SUYASH SHARMA, MUMBAI V. ITO WD 19(3)(4), MUMBAI

ITA 8454/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2018 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 19-04-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 13-12-2011
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Assessee Lawyers: PRAVIN KUMAR BAFNA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Accommodation entries
• Section: 133(6); 147; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.8454/M/2011 (ASSESSMENT YEAR: 1999 - 2000) SHRI SUYASH SHARMA, 606 - B, MANJU MAHAL, 35 PALI HILL, BANDRA (W), MUMBAI 400 050. / VS. THE INCOME TAX OFFICER, WARD 19(3)(4), PIRAMAL CHAMBERS, MUMBAI. ./ PAN : AHLPSO494C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRAVIN KUMAR BAFNA / RESPONDENT BY : SHRI AKHILENDRA YADAV, DR / DATE OF HEARING : 02.11.2016 / DATE OF PRONOUNCEMENT : 02 .11.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON13.12.2011 IS AGAINST THE ORDER OF THE CIT (A) - 30, MUMBAI DATED 28.9.2011 FOR THE ASSESSMENT YEAR 1999 - 2000. 2. IN THIS APPEAL, ASSESSEE RAISED THE SOLITARY ISSUE OF CONFIRMING THE ADDITION OF RS. 5,90,400/ - . IN THE A SSESSMENT DATED 14.12.2006, AO MADE THE ABOVE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. AS PER THE DETAILS GIVEN IN THE ASSESSMENT ORDER, ASSESSEE SOLD THE DIAMOND JEWELLERY AND CREDITED THE ABOVE AMOUNT IN THE BOOKS OF ACCOUNTS . WHEN THE SAID TRANSACTION WAS ANALYZED AND ENQUIRED INTO BY INVOKING THE PROVISIONS OF SECTION 133(6) OF THE ACT, AO DID NOT GET A POSITIVE RESPONSE FROM THE BUYER OF THE JEWELLERY NAMED M/S. VISHNU JEWELLERS, PROPRIETARY CONCERN OF SHRI RISHI GROVER. IN THIS REGARD, SHRI RISHI GROVER FILED AN AFFIDAVIT CONFIRMING THE TRANSACTION. HOWEVER, IT IS THE FINDING OF THE AO THAT M/S. VISHNU JEWELLERS WERE NEVER DOING ANY REAL JEWELLERY BUSINESS AND IT WAS ONLY ENGAGED IN ISSUING ACCOMMODATION ENTRIES TO VARIO US PERSONS IN THE GRAB OF SALE OF JEWELLERY. THE AFFIDAVIT FILED BY SHRI RISHI GROVER DATED 4.12.2006 IS FOUND UNRELIABLE 2 AND THEREFORE, THE SAME WAS NO T TAKEN INTO COGNIZANCE. AO TREATED THE SAID TRANSACTION WITH M/S. VISHNU JEW ELLER AS SHAM TRANSACTION AND INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT AND MADE ASSESSMENT U/S 144 R.W.S 147 OF THE ACT. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 3. DURING THE FIRST APPELLATE AUTHORITY, ASSESSEE COULD NOT IMPROVE ITS CASE. AFTER CONSIDERING THE S UBMISSIONS OF THE ASSESSEE, CIT (A) RECORDED THAT THE INVESTIGATION MADE AT CONFESSION ADMITTING THE ABOVE STATEMENT RELATING TO THE ISSUING OF THE ACCOMMODATION ENTRIES AND NEVER ACTUALLY DELIVERED THE GOODS. EVENTUALLY, CIT (A) CONFIRMED THE AOS FINDIN G AND RELIED HEAVILY ON THE INVESTIGATION CONDUCTED BY THE DDIT (INV.), AMRITSAR AND DDIT (INV.), MUMBAI. HOWEVER, ASSESSEE WAS NEVER GIVEN THE SAID INCRIMINATING INFORMATION, IF ANY, GATHERED BY THE INVESTIGATION WING. THERE WAS NO DISCUSSION AS TO WHY THE AFFIDAVIT GIVEN BY SHRI RISHI GROVER WAS NOT TAKEN INTO COGNIZANCE. HOWEVER, CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE. AGAIN AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. DURING THE PROCEEDI NGS BEFORE US, LD COUNSEL FOR THE ASSESSEE QUESTIONED THE EX - PARTE REASSESSMENT ORDER (SUPRA). HE ALSO MENTIONED THAT WHEN THE ASSESSEE WAS NOT MAINTAINING THE BOOKS OF ACCOUNT, THE QUESTION OF REJECTION OF THE SAME DOES NOT ARISE BEFORE AN EX - PARTE ASSES SMENT IS MADE. HOWEVER, THIS ARGUMENT WAS NOT TAKEN UP BEFORE THE REVENUE AUTHORITIES. FURTHER, HE ALSO MENTIONED THAT THE INCRIMINATING INFORMATION WAS NEVER PROVIDED TO THE ASSESSEE. FURTHER ALSO, THE REASONS FOR REJECTING / IGNORING THE AFFIDAVIT OF SHRI RISHI GROVER ARE NOT ELUCIDATED BY THE REVENUE. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MA TERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES, WE FIND, CONFIRMING THE ADDITION BY THE CIT (A) , IN OUR VIEW , IS PREMATURE AS THE CIT (A) FAILED TO ADDRESS THE ABOVE ISSUES / OBJECTIONS / ARGUMENTS OF THE LD COUNSEL FOR THE ASSESSEE. IT IS A TRAI T LAW THAT THE ASSESSEE SHOULD BE CONFRONTED 3 WITH THE AVAILABLE INCRIMINATING MATERIAL IN THE POSSESSION OF THE AO BEFORE THEY WERE USED AGAINST THE ASSESSEE. WE DIRECT THE ASSESSING OFFICER TO CONFRONT THE ASSESSEE BEFORE THE ADDITION IS MADE IN THE ENSU ING SET ASIDE PROCEEDINGS. AO SHOULD ALSO GIVE REASONS AS TO WHY THE AFFIDAVIT GIVEN BY SHRI RISHI GROVER IS UNRELATABLE AND UNSUSTAINABLE IN LAW. CONSIDERING THE ABOVE DEFICIENCIES, WE ARE OF THE OPINION, GROUND RAISED BY THE ASSESSEE IS REQUIRED TO BE REMANDED. WE ORDER ACCORDINGLY AND DIRECT THE AO TO RE - DO THE ASSESSMENT ON THIS ISSUE AND PASS A SPEAKING ORDER AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED IN T HE OPEN COURT ON 0 2 N D NOVEMBER, 2016. S D / - S D / - ( MAHAVIR SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 02.11 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI