ITO, Agra v. Shri Gopal Agarwal, Agra

ITA 266/AGR/2009 | 1999-2000
Pronouncement Date: 10-03-2011 | Result: Allowed

Appeal Details

RSA Number 26620314 RSA 2009
Assessee PAN ACKPS8595G
Bench Agra
Appeal Number ITA 266/AGR/2009
Duration Of Justice 1 year(s) 8 month(s) 21 day(s)
Appellant ITO, Agra
Respondent Shri Gopal Agarwal, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 10-03-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 10-03-2011
Date Of Final Hearing 01-03-2011
Next Hearing Date 01-03-2011
Assessment Year 1999-2000
Appeal Filed On 19-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO.266/AGR/2009 ASST. YEAR: 1999-2000 INCOME TAX OFFICER 4(1) VS. SHRI GOPAL AGRAWAL AGRA. 17/205 CITY STATION ROAD AGRA. (PAN : ACKPS 8595 G). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SHARMA JR. D.R. RESPONDENT BY : NONE ORDER PER BENCH : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 26.03.2009 PASSED BY THE CIT(A) ON THE FOLLOWING GROUNDS :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE A.O. IN RESPECT OF UNEXPLAINED AND DISCLOSED RECEIPTS OF ` 12 80 000/-. 2. THAT THE LEARNED CIT(A) HAS NOT PROPERLY APPRECI ATED THE FACTS OF THE CASE AS BROUGHT ON RECORD BY THE A.O. IN THE BODY OF THE ASSESSMENT ORDER. 3. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS) DESERVES TO BE CANCELLED AND THAT OF THE A.O.S BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. 2. THE AFORESAID CASE CAME UP FOR HEARING BEFORE TH E BENCH ON 31.01.2011 HOWEVER NONE WAS PRESENT ON BEHALF OF THE ASSESSEE BECAUSE THE N OTICE OF HEARING SENT TO THE ASSESSEE BY 2 REGISTERED POST ACKNOWLEDGEMENT DUE HAS BEEN RECEIV ED BACK UNDELIVERED WITH THE POSTAL REMARK THAT THE RECIPIENT LEFT THE HOUSE 3. THIS BENCH ISSUED NOTICE TO THE ASSESSEE THROUGH LD. DEPARTMENTAL; REPRESENTATIVE (D.R.) AND ADJOURNED THE MATTER FOR HEARING ON 01.03.2011. THE LD. D.R. FILED APPLICATION DATED 01.03.2011 STATING THAT THE NOTICE OF HEARING IN TH IS CASE WAS SENT TO THE ASSESSING OFFICER 4(1) AGRA AND ALSO ENCLOSED ALONG WITH THE APPLICATION COPY OF THE ACKNOWLEDGEMENT OF SERVICE OF NOTICE AND STATED THAT THE NOTICE ISSUED BY THIS BE NCH FOR THE HEARING ON 01.03.2011 HAS BEEN SERVED ON THE ASSESSEE. INSPITE OF THE NOTICE HAVI NG BEEN SERVED UPON THE ASSESSEE THROUGH THE LD. D.R. NEITHER THE ASSESSEE NOR HIS LD. AUTHORIS ED REPRESENTATIVE APPEARED IN PERSON NOR FILED ANY APPLICATION FOR ADJOURNMENT. THEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS NOT INTERESTED TO PROSECUTE THE MATTER IN DISPUTE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE DECIDING THE ISSUE IN DISPUTE EX-PARTE AFTER HEARING THE LD. D.R. 4. AT THE TIME OF HEARING THE LD. D.R. RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND STATED THAT THE LD. FIRST APPELLATE AUTHORITY H AS DELETED THE ADDITION IN DISPUTE ON THE BASIS OF COY OF BALANCE SHEET OF THE ASSESSEE FOR THE ASSESS MENT YEARS 1998-99 & 1999-2000. HE HAS ALSO DRAWN OUR ATTENTION TOWARDS PAGE NO.4 PARA NO .3.1 OF THE IMPUGNED ORDER. THE LD. D.R. STATED THAT THE ASSESSEE HAS FILED COPY OF THESE BA LANCE SHEETS FIRST TIME BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO HAS NOT GIVEN ANY OPPORTUNI TY TO THE ASSESSING OFFICER WHICH IS CONTRARY TO RULE 46A(3) OF THE INCOME TAX RULES 19 62. HE HAS THEREFORE QUESTED THAT THE IMPUGNED ORDER MAY BE CANCELLED BY ACCEPTING THE AP PEAL FILED BY THE REVENUE. 3 5. WE HAVE HEARD THE LD. D.R. AND PERUSED THE RELEV ANT RECORDS AVAILABLE WITH US. WE HAVE THOROUGHLY GONE THROUGH THE IMPUGNED ORDER. FOR TH E SAKE OF CONVENIENCE THE FINDING GIVEN BY THE LD. FIRST APPELLATE AUTHORITY IN PARA NOS.3 TO 4 AT PAGE NOS. 4 & 5 IS REPRODUCED AS UNDER :- 3. REMAINING GROUNDS OF APPEAL RELATED TO THE ADD ITION OF ` 12 80 000/- AND ` 6 00 000/- AS INCOME. THE AR INVITED ATTENTION TO T HE REASONS RECORDED BY THE AO UNDER SECTION 148(2) OF THE ACT AND ALSO TO THE NOTICES ISSUED UNDER SECTION 142(1) DATED 10-11-2006 (TWO NOTICE) 24-01-2006 AND 05-12-2006. THE AR ALSO PRODUCED COPY OF NOTICE UNDER SECTION 148. THE NOTI CE DOES NOT SHOW THE CORRECT STATUS IN WHICH IT WAS ISSUED. IT REQUIRES THE NOT ICE TO FILE RETURN OF 'YOUR INCOME / THE FIRM'S INCOME / FAMILY'S INCOME / THE LOCAL AUT HORITY INCOME / THE COMPANY'S INCOME / INCOME OF AOP / INCOME OF BODY OF INDIVIDU ALS. AS PER THE AR THE NOTICE IS VAGUE AND DOES NOT SHOW THE CORRECT STATUS AGAIN ST WHICH THE PROCEEDINGS WERE INTENDED. THERE CAN BE NO VALID ASSESSMENT ON THE BASIS OF SUCH A VAGUE NOTICE. REFERENCE WAS INVITED TO CIT V K. K. ADINARYAN MURT HI (1967) 65 ITR 107 (SC). FURTHER THE AR PRODUCED QUESTIONNAIRE ISSUED WITH THE NOTICES UNDER SECTION 142(1). IT WAS SUBMITTED THAT THE AO PROCEEDED ON THE PRESUMPTION THAT THE ASSESSEE HAD RECEIVED GIFTS FROM SO CALLED BOGUS TR USTS. THE ASSESSEE WAS NEVER REQUIRED TO ESTABLISH THE GENUINENESS OF THE SALE T RANSACTIONS CARRIED IN BY THE ASSESSEE AND HIS MINOR CHILDREN. THE LEGAL MAXIM I S ANDI ALTERM PARTEM (NO BODY SHALL BE CONDEMNED UNHEARD). THIS IS BASED ON PRINC IPLES OF NATURAL JUSTICE. 3.1 IN THE COURSE OF HEARING THE ASSESSEE HAD FIL ED COPIES OF BALANCE SHEET OF THE ASSESSEE FOR THE ASSESSMENT YEARS 1998-99 AND 1 999-2000. THE BALANCE SHEET FOR THE A.Y. 1998-99 SHOWS THAT THE ASSESSEE POSSES SED IVPS WORTH ` 12 50 000/-. THESE WERE SOLD FOR ` 12 80 000/-. THE SALE PROCEEDS WERE INVESTED IN TH E PROPRIETORY CONCERN WHICH IS CLEAR FROM THE BALANCE SHEET FOR THE A.Y. 1999- 2000. THIS INFORMATION HAS NOT BEEN FOUND TO BE FAL SE OR MALAFIDE. IF THERE WAS ANY DOUBT ABOUT THE CAPACITY OF THE TRUSTS TO PURCH ASE THE IVPS THE ISSUE SHOULD HAVE EXAMINED IN THEIR HANDS. THERE IS NO OBLIGATIO N ON A SELLER TO ENQUIRE ABOUT THE FINANCIAL CAPACITY OF THE PURCHASER. IT IS NOT A CASE OF CREDIT WHERE THE DEBTOR IS REQUIRED TO PROVE THE CREDITWORTHINESS OF THE CR EDITOR. IT WAS SUBMITTED THAT ANNEXURE A-19 CLEARLY SHOWED THAT THE TRANSACTION N OTED THEREIN WERE OF SALE OF IVPS. THE NATURE OF TRANSACTION IN SEIZED DOCUMENT CANNOT BE CHANGED BY THE AO IN HIS OWN WISDOM. IN ANY CASE THE ASSESSEE WAS NE VER ASKED TO PROVE THE GENUINENESS OF THE SALE TRANSACTION. 3.2 IN RESPECT OF INVESTMENT BY MINORS THERE IS N O MENTION IN THE REASONS RECORDED OR IN THE NOTICES ISSUED UNDER SECTION 142 (1) OF THE ACT. IN FACT SEPARATE NOTICES WERE ISSUED UNDER SECTION 148 BY DIFFERENT AO WHO LATER TRANSFERRED THE FILES TO AO WHO MADE THE ADDITION WITHOUT PROVIDING ANY OPPORTUNITY. THE FACTS ARE THAT THE BENEFICIARIES OF TRUSTS HAVE THEIR OWN ACCUMULATED CAPITAL. AS NO 4 OPPORTUNITY WAS GIVEN THE EVIDENCE COULD NOT BE FI LED. COPIES OF THEIR BALANCE SHEETS WERE FILED IN THE COURSE OF HEARING. THESE E NTRIES ALSO APPEAR IN THE SEIZED REGISTER ANNEXURE A-19. THE SUBMISSIONS MADE ABOVE MUTATIS MUTANDI APPLY IN RESPECT OF THESE TRANSACTION ALSO. 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE MATER IAL ON RECORD AND THE ARGUMENT OF THE AR. THERE IS SUBSTANTIAL FORCE IN THE ARGUMENT THAT THE IMPUGNED ADDITIONS HAVE BEEN MADE WITHOUT PROVIDING REASONAB LE OPPORTUNITY. THE AO PROCEEDED ON PRECONCEIVED ASSUMPTION THAT WHATEVER WAS CONTAINED IN THE SEIZED REGISTER RELATED TO ALLEGED BOGUS GIFTS WHICH ALSO LEAD TO BELIEVE THAT WITHOUT APPLYING HIS OWN MIND OR VERIFICATION OF FACTS HE PROCEEDED ON INFORMATION WHICH WAS CONVEYED TO HIM BY OTHER AUTHORITIES. ASSESSMEN T CANNOT BE MADE ON THE BASIS OF UNFOUNDED PRESUMPTIONS BUT ON FACTS EVIDE NCE MATERIAL ON RECORD. THE PRINCIPLES OF NATURAL JUSTICE CANNOT BE IGNORED. WH ILE THE AO IS FREE TO MAKE ENQUIRIES BUT THE ASSESSEE HAS TO BE GIVEN OPPORTUN ITY TO REBUT THE SAME AS OPINED BY HON'BLE SUPREME COURT IN DHAKESHWARI COTTON MILL S V CIT (1954) 26 ITR 775 (SC). THE SOURCE FROM WHICH THE PURCHASERS MADE TH E INVESTMENT SHOULD HAVE BEEN ENQUIRED IN THEIR HANDS AS THERE IS UNLIKE SE CTION 68 NO OBLIGATION ON THE ASSESSEE TO PROVE THEIR CREDITWORTHINESS. IN THE PE CULIAR CIRCUMSTANCES OF THE CASE I HAVE ENTERTAINED THE EVIDENCE IN RESPECT OF MINOR'S AND AFTER EXAMINING THE SAME I AM OF THE VIEW THAT THE ADDITION OF ` 12 80 000/- AND ` 6 00 000/- CANNOT BE SUSTAINED AND ARE ACCORDINGLY DELETED. 4. IN RESPECT OF ADDITION OF ` 12 80 000/- THE ASSESSEE HAD IVPS WORTH ` 12 50 000/-. THE IVPS WERE SOLD INCLUDING ACCRUED I NTEREST. THERE WILL BE ADDITION OF ` 30 000/- FOR INTEREST. IN RESPECT OF MINORS ALSO ADDITION FOR INTEREST IF ANY SHOULD BE MADE IN THEIR HANDS FOR WHICH DIR ECTIONS ARE GIVEN UNDER SECTION 150 OF THE ACT. 6. AFTER GOING THROUGH THE AFORESAID ORDER WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS NOT GIVEN ANY OPPORTUNITY T O THE ASSESSING OFFICER TO VERIFY THE COPY OF BALANCE SHEETS FIELD BY THE ASSESSEE DURING THE COU RSE OF APPELLATE PROCEEDINGS AS MENTIONED IN PARA NO.3.1 WHICH IS CONTRARY TO RULE 46A(3) OF INC OME TAX RULES 1962. IN THE INTEREST OF JUSTICE WE SET ASIDE THE ISSUE IN DISPUTE TO THE A SSESSING OFFICER TO VERIFY THE COPIES OF BALANCE SHEETS FOR THE ASSESSMENT YEARS 1998-99 & 1999-2000 FILED BY THE ASSESSEE BEFORE THE LD. FIRST APPELLATE AUTHORITY AND DECIDE THE ISSUE IN DISPUTE AFRESH AS PER LAW AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5 ITA NO.266/AGR/2009 ASST. YEAR: 1999-2000 7. IN THE RESULT APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 10.03.2011) SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 10 TH MARCH 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY