Dharam Bir Singh, Ghaziabad V. ITO, Ward-1(2), Ghaziabad

ITA 7956/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0823 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 251; 69; 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC-1 BENCH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL M EMBER ITA NO. 7956/DEL/2018 [ASSESSMENT YEAR: 2009-10] SHRI DHARAM BIR SINGH VS. THE INCOME TAX OFF ICER S/O SHRI MAM CHAND WARD 2 (1) SIKHRI KHURD, MODINAGAR GHAZIABAD GHAZIABAD PAN: GSNPS 0825 N [APPELLANT] [RESPONDENT] DATE OF HEARING : 03.06.2020 DATE OF PRONOUNCEMENT : 03.06.2020 ASSESSEE BY : SHRI ROHIT TIWARI , ADV REVENUE BY : SHRI R.K. GUPTA, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE CIT(A), GHAZIABAD DATED 28.09.2018 PERTAINING TO AS SESSMENT YEAR 2009-10. 2 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD. CIT(A) ERRED IN ENHANCING THE INCOME OF THE ASSESSEE BY RS. 15,4 4,600/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A S PER AIR INFORMATION, THE ASSESSING OFFICER CAME TO KNOW THA T THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY ALONGWITH ONE OTHER CO-OWNE R SITUATED AT SIKHRI KHURD MODINAGAR, GHAZIABAD FOR A SUM OF RS. 31 LAKHS OUT OF WHICH, HALF SHARE OF RS. 15.50 LAKHS BELONGED TO TH E ASSESSEE. 4. NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 [HER EINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] WAS ISSUED AND SERVED UP ON THE ASSESSEE. NONE ATTENDED ON BEHALF OF THE ASSESSEE AND THE ASS ESSING OFFICER WAS FORCED TO PROCEED EX-PARTE. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT THE CONSIDERATION OF RS. 15.50 LAKHS IS A SHORT TERM CAPITAL GAIN AND, ACCORDINGLY, ADDED THE SAME TO THE INCOME OF THE ASSESSEE AND COMPLETED THE ASSESSMENT EX-PARTE. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND FURNISHED SOME ADDITIONAL EVIDENCES, WHICH WERE ADM ITTED BY THE LD. CIT(A). 3 6. THE LD. CIT(A) CALLED FOR REMAND REPORT AND THE ASSESSING OFFICER FILED THE SAME VIDE LETTER DATED 28.08.2018. IN HI S REMAND REPORT, THE ASSESSING OFFICER ACCEPTED THAT THE SHORT TERM CAPI TAL GAIN WORKED OUT TO RS. 10,800/- AND THE ASSESSEES SHARE COMES TO R S. 5400/-. THE LD. CIT(A) ACCEPTED THE SHORT TERM CAPITAL GAIN COMPUTE D AT RS. 5400/-. HOWEVER, THE LD. CIT(A) WAS OF THE OPINION THAT THE SOURCE OF INVESTMENT OF RS. 15,44,600/- REMAINED UNEXPLAINED. ACCORDINGLY, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF INVESTM ENT. 7. THE ASSESSEE FILED NECESSARY DETAILS OF HIS SOUR CE OF INVESTMENT WHICH DID NOT FIND ANY FAVOUR WITH THE LD. CIT(A) W HO PROCEEDED BY CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER TO THE EXTENT OF RS. 5400/- AND MADE FURTHER ADDITION OF RS. 15,44,6 00/-. 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHE MENTLY STATED THAT THE LD. CIT(A) HAS MADE ADDITION UNDER A NEW S OURCE OF INCOME WHICH WAS NEVER CONSIDERED BY THE ASSESSING OFFICER AND THEREBY EXCEEDED HIS POWERS. IT IS THE SAY OF THE LD. COUN SEL FOR THE ASSESSEE THAT THOUGH THE PROVISIONS OF SECTION 251 OF THE AC T GIVES POWER TO THE LD. CIT(A) FOR ENHANCEMENT, BUT AT THE SAME TIME, T HE SAME CANNOT BE CONSIDERED FOR ENHANCING INCOME UNDER A NEW SOURCE OF INCOME. 4 9. STRONG RELIANCE WAS PLACED ON THE DECISION OF TH E HON'BLE HIGH COURT OF KERALA IN THE CASE OF B.P. SHERAFUDIN 399 ITR 524 AND ON THE DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF SARDARI LAL & CO. 251 ITR 864. THE LD. COUNSEL FOR THE ASSESSEE FURTHER STATED THAT EVEN THE APPROVAL GRANTED BY THE ADDITIONAL COMMISS IONER IS NOT DATED AND, THEREFORE, IT IS NOT KNOWN WHETHER THE APPROVA L WAS GRANTED BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT. 10. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE F INDINGS OF THE LOWER AUTHORITIES. IT IS THE SAY OF THE LD. DR THA T THE ASSESSEE HAS NOT ATTENDED THE ASSESSMENT PROCEEDINGS AND, THEREFORE, THE ASSESSING OFFICER HAD NO OCCASION TO EXAMINE THE DOCUMENTS FU RNISHED BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS RIGHTLY QUEST IONED THE SOURCE OF INVESTMENT THEREBY MAKING THE ADDITIONS. 11. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE O RDERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT THE ASSESSMENT P ROCEEDINGS WERE NEVER ATTENDED AND THE ASSESSING OFFICER WAS COMPEL LED TO FRAME ASSESSMENT U/S 144 OF THE ACT. IT IS EQUALLY TRUE THAT THE ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN. BEFORE THE FIRST APPELLATE AUTHORITY, THOUGH THE FI RST APPELLATE 5 AUTHORITY ACCEPTED ADDITIONAL EVIDENCES AND COMPUTA TION OF SHORT TERM CAPITAL GAIN, BUT AT THE SAME TIME, MADE ADDITIONS U/S 69 OF THE ACT THEREBY EXPLORING THE NEW SOURCE OF INCOME. 12. A PERUSAL OF THE ORDER OF THE FIRST APPELLATE A UTHORITY DOES NOT REVEAL THAT ANY NOTICE OF ENHANCEMENT WAS ISSUED TO THE ASSESSEE AND PRIOR TO SUCH NOTICE IT IS NOT KNOWN WHETHER THE LD . CIT(A) HAS ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT. THOUGH THERE IS A PASSING REFERENCE THAT THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT BUT EVIDENCES FILED BY THE ASSESSEE H AVE BEEN SIMPLY RUBBISHED BY THE LD. CIT(A). 13. IN OUR CONSIDERED OPINION, THE LD. CIT(A) OUGHT TO HAVE ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT AND IF NOT SATISFIED, THEN SHOULD HAVE ISSUED NOTICE OF ENHANCEMENT. SINCE THE ASSESSING OFFICER HAD NO OPPORTUNITY TO EXAMINE THE EVIDENCES, WE DEE M IT FIT TO RESTORE THE ENTIRE ISSUES TO THE FILE OF THE LD. CIT(A). T HE LD. CIT(A) IS DIRECTED TO EXAMINE THE EVIDENCES RELATING TO THE SOURCE OF INVESTMENT AND AFTER SATISFYING HIMSELF, SHOULD PROCEED FURTHER KE EPING IN MIND THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION U/S 69 OF THE ACT AND THE LD. CIT(A) HAS TO CONSIDER THE DECISIONS OF THE HON'BLE HIGH COURTS 6 OF KERALA AND DELHI [SUPRA]. NEEDLESS TO MENTION T HAT THE LD. CIT(A) SHOULD GIVE REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 7956/DEL/2018 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.06. 2020. SD/- SD/- [SUCHITRA KAMBLE ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03 RD JUNE, 2020. VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT ASST. REGISTRAR 4. CIT(A) ITAT, NEW DELHI 5. DR 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER