Shri Champaklal Mohanlal Rupareliya, JUNAGADH V. The Income Tax Officer, Ward-1(2), JUNAGADH

ITA 90/RJT/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0096 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 16-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Opportunity of being heard
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI CHAMPAKLAL MOHANLAL RUPARELIYA, PROP. MANISH TRADERS, VISAVADAR PAN: ABXPR2484D (APPELLANT) VS THE ITO, WARD 1(2), JUNAGADH (RESPOND ENT) REVENUE BY : S H RI ARVIND N. SONTAKKE , SR. D . R. ASSESSEE BY: S H RI M.J. RANPURA , A.R. DATE OF HEARING : 19 - 10 - 2 016 DATE OF PRONOUNCEMENT : 27 - 10 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2007 - 08 , AR ISES FROM ORDER OF THE CIT(A) - 3, RAJKOT DATED 07 - 01 - 2015 IN APPEAL NO. CIT(A) - 3 / RJT/0394/09 - 10, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 90 / RJT /20 15 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 2 2. THE ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: - 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF LNCOME - TAX( APPEAL) - )V, RAJKOT [HEREINAFTER REFERRED TO AS THE 'CIT(A)'] ERRED ON FACTS AS ALSO IN LAW IN DISMISSING APPEAL WITHOUT ALLOWING PROPER OPPORTUNITY OF BEING HEARD. THE APPEAL MAY KINDLY BE RESTORED BEFORE THE ID. CIT(A). 3.0 THE ID. CIT(A) ERRED ON FACT AS ALSO IN LAW IN CONFIRMING THE ADDI TION OF RS. 8,09,000/ - ON ACCOUNT OF ALLEGED PURCHASES OF WHEAT FROM UNACCOUNTED FUNDS. THE ADDITION IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND MAY KINDLY BE DELETED. 3 . IN THIS CASE, THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 31 ST MARCH, 2008 DECLARING INCOME OF RS. 1,80,000/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED FROM THE TRADING ACCOUNT THAT THERE IS VERY NOMINAL SALE OF RS. 10, 73, 375/ - OF ONE 1000 BAGS OF WHEAT AND PURCHASE PRIC E OF THESE WHEAT WAS SHOWN AT RS . 2 ,4 3 ,7 50/ - . THE ASSESSING OFFICER HAS CALLED THE DETAIL OF NAME AND ADDRESS OF PARTIES FROM WHOM PURCHASES WERE MADE AND PAYMENT MADE BY THE PARTIES. THE DETAIL FURNISHED BY THE ASSESSEE IS REPRODUCED AS UNDER: - SR. NO. NAME AND ADDRESS OF THE ASSESSEE OPENING BALANCE PURCHASE S PAYMENT DEBIT BALANCE 1. SHRI KURJIBHAI SAVJIBHAI AT : - PREMPARA, TAL. VISHAVADAR 00 80,000/ - 1 00 80,000/ - 2. SHRI BHIMJIBHAI SAVJIBHAI, AT : - PREMPARA, TAL. VISHAVADAR _ 00 79,000/ - 00 7 9,000/ - I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 3 3. SHRI BHUPATBHAI PARBATBHAI, AT : - PREMPARA, TAL. VISHAVADAR 00 81,000/ - 00 81,000/ - 4. SHRI RATIBHAI RAMBHAI, AT : - PREMPARA, TAL. VISHAVADAR 00 80,250/ - 00 80,250/ - 5 - \ SHRI KESHUBHAI BAVABHAI, AT : - PREMPARA, TAL. VISHAVADAR 00 79,750/ - 00 79,750/ - 6. SHRI VITHALBHAI BAGHABHAI AT : - PREMPARA, TAI. VISHAVADAR 00 80,000/ - 00 80,000/ - 7. SHRI RATIBHAI NARANBHAI AT : - . VISHAVADAR 00 1,23,750/ - 00 1,23,75 0/ - 8. SHRI RAVJIBHAI NARANBHAI AT : - VISHAVADAR 00 1,23 ,750/ - 00 1,23,75 0/ - 9. SHRI HARIBHAI BACHUBHAI AT : - VISHAVADAR 00 81,500/ - 00 81,500/ - TOTAL 8,09,000/ - 8,09,00 0/ - 4. AFTER OBSERVING THE ABOVE STATED UN - USUAL NATURE OF TRANSACTIONS , THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO FILE CONFIRMATION LETTER FROM THE AGRICULTURISTS FROM WHERE THE PURCHASES WERE MADE. THE ASSESSEE HAS FILED PHOTOCOPY OF PURCHASE VOUCHERS FROM ALL THE REFERRED PERSONS AND NO OTHER EVIDENCE WAS FILED , THEREFORE, THE ASSESSING OFFICER HAS DE PUTED THE INSP ECTOR TO VERIFY SUCH VOUCHERS BY MAKING ON THE SPOT INQUIRY FOR VERIFI CATION FROM THE PERSONS. IN THIS CONNECTION, THE REPORT O F THE INSPECTOR SUBMITTED TO THE ASSESSING OFFICER IS REPRODUCED AS UNDER: - I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 4 'AS DIRECTED BY YOU, I UNDERSIGNED VISITED ON 30. 11.2009 AT VILLAGE PREMPARA AND VISAVADAR TO INQUIRE WHETHER THE ASSESSEE HAS PURCHASED WHEAT DURING THE F,Y. 2006 - 07 AS PER VOUCHERS PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE NAMES OF VIZ. 1. SHRI RATILAL NARANBHAI DUDHAT, VISAVADAR ; 2. SHRI KESHUBHAI BAVABHAI RIBADIYA, PREMPARA ; 3. SHRI RATIBHAI RAMBHAI RAIYANI, PREMPARA ; 4. SHRI KURJIBHAI SAVJIBHAI VAISHNAV, PREMPARA ; 5. SHRI BHIMJIBHAI SAVJIBHAI VAISHNAV, PREMPARA : 6. SHRI BHUPATBHAI PARBATBHAI BHUVA, PREMPARA ; 7. SHRI VITHALBHAI BAGHABHAI DUDHAT; AND 8. SHRI RAVJIBHAI NARANBHAI DUDHAT VISAVADAR. 2. I CONTACTED ALL THE AFORESAID PERSONS AND SHOWN VOUCHERS FOR VERIFICATION TO ASCERTAIN WHETHER THE TRANSACTION IS GENUINE OR NOT ? IN RESPONSE TO THIS, ALL THE AFORESAID PERSON S HAVE STATED, WE ARE GENERALLY , SOLD AGRICULTURAL PRODUCE DIRECTLY TO THE MARKETING YARD AND AFTER VERIFICATION OF THE VOUCHERS BY ME, THEY HAVE STATED THAT WE HAVE NEVER SELLING WHEAT TO THE ASSESSEE I.E. SHRI CHAMPAKLAL MOHANLAL RUPARELIA, VISAVADAR. SUBSEQUEN TLY, THEY CONFIRMED THE DENIAL OF SALE TRANSACTION WITH SHRI CHAMPAKLAL MOHANLAL RUPARELIA OF VISAVADAR IN WRITING ON THE COPY OF SALE VOUCHERS AND PUT THEIR SIGNA TURE. XEROX COPY OF VOUCHERS ARE ENCLOSED HEREWITH. 5. THEREAFTER, THE ASSESSING OFFICER HA S MADE INQUIRY FROM VILLAGE SA RPANCH WHO IDENTIFIED ALL THE PERSONS STATED ABOVE AND STATED THAT THEY HAVE NOT MADE ANY SALE BID TO THE ASSESSEE. THE INQUIRY MADE BY THE ASSESSEE IN THIS CONNECTION IS REPRODUCED: - 4. IN VIEW OF THE RESULT OF THE SPOT IN QUIRY MADE BY THE INSPECTOR, I CAMPED AT VILLAGE : - PREMPARA, TAL. VISHAVADAR. THE VILLAGER SURPANCH IDENTIFIED S/SHRI BHUPATBHAI PARBATBHAI, SHRI KESHUBHAI BAVABHAI, SHRI VITHALBHAI BAGHABHAI, SHRI RATILAL RAMBHAI, SHRI KURJIBHAI SAVAJIBHAI & SHRI RAVAJIB HAI NARANBHAI. THEY HAVE GIVEN DEPOSITION BEFORE ME AND THE VILLAGE SARPANCH TO THE EFFECT THAT THEY HAVE NOT MADE ANY SALE OF WHEAT TO SHRI CHAMPAKLAL MOHANL AL RUPARELIA, PROP. M/S. MANISH TRADERS DURING F.Y. 2006 - 07 AND NO AMOUNT IS RECEIVABLE FROM THE S AID PARTY AS ON 31.03.2007. A COPY OF THE DEPOSITION WAS FORWARDED TO THE ASSESSEE VIDE LETTER NO. JND/1(2)/SCRU. - 47/09 - 10 DATED 08.12.2009 WHICH READS AS UNDER ; I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 5 DURING THE COURSE OF ASSESSMENT PROCEEDINGS YOU HAVE SUBMITTED VOUCHERS FOR PURCHASE OF WHEA T (GHAU) FROM FOLLOWING AGRICULTURISTS OF VILLAGE : - PREMPARA AND VISAVADAR; 1] SHRI KURJIBHAI SAVJIBHAI, PREMPARA RS. 80,000/ - 2] SHRI BHIMJIBHAI SAVJIBHAI, PREMPARA RS. 79,000/ - 3] SHRI BHUPATBHAI PARBATBHAI, PREMPARA RS. 81,000/ - 4] SHRI RATIBHAI RAMBHAI, PREMPARA RS. 80,250/ - 5] SHRI KESHUBHAI BAVABHAI, PREMPARA RS. 79,750/ - 6] SHRI VITHALBHAI BAGHABHAI, PREMPARA RS. 80,000/ - 7] SHRI RATILAL NARANBHAI, VISAVADAR RS. 1,23,750/ - 8] SHRI RAVJIBHAI NARANBHAI, VISAVADAR RS. 1,23,750/ - 9] SHRI HARIBHAI BACHUBH AI, VISAVADAR RS. 81,500/ - ** ON INQUIRY BEING MADE FOR VERIFICATION OF THESE PURCHASES IT IS INFORMED BY THE AGRICULTURIST IN WRITING THAT THEY HAVE NOT ENTERED INTO ANY TRANSACTION IN RESPECT OF SALE /PURCHASE OF WHEAT OR ANY OTHER AGRICULTURAL PRODUCT DURING THE F.Y. 2006 - 07 AND 'THEY DENIED IN RES PECT OF ANY AMOUNT DUE FROM YOU. ** FROM THE ABOVE FACTS IT APPEARS THAT THE ABOVE SUNDRY CREDITORS REFLECTED IN THE BALANCE SHEET DTD. 31.03.2007 ARE NOT GENUINE AND I PROPOSE TO ADD THE AMOUNT MENTIONED AS PAYABLE AGAINST THE NAMES OF ABOVE MENTIONED PERSONS AS FICTITIOUS LIABILITY. A COPY OF STATEMENT OF RELEVANT PERSONS ARE ENCLOSED HEREWITH. IF, YOU WISH TO CONFRONT THE ABOVE FINDINGS, AN OPPORTUNITY OF BEING HEARD IN PERSONS OR THROUGH AN AUTHORIZED REPR ESENTATIVE IS HEREBY GIVEN ON 15.12.2009 AT 11:30 A.M. PLEASE NOTE THAT NO FURTHER OPPORTUNITY WILL BE GRANTED IN THIS MATTE AND THE ASSESSMENT PROCEEDINGS WILL BE FINALIZED ACCORDINGLY. PLEASE TREAT THIS LETTER AS NOTICE U/S. 142(1) OF THE I. T. ACT, 1961 . 6 . THE ASSESSEE HAS STATED TO THE ASSESSING OFFICER THAT ALL THE DEPOSITION FROM THE AGRICULTURI STS WERE RECORDED IN HIS ABSENCE AND THEREFORE HE ASKED FOR CROSS - EXAMINATION . THEREAFTER, THE ASSESSEE WAS A S KED TO REMAIN PRESENT AT THE GOVT. GUEST HOUS E VISHAVADAR FOR THE PURPOSE OF TAKING CROSS EXAMINATION. THE ASSESSEE HAS DEPUTED HIS SON , SHRI SHAILESH C. RUPARELIA ON 17 - 12 - 2009. I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 6 HOWEVER, HE FILED RETURN ON THE SAME DATE STATING THAT ON ACCOUNT OF SUDDEN ILLNESS OF HIS FATHER AND HIS ADVOCATE HE IS ALSO NOT AVAILABLE AT THE PLACE. THE ASSESSING OFFICER HAS GIVEN FURTHER OPPORTUNITY TO THE ASSESSEE BUT THEY HAV E NOT MADE COMPLIANCE. THE ASSESSING OFFICER HAS ALSO MENTIONED THAT EVEN IN THE EARLIER YEARS , THE PAYMENT TO THE AGRICULTURISTS WAS SHO WN AS OUTSTANDING BY THE ASSESSEE AND THERE IS OUTSTANDING LIABILITY IN THE BALANCE SHEET TO THE AMOUNT OF RS. 41 , 50 , 465/ - . ON THE OTHER HAND, THE SUND RY LIABILITY IS ADVANCED TO MAHARANI ORTHO CARE, AHMEDABAD AND MARK HEALTH CARE, AHMEDABAD . THE ASSESSI NG OFFICER HAS POINTED OUT THAT IT IS VERY CLEAR FROM THE BALANCE SHEET THAT UNACCOUNTED MONEY HAS BEEN ROUTED THROUGH SUCH TRANSACTION TO MAKE INVESTMENT IN THE ABOVE TWO SOURCES WHICH ARE CLOSE RELATIVE S OF THE ASSESSEE RUNNING A BUSINESS OF MEDICAL INST RUMENT IN AHMEDABAD. IN VIEW OF THE ABOVE STATED FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER HAS CONCLUDED THAT THE ASSESSEE HAS UTILIZED HIS OWN UNACCOUNTED MONEY IN MAKING PURCHASE OF WHEAT WHICH WAS SOLD TO OTHER PERSON S AND CHEQUE/DRAFT WERE RECEIV ED TOWARDS SALE PROCEED S . THEREFORE, THE ASSESSING OFFICER HAS ADDED RS. 8,90,000/ - TO THE TOTAL INCOME OF THE ASSESSEE AS HIS OWN UNACCOUNTED INCOME AND UTILIZED IN MAKING PURCHASES OF WHEAT. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASS ESSEE HAS FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX(A). THE LD. COMMISSIONER OF INCOME TAX HAS STATED THAT HE HAS PROVIDED OPPORTUNITIES TO THE ASSESSEE BUT HE FAILED TO MAKE ANY COMPLIANCE AND ALSO FAILED TO PRODUCE ANY EVIDENCE/EXPLANATION DESPITE SEVERAL OPPORTUNITIES PROVIDED TO THE ASSESSEE. THEREAFTER, I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 7 THE LD. COMMISSIONER OF INCOME TAX(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY PLACING RELIANCE IN THE CASE OF MOTER GENERAL FINANC E VS. CIT ( 254 ITR 449 ) . DURING THE COURSE OF APPEL LATE PR OCEEDINGS, LEARNED COUNSEL STATED BEFORE US THAT THE LD. COMMISSIONER OF INCOME TAX(A) HAS DISMISSED THE APPEAL WITHOUT ALLOWING APPROPRIATE OPPORTUNITY BEING OF HEARD TO THE ASSESSEE AND ALSO STATED THAT ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX(A) ARE TOTALLY UNJUSTIFIED ON FACTS AND IN LAW. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(A). 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED T HE MATERIAL ON RECORD AND WE FIND THAT THE ASSESSEE FAILED TO ATTEND THE APPELLA TE PROCEEDING BEFORE THE LEARNED C IT(A) . AS A RESULT THE LD.CIT(A) HAS DISMISSED THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE WITHOUT DECIDING ON MERIT . DURING THE COURSE OF APPELLA T E PROCEEDING BEFORE US THE LEARNED COUNSEL HAS REQUESTED TO PROVIDE OPPORTUNITIES OF BEING H E ARD IN THIS MATTER. THEREFORE, KEEPING IN VIEW THE INTEREST OF JUSTICE , WE RESTORE THIS MATTER TO THE FILE OF LD. COMMISSIONER OF INCOME TAX( A) TO DEC IDE T HE APPEAL ON MERIT AFRESH AFTER PROVID ING SUFFICIENT OPPORTUNIT IES TO THE ASSESSEE . I.T.A NO. 90 /RJT /20 15 A.Y. 2007 - 08 PA GE NO SHRI CHAMPAKLAL MOHANLAL RUPARELIYA V S. ITO 8 8. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSE S . ORDER PR ONOUNCED IN THE OPEN C OUR T ON 27 - 10 - 201 6 SD/ - SD/ - (RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /10 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT