The ITO, Ward-12(4), Ahmedabad V. Shri Jitendra Ramanlal Shah, Ahmedabad

MA 69/AHD/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4767 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 26-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH ' AHMEDABAD BENCH ' AHMEDABAD BENCH ' AHMEDABAD BENCH 'B BB B' '' ' BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T. K. SHARMA JUDICIAL MEMBER T. K. SHARMA JUDICIAL MEMBER T. K. SHARMA JUDICIAL MEMBER T. K. SHARMA JUDICIAL MEMBER AND AND AND AND SHRI N.S. SAINI, ACCOUNTANT MEMBER SHRI N.S. SAINI, ACCOUNTANT MEMBER SHRI N.S. SAINI, ACCOUNTANT MEMBER SHRI N.S. SAINI, ACCOUNTANT MEMBER MISCELLANEOUS APPLICATION NO MISCELLANEOUS APPLICATION NO MISCELLANEOUS APPLICATION NO MISCELLANEOUS APPLICATION NO. .. .69 6969 69/AHD/20 /AHD/20 /AHD/20 /AHD/201 11 10 00 0 (ARISING OUT OF (ARISING OUT OF (ARISING OUT OF (ARISING OUT OF ITA NO. ITA NO. ITA NO. ITA NO.1 11 14 44 42 22 27 77 7/ // /AHD/ AHD/ AHD/ AHD/200 200 200 2009 99 9) )) ) ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR 2005 2005 2005 2005- -- -06 0606 06 INCOME TAX OFFICER, WARD 12(4), ROOM NO.108, 1 ST FLOOR NARAYAN CHAMBER, NEAR PATANG HOTEL, ASHRAM ROAD, AHMEDABAD. V/S SHRI JITENDRA RAMANLAL SHAH D-23,SAROVAR APARTMENT, UTTAMNAGAR, MANINAGAR, AHMEDABAD. [ APPELLANT ] [ RESPONDENT ] B Y REVENUE SHRI K. M. MAHESH, SR. D.R. B Y ASSESSEE NONE. O R D E R O R D E R O R D E R O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER:- THIS IS MISCELLANEOUS APPLICATION FILED BY THE INC OME TAX OFFICER, WARD 12(4), AHMEDABAD, AGAINST THE ORDER O F THE TRIBUNAL DATED 4-11-2009 PASSED IN ITA NO.1427/AHD/2009 DISM ISSING THE APPEAL OF THE REVENUE. 2. THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE READS AS UNDER: (I) THE HON'BLE ITAT HAS NOT APPRECIATED THE F ACTS THAT ASSESSEE WAS GIVEN AMPLE OPPORTUNITY OF BEING HEARD AND SUBM ITTING THE DETAILS CALLED FOR, HOWEVER ASSESSEE DID NOT ATTEND THE PRO CEEDINGS (CHART ENCLOSED). (II) NEITHER THE HON'BLE ITAT NOR LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) HAS FACTUALLY VERIFIED THE SUB MISSION OF THE ASSESSEE AND THERE IS NO FINDING REGARDING THE VERI FICATION OF SOURCE OF INVESTMENT RECORDED IN THE BOOKS OF THE ASSESSEE. (III) EVEN DURING THE REMAND REPORT PROCEEDI NG ASSESSEE COULD NOT PRODUCE CONFIRMATIONS AND PAN OF SEVERAL PARTIE S AND THEREFORE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THESE CREDITORS COULD NOT BE ESTABLISHED BY THE ASSESSEE. IT IS HUMBLY PRAYED TO EXAMINE THE CREDITWORTHINESS/GENUINENESS OF UNSECURED LOAN DEPO SITORS (`.51,35,000). -2- (IV) UNDER THE CIRCUMSTANCES, IT IS PR AYED THAT IN THIS CASE MISCELLANEOUS APPLICATION BE ENTERTAINED AND ASSESS EES CASE MAY BE REHEARD. (V) THE, THEN LEARNED ASSESSING OFF ICER WHILE SUBMITTING REMAND REPORT HAS NOT ACCEPTED ASSESSEES SUBMISSIO N, BUT REQUESTED THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) TO DECIDE THE CASE ON MERIT. 3. AFTER HEARING THE LEARNED DEPARTMENTAL REPRESE NTATIVE WE FIND THAT IN THE INSTANT CASE THE TRIBUNAL VIDE ITS ORDER DATED 4-11- 2009 PASSED IN ITA.NO.1427/AHD/09 HELD AS UNDER :- 6. WE HAVE HEARD THE LEARNED DR. NOBODY APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF SERVICE OF NOTICE BY REGISTERED POST A/D. THE ASSESSEE HAS ALSO NOT FILED ANY APPLICATION FOR ADJOURNMENT OF HEARING. IN THE CIRCUMSTANCES, WE ARE CONSTRAINED TO DISPOSE OF THE APP EAL OF THE REVENUE ON MERITS. IN THE INSTANT CASE, THE AO HA S PASSED EX-PARTE ASSESSMENT ORDER WITHOUT GRANTING PRO PER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT SEEMS TH AT THE AO MADE THE ADDITION BECAUSE THE ASSESSEE HAS NOT ATTENDED ON THE DATE OF LAST HEARING. IT IS APPARENT FROM THE RECORD THAT THE AO HAS PASSED THE ASSESSMENT ORDER 3 DAYS BEFORE THE LAST AND FINAL DATE OF HEARING GRANTED TO THE ASSESSEE. THIS CONDUCT OF THE AO SHOWS THAT HE HAS PAS SED THE ASSESSMENT ORDER WITHOUT PROPER APPLICATION OF MIND. I N OUR VIEW, THE AO HAS MADE THE IMPUGNED ADDITION OF ALL THE INVESTMENTS APPEARING IN THE BALANCE SHEET WITHOUT GIVING ANY COGENT REASON. WE FULLY AGREE WITH THE OBSERVATIONS OF THE CIT(A) THAT THE AO HAS MADE THE ADDITION ONLY BECAU SE THE ASSESSEE HAS NOT ATTENDED THE ASSESSMENT PROCEE DINGS. HOWEVER, THE ASSESSEE HAS CLARIFIED AND EXPLAINED THE POSITION WITH SUPPORTING EVIDENCE DURING THE COURSE OF REMAND PROCEEDINGS AND THE AO HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE DURING THE REMAND PROCEEDING S AND THE AO WAS SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND, THEREFORE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ENTIRE ADDITION ON THE BASIS OF THE REMAND REPORT OF THE AO DATED 27-1-2009. IN OUR VIEW, THE REVENUE WAS NOT JUSTIFIED IN FILING THE APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHEN IN THE REMAND PROCEEDINGS THE AO WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND SUGGESTED THAT NO ADDITION SHOULD BE MADE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE BE FORE PASSING EX- -3- PARTE ORDER AND THE LEARNED ASSESSING OFFICER IN TH E REMAND REPORT SUBMITTED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD NOT ADMITTED THAT ADDITION WAS NOT WA RRANTED, THEREFORE, THE ORIGINAL ORDER PASSED BY THE TRIBUNA L CONTAINED MISTAKE APPARENT FROM THE RECORD RECTIFIABLE UNDER SECTION 254(2) OF THE ACT. 5. WE FIND THAT TRIBUNAL HAS RECORDED THE FACT THAT THE LEARNED ASSESSING OFFICER HAD PASSED ASSESSMENT ORDER THREE DAYS PRIOR TO THE LAST DATE FIXED FOR HEARING BY HIMSELF. NO MATE RIAL WAS BROUGHT BEFORE US TO SHOW THAT THE ABOVE FACT OBSERVED BY T HE TRIBUNAL WAS ERRONEOUS. FURTHER, THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) IN HIS ORDER DATED 13-2-2009 PASSED IN A PPEAL NO.CIT(A)- XX/252/07-08 HAS CATEGORICALLY RECORDED AS UNDER :- 5. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF TH E LEARNED COUNSEL FOR THE APPELLANT AND HAVE ALSO CAREFU LLY GONE THROUGH THE ASSESSMENT ORDER. IN THIS CASE, DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE MATTER WAS AD JOURNED TO 10-12-07 BUT THE ASSESSMENT ORDER WAS PASSED EX-PA RTE THIS DATE I.E 07-12-07.THE FINDINGS OF THE AO AND THE CONTENTIONS PUT FORTH BY THE LEARNED COUNSEL ON THE B ASIS OF WHICH, TO CLARIFY THE REAL FACTS, A REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER VIDE THIS OFFICE LETT ER DATED 21.11.2008. THE PRESENT AO HAS GIVEN HIS VIEWS/COMMENT S POINT BY POINT IN HIS REMAND REPORT DATED 27-01-09 AS UNDER:- (1) INVESTMENTS IN FIXED ASSETS OF RS.17,13,834/-. THE ASSESSEE HAS PRODUCED PARTICULARS OF DEPRECIATI ON ALLOWANCES AS PER THE INCOME TAX ACT, 1961 AND HE HAS VERIFIED THE SAME AND STATED THAT NO NEW ADDITIONS H AS BEEN MADE DURING THE YEAR UNDER CONSIDERATION. HE HAS FOU ND THAT INVESTMENT MADE IN FIXED ASSETS IS CORRECT AND ACCEPT ABLE. (2) AS REGARDS CASH & BANK BALANCES OF RS.37,396/- THE AO HAS VERIFIED THE CASH & BANK BALANCES FROM T HE CASH BOOK & BANK BOOKS PRODUCED BEFORE HIM AND FOUND NO DISCREPANCY. (3) AS REGARDS LOANS & ADVANCES OF RS.44,34,200/- -4- THE I. T. O. HAS VERIFIED FROM THE COPIES OF ACCOUNTS OF THE PARTIES TO WHOM ADVANCES WERE MADE AGAINST WORK DON E BY THEM AND HAS FOUND THE SAME TO BE CORRECT. (4) AS REGARDS ADVANCE PAYMENT OF SALARY OF RS.15000/- THE I.T.O. HAS VERIFIED THE COPY OF ADVANCE PAYMENT OF SALARY TO STAFF AND HAS FOUND CORRECT. (5) AS REGARDS UNSECURED LOANS OF RS.5,13,500/- THE AO STATES THAT THERE ARE NOT UNSECURED LOANS BUT THESE AMOUNTS ARE RECEIVED FROM MEMBERS OF THE SCHEME, THE DETAILS OF THE MEMBERS ARE FILED. DURING THE YEAR, THE ASSESSEE HAS RECEIVED THE DEPOSITS OF RS.11,22,500/-. THE COPIES OF ACCOUNTS OF THE DEPOSITORS ARE ALSO FILED. (6) ADDITIONS OF RS.323736/- IN CAPITAL A/C. THE INCOME TAX OFFICER, WARD -12(4), AHMEDABAD HAS VERI FIED THE ADDITIONS MADE OF RS. 3,23,736/- IN THE CAPITAL ACCOU NT OF THE APPELLANT AND THE SOURCE IS DUE TO THE FLAT CA NCELLATION ALLOTTED TO SHRI ARVINDBHAI KHENGAR. THE COPY OF LEDGER ACCOUNT IS FILED. THUS, FROM THE REMAND REPORT OF THE AO, IT TRANSPIRES THAT THE EX-PARTE ASSESSMENT WAS MADE WITHOUT GRANTING PR OPER OPPORTUNITY TO THE APPELLANT TO EXPLAIN HIS CASE AND THE ADDITION WAS MADE ONLY BECAUSE THE APPELLANT HAS NOT ATTENDED ON THE DATE OF LAST HEARING. IT DOES NOT SEE M PROPER THAT ON THE ONE HAND THE AO IS GIVING LAST AND FINA L OPPORTUNITY OF BEING HEARD FOR 10-12-2007 AND ON THE O THER HAND, HE IS FINALIZING THE ASSESSMENT EX-PARTE ON 07 -2007 I.E. THREE DAYS BEFORE THE LAST AND FINAL DATE OF HEARING GRANTE D TO THE APPELLANT. THIS ITSELF MEANS THAT THE AO HAS FINAL IZED THE ASSESSMENT WITHOUT APPLYING PROPER APPLICATION OF MI ND. THE AO HAS MADE THE ADDITION OF RS.62,00,430/- OF ALL THE INVESTMENTS APPEARING IN THE BALANCE SHEET WITHOUT GI VING ANY COGENT REASONING IN HIS ASSESSMENT ORDER. ONLY BE CAUSE THE APPELLANT HAS NOT ATTENDED THE ASSESSMENT PROCEE DINGS, HE HAS MADE SUCH A HUGE ADDITION WITHOUT GIVING ANY S PECIFIC FINDINGS IN THE ASSESSMENT ORDER. SINCE THE APPELLANT HAS CLARIFIED AND EXPLAINED THE POSITION WITH SUPPORTING EV IDENCES AND SINCE THE AO HAS AFTER VERIFICATION, DURING REMA ND REPORT PROCEEDINGS, ACCEPTED THE EXPLANATION OF THE APPELLAN T, THE ADDITION MADE BY THE AO OF RS.62,00,430/- IS NOT AT ALL JUSTIFIED AND NEEDS TO BE DELETED. THE ADDITION SO MA DE IS HEREBY DELETED. -5- 6. NO MATERIAL WAS BROUGHT BEFORE THE TRIBUNAL AT T HE TIME OF THE ORIGINAL HEARING OR EVEN IN THE PRESENT PROCEED ING TO SHOW THAT ABOVE FACT WAS NOT CORRECT. THUS, WE DO NOT FIND AN Y APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH COULD BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. 7. THEREFORE, THIS MISCELLANEOUS APPLICATION IS DIS MISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 31 ST AUGUST,2010. SD/- SD/- (T. K. SHARMA) (N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED THIS 31 ST DAY OF AUGUST,2010 COMPILED AND COMPARED BY:-PATKI COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS) 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 31-8-2010 --- -------------- 2. DRAFT PLACED BEFORE AUTHORITY 31-8- 201 ----------------- 3. DRAFT PROPOSED & PLACED 31-8 -2010 ------------------ JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 31 -8-2010 ------------JM/AM 5. APPROVED DRAFT COMES TO P.S 31-8-2010 ----------------- 6. KEPT FOR PRONOUNCEMENT ON 31-8-2010 ----------------- 7. FILE SENT TO THE BENCH CLERK 31 -8-20 10 ----------------- 8. DATE ON WHICH FILE GOES TO THE -------- -------- ----------------- 9. DATE OF DISPATCH OF ORDER ------------- --- -----------------