M/s Balbir Kumar Tarun Kumar Traders Ltd., Ludhiana V. ITO, W-5(1), Ludhiana

ITA 883/CHANDI/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0452 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ZENIA HANDA
• Keywords: Opportunity of being heard; Principle of natural justice; Accommodation entries; Reason to believe; Borrowed satisfaction
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 883/CHD/2018 / ASSESSMENT YEAR : 2009-10 M/S BALBIR KUMAR TARUN KUMAR TRADERS LTD., 671, INDUSTRIAL AREA-B, LUDHIANA. VS THE ITO, WARD 5(1),LUDHIANA. ./ PAN NO: AAACL2582R / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI SUDHIR SEHGAL # ! ' / REVENUE BY : SMT. ZENIA HANDA, SR.DR $ % ! &/ DATE OF HEARING : 20.11.2018 '()* ! &/ D ATE OF PRONOUNCEMENT : 28.11..2018 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 01.05.2018 OF CIT(A)-2, LUDHIANA PERTAI NING TO 2009-10 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. A). THAT THE LD. ASSESSING OFFICER HAS ERRED IN TAKING RECOURSE IN ISSUING NOTICE U/S 148 FOR THE YEAR UNDER CONSIDERATION AND, WHICH IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. B). THAT THERE WAS NO REASON TO BELIEVE WITH THE AS SESSING OFFICER NOR THERE IS APPLICATION OF MIND BY THE ASSESSING OFFICER, LEADI NG TO REOPENING OF THE CASE U/S 148. C). THAT THE LD. ASSESSING OFFICER HAS NEITHER APPL IED HIS INDEPENDENT MIND AND IT IS ONLY THE CASE OF BORROWED SATISFACTION ON THE BASIS OF CERTAIN INFORMATION, WHICH IS NOT PERMITTED FOR THE PURPOSES OF TAKING RECOURSE T O SECTION 148. D). THAT THE REASONS AS RECORDED BY THE ASSESSING O FFICER, ARE, THUS INCORRECT AND VAGUE IN, AS MUCH AS, THE SHARE APPLICATION MONEY HAD BEE N RECEIVED FROM 'AT ALL TIMES YOURS SECURITIES (P) LTD.', IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND NOT FROM 'M/S EUPHORIA CAPITAL PRIVATE LIMITED', WH ICH HAS BEEN MENTIONED IN THE REASONS AND, THUS, THE VERY BASIS OF REOPENING IS B AD IN LAW. 2. NOTWITHSTANDING THE ABOVE SAID GROUNDS, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN UPHOLDING THE ADDITI ON OF RS. 15 LACS AND TREATING THE SAME AS ACCOMMODATION ENTRIES AS PER FINDING GI VEN BY THE CIT(A) IN PARA 5.2 OF HIS ORDER. 3. THAT THE LD. CIT(A) HAS ALSO ERRED IN CONFIRMIN G THE ADDITION OF RS. 30,000/-- AS ALLEGED PAYMENT OF COMMISSION FOR ARRANGING THE SO CALLED ACCOMMODATION ENTRIES. 4. THAT THE LD. CIT (A) HAS IGNORED THE DOCUMENTA RY EVIDENCES FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE SHAPE OF CO NFIRMATIONS, COPY OF THE BANK ACCOUNT OF THE INVESTING COMPANY AND OTHER DETAILS, WHICH HAVE BEEN IGNORED SUMMARILY. ITA 883/CHD/2018 A.Y. 2009-10 PAGE 2 OF 3 5. THAT THE LD. CIT(A) HAS FAILED TO ALLOW THE OPP ORTUNITY TO THE ASSESSEE FOR CROSS EXAMINATION AND NO SUCH OPPORTUNITY OF CROSS EXAMIN ATION HAVE BEEN GRANTED, THE WHOLE BASIS OF ADDITION IS, THEREFORE, TOTALLY DEVO ID OF ANY VALID REASONING IN VIEW OF THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF KISHIN CHAND CHELLA RAM AS REPORTED IN 125 ITR 713. 2. THE LD. AR ADDRESSING THE GROUNDS SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE, THE MATERIAL UTILIZED BY THE TAX AUTHORITIES HAS NO T BEEN CONFRONTED TO THE ASSESSEE. ON QUERY, IT WAS CONCEDED THOUGH REASONS HAD BEEN RECO RDED AND COPY OF THE SAME IS AVAILABLE AT PAGED 39 OF THE PAPER BOOK, HOWEVER, IT WAS HIS SUBMISSION THAT THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS REQUIRED THE A O TO CONFRONT THE ASSESSEE WITH THE MATERIAL RELIED UPON WHICH HAS BEEN UTILIZED AGAINS T HIM BUT TILL DATE, IT HAS NOT BEEN CONFRONTED TO THE ASSESSEE. TO SUPPORT THE SUBMISS IONS, ATTENTION WAS INVITED TO PAGE 5 OF THE 81 PAGED ASSESSMENT ORDER WHEREIN THE WRITTEN SUBMISSIONS OF THE ASSESSEE HAVE BEEN EXTRACTED BY THE AO. ATTENTION WAS ALSO INVITED TO PAGE 11 OF THE 81 PAGED ASSESSMENT ORDER WHEREIN ASSESSEE AGAIN REITERATES THE SAID RE QUEST. FOR READY REFERENCE, RELEVANT EXTRACTS OF THE WRITTEN SUBMISSIONS EXTRACTED FROM PAGES 5 AND 11 OF THE ASSESSMENT ORDER ARE REPRODUCED HEREUNDER : PAGE 5 OF A.O. 2.1 MADAM, VERSION, VISION, INFORMATION AND NOTI ONS USED IN 'REASONS RECORDED' ARE BEYOND UNDERSTANDING, KNOWLEDGE AND BELIEF OF ASSES SEE HEREIN, AS IT COMMUNICATES NAME OF A PERSON (PRADEEP KUMAR JINDAL), WHO HAS NE VER BEEN A DIRECTOR OF COMPANY NAMED AND STATED TO HAVE PROVIDED ALLEGED ENTRY OF RS. 15,00,000/- IN THE ASSESSEE COMPANY. THE REASONS RECORDED ARE BARE PART OF SUPE RFLUOUS ACTION PROPOSED AS VERDICT FROM YOUR GOOD SELF, WITHOUT NECESSARY EXPL ORATION AND APPLICATION OF HUMAN PROBABILITIES THEREON, WITHOUT PROVIDING US COPIES, AND DOCUMENTS RELIED UPON BY THE DEPARTMENT, TANTAMOUNT AS UNILATERAL ACTION NOT CON FIRMING CANONS OF NATURAL JUSTICE AND FAIR PLAY. . PAGE 11 OF A.O. 7. IT HAS THEREFORE, BEING REQUESTED THAT BEFORE PROCEEDING ANY FURTHER IN THIS CASE, A COPY OF DOCUMENTS RELIED UPON MAY PLEASE BE PROVI DED TO MEET CANON OF NATURAL JUSTICE AND SO TO ENABLE THE ASSESSEE COMPA NY TO DEFEND ITS CASE WITHOUT PREJUDICE TO THE RIGHT TO GIVE PRESENTATION IN PERS ON AND/OR IN WRITING TO REBUT OR DEFEND ITS CASE! AFTER THE DOCUMENTS BEING PROVI DED A REASONABLE OPPORTUNITY IS ALSO REQUIRED TO BE AFFORDED FOR REP RESENTATION THEREOF AS REJOINDER AND THEREAFTER, YOUR HONOUR MAY FINALLY DISPOSE OF THE ABOVE OBJECTIONS AND/OR REJOINDER THEREOF, BY PASSING A S PEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT PROCEEDINGS, AS PER THE MANDATE OF HON'BLE SUPREME COURT IN ITS DECISION IN THE CASE OF GKN DR IVESHAFTS (INDIA) LTD. V/S D.C.L.T. (2003) 259 ITR19 (SC), WHEREIN HON'BLE APE X COURT HAS HELD AS UNDER;- 'THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF TH E SAME BY PASSING A SPEAKING ORDER .. ' ........... (EMPHASIS SUPPLIED) 3. IT WAS HIS SUBMISSION THAT THE ASSESSEE EVEN BEF ORE THE CIT(A) AGITATED THIS ISSUE. THIS STATEMENT, IT WAS SUBMITTED, WAS EVIDENCED FRO M PAGE 6 OF THE 26 PAGED ORDER WHEREIN THE ISSUES, SUBMISSIONS ARE RECORDED. RELE VANT EXTRACT IS ALSO REPRODUCED HEREUNDER : WITHOUT BRINGING ON RECORD ANY SPECIFIC EVIDENCES IN SUPPORT OF THE A.O'S CONTENTIONS AND WITHOUT EVEN PROVIDING SUCH AND SO CALLED FINDI NGS AND THE SO CALLED EVIDENCE TO THE ITA 883/CHD/2018 A.Y. 2009-10 PAGE 3 OF 3 ASSESSEE FOR REBUTTAL AND FOR CROSS EXAMINATION, IF SO REQUIRED, THAT THE ASSESSEE COMPANY HAS PAID CASH IN LIEU OF THE CHEQUES RECEIVED FROM THE SAID COMPANIES SO AS TO SUBSTANTIATE THE CLAIM OF A.O. OF PROVIDING ACCO MMODATION ENTRY BUT INSTEAD THE ID. A. () HAD MADE THE ALLEGED ADDITION WHICH IN THE RESPE CTFUL SUBMISSIONS IS NO/ ONLY AND TOTALLY ILLEGAL BUT AGAINST THE PRINCIPLES OF NATURAL JUSTI CE ALSO BESIDES WELL SETTLED LAWS OF THE LAND (EMPHASIS SUPPLIED) 4. THE SAID REQUEST, IT WAS SUBMITTED, IS AGAIN REP EATED AT PAGE 21 OF THE 26 PAGED ORDER. FOR READY REFERENCE, THE SAME IS ALSO REPRO DUCED : 1.4.1 THAT THE LD. LD. A.O. HAS MERELY RELIED UPON THE INFORMATION PASSED UPON BY INVESTIGATION WING. DELHI. THAI THE A.O. HAS FAILED TO CROSS VERIFY THE PARTICULARS AND CREDENTIALS OF THE STATEMENTS ON WHICH, IT HAD RELI ED UPON. FURTHER ASSESSEE HAS NOT BEEN GRANTED AN OPPORTUNITY OF CROSS-EXAMINATION OF THE CREDENTIALS OF THE STATEMENTS BY VIRTUE OF WHICH ACTUAL POSITION CAN B E TRANSPIRED. (EMPHASIS SUPPLIED) 5. THE LD. SR.DR WAS UNABLE TO SUPPORT THE ORDERS A S ADMITTEDLY IN THE FINDING ARRIVED AT BY THE CIT(A), THERE IS NO REFERENCE TO THE INFO RMATION BEING MADE AVAILABLE TO THE ASSESSEE. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. I FIND THAT THOUGH THE CIT(A) REPEATEDLY SAYS THAT THERE IS INF ORMATION AVAILABLE WITH THE TAX AUTHORITIES THAT THE ASSESSEE HAS AVAILED OF ACCOMM ODATION ENTRIES THROUGH PAPER COMPANY, HOWEVER IN THE FACE OF THE REPEATED REQUEST OF THE ASSESSEE, RIGHT FROM THE ASSESSMENT STAGE WHICH CONTINUES EVEN BEFORE THE CIT(A), HE FAILS TO ADDRESS THE REQUESTS. ON A CONSIDERATION OF THE MATERIAL AVAILABLE ON RECORD, I AM UNABLE TO AGREE WITH THE CONCLUSIONS DRAWN. CONSIDERING THE JUDICIAL PRECEDENT WHEREIN T HE LAW IS WELL SETTLED THAT IN CASE ANY ADVERSE INFORMATION IS RELIED UPON BY AN ADMINISTRA TIVE AUTHORITY, THEN IT IS IMPROPER FOR THE SAID AUTHORITY NOT TO CONFRONT THE SAME TO THE ASSESSEE OTHERWISE, I HOLD THAT THE ORDER PASSED IS OPEN TO THE CHALLENGE OF BEING ARBITRARY AND WHIMSICAL. THE SAID ACTION, ACCORDINGLY, CANNOT BE UPHELD. IN VIEW THEREOF, THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUES ARE RESTORED BACK TO THE FILE OF THE AO WITH A DIRECTION TO CONFRONT THE ASSESSEE WITH THE MATERIAL RELIED UPON ETC. AND THEREAFTER TO PAS S A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11. 2018. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT -3. $ / / CIT4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR