Niranjan D. Agarwal, Ahmedabad V. The DCIT, Circle-6(1), Ahmedabad

ITA 980/AHD/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4942 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Unexplained investment; Loose papers; Principle of natural justice; Set aside
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.980/AHD/2018 ( / ASSESSMENT YEAR : 2010-11) NIRANJAN D. AGARWAL ASHOKUMAR S.GUPTA & CO. CHARTERED ACCOUNTANTS 203, NEW CLOTH MARKET 1 ST FLOOR,AHMEDABAD-380002 / VS. THE DY.CIT CIRCLE-6(1) AHMEDABAD # ./ ./ PAN/GIR NO. : ADFPA 1858 G ( #% / APPELLANT ) .. ( &#% / RESPONDENT ) #%' / APPELLANT BY : SHRI CHETAN AGRAWAL, AR &#%(' / RESPONDENT BY : SHRI S.K. DEV, SR.DR )*(+ / DATE OF HEARING 01/05/2019 ,-./(+ / DATE OF PRONOUNCEMENT 27/05/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTA NCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISS IONER OF INCOME TAX(APPEALS)-6, AHMEDABAD [CIT(A) IN SHORT] DATED 07/03/2018 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) R.W. S. 147 OF THE ITA NO.980/AHD/ 2018 NIRANJAN D. AGARWAL VS. DCIT ASST.YEAR 2010-11 - 2 - INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE ACT') DATED 28/11/2017 RELEVANT TO ASSESSMENT YEAR (AY) 2010-11 . 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- 1. LD. CIT(A) ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING ADDITION OF RS.2,79,46,000 BEING MADE BY LD. ASSESS ING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT BASED ON ENTRIES MENTIONED IN LOOSE PAPERS SEIZED/FOUND IN S EARCH ACTION U/S.132 ON M/S.DEVDEEP MALLS & DEVELOPERS PV T.LTD. WITHOUT PROVIDING COPIES OF ALLEGED LOOSE PAPERS, C OPY OF STATEMENT OF SHRI BHUPENDRA D. THAKKAR ALLEGING REC EIPT OF CASH FROM APPELLANT AND OPPORTUNITY OF CROSS EXAMIN ATION. 2. LD. CIT(A) ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING ADDITION OF RS.2,79,46,000 BEING MADE BY LD. ASSESS ING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SIX SHOPS, THOUGH ONLY ONE SHOP WAS PURCHASED. ADDITIONAL GROUNDS OF APPEAL 1. LD.AO ERRED IN LAW AS WELL AS ON FACT IN ISSUANCE OF NOTICE U/S.148 OF THE INCOME TAX ACT, 1961 (THE ACT) AND MAKING AS SESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT CONSIDERING DO CUMENTS SEIZED IN SEARCH ACTION U/S.132 OF THE ACT ON A THIRD PARTY W HICH LD. ASSESSING OFFICER HELD THAT IT BELONGS TO OR INFORMATION CONT AINED THEREIN RELATES TO THE APPELLANT AND THUS ON THESE FACTS OF THE CASE THE LD. ASSESSING OFFICER IN LAW COULD ONLY INITIATE ACTION UNDER SECTION 153C OF THE ACT. ITA NO.980/AHD/ 2018 NIRANJAN D. AGARWAL VS. DCIT ASST.YEAR 2010-11 - 3 - 3. AS PER CAPTIONED APPEAL, THE ASSESSEE HAS IMPUG NED THE ACTION OF THE LOWER AUTHORITIES IN CONFIRMING ADDITION OF RS. 2,79,46,000/- AS UNEXPLAINED INVESTMENT IN LAW AS WELL AS ON MERITS. 4. WHEN THE MATTER WAS CALLED FOR HEARING, THE LD.A R FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ADDITIO N TOWARDS UNEXPLAINED INVESTMENT FOR BOOKING OF SHOPS HINGES ON THE ALLEG ED STATEMENT OF THE BUILDER/RECIPIENT (DEV GROUP). IT WAS SUBMITTED TH AT FROM THE PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, IT WOULD APPEA R THAT THE DEVELOPER AND BUILDER M/S.DEV GROUP HAVE MADE SOME CONFESSION BEFORE THE SETTLEMENT COMMISSION THAT THEY HAVE INTER ALIA RECEIVED THE AFORESAID AMOUNT IN CASH FROM ASSESSEE FOR INVESTMENT IN SHOP S WHICH WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE LD.AR TOOK AN ORAL PLEA AND SUBMITTED THAT THE COPY OF STATEMENT OF SHRI BHUPENDRA D.THAKKAR, DIRECTOR OF DEV PROCON LTD. WAS NOT PROV IDED TO THE ASSESSEE DESPITE SPECIFIC REQUESTS. THE PARTICULAR OF CROSS -EXAMINATION OF THE WITNESS OF THE DEPARTMENT WAS ALSO NOT PROVIDED WHI LE CHARGING THE ASSESSEE WITH EXPROPRIATORY TRANSACTIONS. 5. THE LD.AR RELIED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CIT (2015) 62 TAXMANN.COM 3 (SC) TO SUPPORT ITS CONTENTION. THE LD.AR FOR TH E ASSESSEE ACCORDINGLY SUBMITTED THAT THE ORDERS OF THE LOWER AUTHORITIES SUFFERS FROM SERIOUS ITA NO.980/AHD/ 2018 NIRANJAN D. AGARWAL VS. DCIT ASST.YEAR 2010-11 - 4 - INFIRMITY TOWARDS BREACH OF NATURAL JUSTICE AND ACC ORDINGLY URGED FOR SETTING ASIDE THE ORDERS OF THE LOWER AUTHORITIES W ITH APPROPRIATE DIRECTIONS. 6. THE LD.DR FOR THE REVENUE RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO N. IT IS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE ADDITIONS MADE T OWARDS UNEXPLAINED INVESTMENT HAVE BEEN MADE PRIMARILY ON THE BASIS OF ORAL EVIDENCE OF THE THIRD PARTY; NAMELY DEV DEVELOPERS. THE ASSESSEE D ENIES TO HAVE MADE ANY PAYMENT IN CASH TO DEV DEVELOPERS AND THEREFORE CONSIDERED IT NECESSARY TO CROSS-EXAMINE THE WITNESS WHO DEPOSED BEFORE THE INCOME TAX AUTHORITIES TO THE PREJUDICE OF THE ASSESSEE. NEEDLESS TO SAY, THE STATEMENT OF THE THIRD PARTY WHICH IS MADE THE BASI S FOR ADDITION IS REQUIRED TO BE PROVIDED TO THE ASSESSEE TO ENABLE H IM TO APPRECIATE THE CONTENTS THEREOF AND QUALIFIES ITS POSITION. THE H ONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA) HA S ASSAILED THE ACTION OF THE REVENUE AND OBSERVED THAT NOT ALLOWING THE A SSESSEE TO CROSS- EXAMINE WITNESS IS SERIOUS FLAW WHICH MAKES ORDER N ULLITY AS IT AMOUNTS TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. IT IS THE CONTENTION OF THE ASSESSEE THAT SUCH OPPORTUNITY TO CROSS-EXAMINE THE WITNESS IS A MUST TO ENABLE IT TO DISCREDIT THE TESTIMONY OF THE WITNESS . THE BREACH OF ITA NO.980/AHD/ 2018 NIRANJAN D. AGARWAL VS. DCIT ASST.YEAR 2010-11 - 5 - SACROSANCT PRINCIPLES OF NATURAL JUSTICE IS FUNDAME NTAL AND GOES TO THE ROOT OF THE ISSUE. HENCE, THE PLEA OF THE ASSESSEE MERITS ACCEPTANCE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND R ESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW AFTER FOLLOWING PRINCIPLES OF NATURAL JUST ICE. IT SHALL BE OPEN TO THE ASSESSEE TO PLACE ALL THE EVIDENCES AND CONTENT IONS AS IT CONSIDER EXPEDIENT BEFORE THE ASSESSING OFFICER TO ENABLE HI M TO FRAME THE ASSESSMENT IN ACCORDANCE WITH LAW. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/ 05/2019 SD/- SD/- () ( ) (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27/ 05 /2019 3..),.)../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT. 3. 456+ 7+ / CONCERNED CIT 4. 7+ ( ) / THE CIT(A)-6, AHMEDABAD 5. 89:+)56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<* / GUARD FILE. / BY ORDER, &8++ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD