessee that addition of at all should be restricted to peak credit or applying GP/NP ratio to the total deposit we suggested by assessee to tax actual income/profit as the entre deport cannot be added as income. 5. The Assessee craves leave to add, amend, alter or delete any of all the above grounds of appeal.” 3. The brief facts of the case are that the assessee was a housewife and her source of income was in the form of tuition income and interest ITA. No.7835/Mum/2019 A.Y. 2011-12 3 received on loans given and bank deposit. She filed the return of income on 22.03.2012 declaring total income at Rs.2,71,402/-. Information on records showed that there were cash deposits of Rs.35,62,855/- in the ICICI Bank account of the assessee. In reply, the assessee claimed that the said account was operated by her father Shri Laxmanraj S. Mutha for his business transaction of his proprietary concern M/s. R. K. Steel who was engaged in the business of trading and supply of automobile parts. Based upon the information disclosed by assessee, the statements of her father of Shri Laxmanraj S. Mutha was recorded u/s 131. The assessee’s bank account with ICICI Bank was not reflected in the books of the assessee’s father and the AO came to the conclusion that the saving bank account was undisclosed bank account by the assessee to carried out her financial transaction with the motive to evade taxes. The AO proceeded to make an addition of Rs.54,18,568/- as unexplained income earned by assessee from sources not disclosed to the Department. The assessment u/s 143(3) of the Act was completed on 14.03.2014 assessing the total income to the tune of Rs.56,89,970/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who dismissed the appeal of the assessee, therefore, the assessee has filed the present appeal before us. 4. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The assessee did not argue the case on merits. It is argued that the during the proceeding of the appeal before the CIT(A), the remand report was called and the AO submitted the remand report dated 17.01.2019 which was not considered that the CIT(A) at that time of deciding the matter of controversy, therefore, the assessee was debarred to get an opportunity of hearing and the assessee was under legal ITA. No.7835/Mum/2019 A.Y. 2011-12 4 obligation to put up his case and to get an opportunity of being heard in the interest of justice. However, on the other hand, the Ld. Representative of the Department has refuted the contention. The copy of order dated 28.10.2019 perused in which it is quite clear that the CIT(A) has called the remand report by virtue of letter dated 02.03.2016 and the AO submitted the remand report vide letter dated 17.01.2019. While deciding the matter of controversy, the remand report was not properly considered. It is against to principle of natural justice, therefore, we set aside the finding of the CIT(A) on this issue and restore the issue before the AO to decide the matter of controversy after due consideration of the remand report dated 17.01.2019. Needless to say that an opportunity of being heard is liable to be given to the assessee in accordance with law while deciding the issue. Accordingly, we set aside the finding of the CIT(A) on this issue and direct the CIT(A) decide the matter of controversy afresh accordingly. Accordingly, the issue no. 1 is decided in favour of the assessee against the revenue. The remaining issues are academic in nature, therefore, there is no need to adjudicate in the same. 5. In the result, the appeal filed by the assessee is hereby allowed for statistical purposes. Order pronounced in the open court on 05/01/2022 Sd/- Sd/- (RAJESH KUMAR) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 05/01/2022 Vijay Pal Singh, (Sr. PS) ITA. No.7835/Mum/2019 A.Y. 2011-12 5 आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) आिकर अिीलीि अनर्करण, मुंबई / ITAT, Mumbai