SHRI NARENDRA RATANLAL RATHI, Nagpur V. ITO, WARD-5(2), Nagpur

ITA 96/NAG/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7689 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Unexplained investment; Opportunity of being heard; Deemed to accrue or arise in india
• Section: 234B; 131; 68; 69

Judgement Text

1 ITA NO. 96/NAG/2013. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 96 /NAG/201 3 ASSESSMENT YEAR : 200 5 - 06 . SHRI NARENDRA RATANLAL RATHI, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 5(2), NAGPUR. PAN ABPPR 3909K. APPELLANT. RESPONDENT. APPELLANT BY : SHRI SANJAY THAKAR. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 06 - 12 - 2016 DATE OF PRONOUNCEMENT : 12 TH JANUARY, 2017. O R D E R. T HIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF L EARNED CIT(APPEALS) DATED 11/12/2012 AND PERTAINS TO ASSESSMENT YEAR 2005 - 06. THE GROUNDS FOR APPEAL READ AS UNDER : 1. THE ORDER PASSED IS ILLEGAL, INVALID AND BAD IN LAW. 2. THE INCOME DETERMINED AT RS.12,85,608/ - IS UNJUSTIFIED, UNWARRANTED AND EX CESSIVE. 3. THE ADDITION OF RS.2.50 LACS AS UNEXPLAINED INVESTMENT AND BROUGHT TO TAX U/S 69 OF THE ACT WAS ILLEGAL, INVALID AND BAD IN LAW. 4. THE ADDITION OF RS.6.30 LACS [ 3.80 LACS + 2.50 LACS] AS UNEXPLAINED INVESTMENT ON ACCOUNT OF CREDITORS AND BROUGHT T O TAX U/S 69 OF THE ACT WAS ILLEGAL, INVALID AND BAD IN LAW. 5. THE ADDITION OF RS.2.11 LACS AS UNEXPLAINED INVESTMENT ON ACCOUNT OF CREDITS IN BANK ACCOUNTS AND BROUGHT TO TX U/S 69 OF THE ACT WAS ILLEGAL, INVALID AND BAD IN LAW. 2 ITA NO. 96/NAG/2013. 6. THE ADDITION ON ACCOUNT OF S ALE PROCEEDS SOF OLD SHARES AMOUNTING TO RS.46.748 WITHOUT DOING EXERCISE TO CHECK D - MAT ACCOUNT AND JUST CALLING FOR OLD PURCHASE BILLS, WERE TOTALLY UNJUSTIFIED AND ILLEGAL. 7. THE ADDITION ON ACCOUNT OF LOAN ADDITION OF RS.1,25,000/ - AS UNEXPLAINED CASH CR EDIT AND ADDED U/S 68 WERE TOTALLY UNJUSTIFIED AND ILLEGAL. 8. THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ASSESSMENT ORDER OF A SIMPLE SALARIED EMPLOYEE OF M.S.E.B. (GENERATION). 9. THE LEARNED ASSESSING OFFICER ERRED IN CHARGING INTEREST U/S 234B AND IN ITIATING THE PENALTIES U/S 271(1) AND 271(1)(B). 2. I N THIS CASE THE ASSESSEE S SOURCE OF INCOME IS FROM SALARY . D URING THE COURSE OF ASSESSMENT A SSESSING O FFICER EXAMINED THE ASSESSEE S SOURCE OF INVESTMENT IN HOUSE AND THE CREDITORS SHOWN. THE A SSESSING O FFICER WAS NOT CONVINCED WITH ASSESSEE'S REPLY. HE MADE THE FOLLOWING ADDITIONS : I) DIFFERENCE IN INVESTMENT IN HOUSE SHOWN AND CASH FLOW STATEMENT. RS.2,50,000 II) UNEXPLAINED INV ESTMENT ON A/O OF CREDITORS TREATED AS DEEMED INC OME U/S 69. RS.3,80,000 III) UNEXPLAINED INVESTMENT ON A/C OF FRESH CREDITORS TREATED AS DEEMED INCOME U/S 69. RS.2,50, 000 IV) UNEXPLAINED INVESTMENT ON A/C OF CREDITS TO BANK A/CS TREATED AS DEEMED INCOME U/S 69. RS.2,11,000 V) INCOME FROM OTHER SOURCES RS. 46,748 (SALE PROCEEDS OF SHARES) 3. A GAINST THE ABOVE ORDER ASSESSEE APPEA L ED BEFORE THE L EARNED CIT(APPEALS) . THE L EARNED (CIT(APPEALS) OBTAINED REMAND REPORT FROM THE A SSESSING O FFICER. IN THE REMAND REPORT A SSESSING O FFICER CONF I RMED ACTION OF THE PREVIOUS A SSESSING O FFICER. HE INTER ALIA OBSERVED THAT THE ASSESSEE HAS NOT 3 ITA NO. 96/NAG/2013. BEEN ABLE TO PRODUCE SOME OF THE CREDITORS FOR VERIFICATION. HE REJECTED ASSESSEE'S PLEA THAT NOTICE BE ISSUED TO THE CREDITORS UNDER SECTION 131 OF THE I NCOME T AX A CT. SOME OF THE CONTENTIONS OF THE ASSESSEE WERE ALSO REJECTED ON THE PLEA THAT THESE WERE NOT MADE IN THE ORIGINAL COURSE OF ASSESSMENT. CONSIDERING THE REMAND REPORT L EARNED CIT(APPEALS) AFFIRMED THE ACTION OF THE A SSESSING O FFICER. 4. AGAINST THE ABOVE ORDE R ASSESSEE IS IN APPEAL BEFORE THE ITAT 5. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEE IS NOW IN THE POSITION TO PRODUCE THE CREDITORS FOR VERIFICATION. HE ALSO SUBMITTED A CHART WHEREBY HE HAS GIVEN THE DETAILS OF ASSESSEE'S INVESTMENTS, THE SOURCE TH ERE OF AND CERTAIN OTHER FACTUAL DETAILS. 6. PER CONTRA L EARNED D EPARTMENTAL R EPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. UPON CAREFUL CONSIDERATION I FIND THAT SINCE THE LEARNED COUNSEL OF THE ASSESSEE HAS NOW SUBMITTED CERTAIN ADDITIONAL FACTUAL DETAILS AND THAT HE IS PREPARED TO PRODUCE THE CREDITORS FOR VERIFICATION, THE INTEREST OF JUSTICE WILL BE SERVED IF THE ISSUE IS REMITTED TO THE FILE OF THE A SSESSING O FFICER. I FURTHER NOTE THAT THE ASSESSING O FFICER WAS NOT CORRECT IN REFUSING TO ISSUE NOTICE UNDER SECTION 131 AND ALSO REJECT ING THE CONTENTIONS ON THE GROUND THAT THEY WERE NOT SUBMITTED IN THE COURSE OF ORIGINAL ASSESSMENT. ACCORDINGLY THE A SSESSING O FFICER IS DIRECTED TO CONSIDER THE ISSUE A FRESH AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD . 4 ITA NO. 96/NAG/2013. 8. I N THE RESULT THIS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JANUARY., 2017. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 12 TH JANUARY, 2017. COPY FORWARDED TO : 1. SHRI NARENDRA R. RATHI, PLOT NO. 20, PUBLIC CO - OP. SOCIETY, ATREY LAYOUT, NAGPUR. 2. I.T.O., WARD - 5 ( 2 ), NAGPUR. 3. C. I.T. - I II, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.