ITO (IT) 3(1), MUMBAI v. PRAKSH J BHOJWANI, MUMBAI

ITA 5410/MUM/2014 | 2008-2009
Pronouncement Date: 28-10-2016 | Result: Dismissed

Appeal Details

RSA Number 541019914 RSA 2014
Assessee PAN AFQPB6703E
Bench Mumbai
Appeal Number ITA 5410/MUM/2014
Duration Of Justice 2 year(s) 2 month(s)
Appellant ITO (IT) 3(1), MUMBAI
Respondent PRAKSH J BHOJWANI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-10-2016
Date Of Final Hearing 30-05-2016
Next Hearing Date 30-05-2016
Assessment Year 2008-2009
Appeal Filed On 27-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI . . BEFORE SHRI R.C.SHARMA AM AND SHRI AMARJIT SINGH JM / I.T.A. NO.5410/MUM/2014 ( / ASSESSMENT YEAR: 2008-09) INCOME TAX OFFICER (IT) 3(1) ROOM NO.114 1 ST FLOOR SCINDIA HOUSE BALLARD PIER N.M.ROAD MUMBAI - 400038 / VS. MR. PRAKASH J. BHOJWANI FLAT NO.6A PLOT NO.198/199 KHAR GARDEN 10 TH ROAD KHAR(W) MUMBAI - 400052 ./ ./ PAN/GIR NO. : AFQPB6703E ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 18.08.2016 /DATE OF PRONOUNCEMENT: 28.10.2016 / O R D E R PER AMARJIT SINGH JM: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 28.02.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 10 ASSESSEE BY: SHRI NIRAJ SETH DEPARTMENT BY: SHRI R.A.DHYANI ITA NO.5410/M/2014 A.Y. 2008-09 2 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2008-09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE U/S.68/69 OF THE ACT WITHOUT APPRECIATING THE FACT THAT LD. CIT(A) HAS WHILE ADMITTING ADDITIONAL EVIDENCES UNDER RULE 46A FAILED TO APPRECIATE THAT THERE WAS NOTHING ON RECORD TO SUGGEST ANY EXTRANEOUS CIRCUMSTANCES PREVENTING ASSESSEE FROM SUBMITTING THE SAME BEFORE THE A.O. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) FAILED TO APPRECIATE THAT SOURCES OF INVESTMENT CAN BE SAID TO BE EXPLAINED ONLY WHEN ASSESSEE COULD DEMONSTRATE THE SOURCES FROM WHERE THE MONEY HAD COME TO HIS NRO ACCOUNT. FURTHER LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE FAILED TO DEMONSTRATE THE CREDITWORTHINESS AND GENUINENESS OF THE SOURCES. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER RECEIVED AN INFORMATION FROM ADDL. COMMISSIONER OF INCOME TAX RANGE-27 NEW DELHI VIDE HER LETTER DATED 06.10.2010 TO THE FACT THAT SHRI PRAKASH JAIKISHAN PAN NO.AFQPB6703E HAS BEEN ASSESSEED IN HER CHARGE WHO HAS GIVEN AN ADVANCE OF RS.2..50 CRORES TO MR. DEEPAK BHARDWAJ FROM HDFC ACCOUNT NO.SB-NRO- 0011010011855. THEREAFTER ON RECEIPT OF THE LETTER IT WAS FOUND THAT THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME FOR THE A.Y.2008-09. IT ITA NO.5410/M/2014 A.Y. 2008-09 3 WAS ALSO FOUND THAT THE ASSESSEE WAS THE NON-RESIDENT INDIAN. THEREAFTER NUMBER OF NOTICES WERE SENT TO HIM BUT THE ASSESSEE DID NOT MAKE ANY COMPLIANCE THEREFORE THE ASSESSMENT WAS COMPLETED U/S.144 OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT) BY ASSESSING HIS INCOME TO THE TUNE OF RS.2 52 35 000/-. THEREAFTER THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAS EXPLAINED THE SOURCES OF PAYMENT THEREFORE DELETED THE ADDITION TO THE TUNE OF RS.2 50 00 000/-. FEELING AGGRIEVED THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 TO 3:- 4. ALL THE ISSUES ARE INTERCONNECTED THEREFORE ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE LEARNED REPRESENTATIVE OF THE REVENUE HAS ARGUED THAT THE CIT(A) HAS WRONGLY ADMITTED THE ADDITIONAL EVIDENCE WHEREAS THE ASSESSEE WAS NOT PRECLUDED BY THE ASSESSING OFFICER TO ADDUCE THE ADDITIONAL EVIDENCE THEREFORE THE ORDER OF THE CIT(A) IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. IT IS ALSO ARGUED THAT THE ASSESSEE NOWHERE DEMONSTRATE THE CREDITWORTHINESS AND GENUINENESS OF THE SOURCES OF THE AMOUNT IN QUESTION I.E.RS.2.5 CRORES THEREFORE IN THE VIEW THE SAID CIRCUMSTANCES THE CIT(A) HAS WRONGLY ALLOWED THE APPEAL OF THE ASSESSEE HENCE THE ORDER OF THE CIT(A) IS LIABLE TO BE SET ITA NO.5410/M/2014 A.Y. 2008-09 4 ASIDE. HOWEVER ON THE OTHER HAND THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS PLACED RELIANCE ON THE ORDER PASSED BY THE CIT(A) IN QUESTION. 5. ON APPRAISAL OF THE ORDER DATED 30.12.2010 PASSED BY THE ASSESSING OFFICER IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A NON- RESIDENT INDIAN. IT IS NOT IN DISPUTE THAT THE ASSESSEE ADVANCED A SUM OF RS.2.50 CRORES TO SHRI DEEPAK BHARDWAJ FROM HIS HDFC BANK ACCOUNT FOR THE A.Y.2008-09. THE ASSESSING OFFICER ISSUED THE NOTICES TO THE ASSESSEE WHICH WERE NOT SERVED UPON ON ACCOUNT OF THIS FACT THAT THE ASSESSEE WAS RESIDING OUTSIDE COUNTRY. THE ASSESSMENT ORDER WAS PASSED IN THE ABSENCE OF THE ASSESSEE AS IN HIS ABSENCE NOTHING WAS EXPLAINED. IT IS NOT IN DISPUTE THAT IN THE APPEAL BEFORE THE CIT(A) THE ASSESSEE FILED AN APPLICATION FOR ADDITIONAL EVIDENCE WHICH WAS ALLOWED. HOWEVER THE CIT(A) ALSO CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER TO CERTIFY SOME FACTS ON RECORD. THEREAFTER THE CIT(A) CONSIDERED THE ADDITIONAL EVIDENCE AS WELL AS REMAND REPORT OF THE ASSESSING OFFICER AND DECIDED THE MATTER OF CONTROVERSY ACCORDINGLY IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION OF THE FINDING OF THE CIT(A) IS HEREBY REPRODUCED BELOW:- 16. FURTHER TO THAT THE APPELLANT HAS ALSO FILED COPY OF BANK STATEMENT OF THE APPELLANTS BANK ACCOUNT MAINTAINED WITH HDFC BANK TULSIANI CHAMBERS BRANCH NARIMAN POINT MUMBAI THROUGH WHICH THE AFORESAID SUM OF ITA NO.5410/M/2014 A.Y. 2008-09 5 2 50 00 000/- WAS ADVANCED TO SHRI DEEPAK BHARADWAJ. EVEN I FIND THAT THE APPELLANT IN SUPPORT OF THE SOURCE OF THE SAID SUM HAS FILED THE COPY OF DOCUMENTS OF COSMOS BRAND DISTRIBUTOR PRIVATE LIMITED AND ALSO OF BANK STATEMENT OF STANDARD CHARTERED BANK OF M/S.TIME MACHINE GROUP FXCO. THE APPELLANT HAS ALSO FILED BANK STATEMENT OF STANDARD CHARTERED BANK OF M/S.BHOJWANI INVESTMENT CORPORATION LLC FROM WHERE THE APPELLANT RECEIVED THE SUM BEFORE THE APPELLANT HAS ADVANCED THE AFORESAID SUM TO SHRI DEEPAK BHARDWAJ. 17. HAVING TAKEN NOTE TO THE APPELLANTS SUBMISSION AND DOCUMENTS FILED DURING THE APPELLATE PROCEEDINGS IT IS CLEARLY EVIDENT THAT THE APPELLANT HAS EXPLAINED SOURCES OF AFORESAID ADVANCEMENT OF FUND OF RS.2 50 00 000/- WHICH IS EVIDENT FROM THE DOCUMENTS FILED BY THE APPELLANT. EVEN I FIND THAT THE APPELLANTS AR HAS ALSO FILED A SUBMISSION DATED 11.12.2013 WHEREIN HE HAS GIVEN HIS DETAILED SUBMISSION FOR HIS REQUEST FOR DELETION OF THE AFORESAID ADDITION. THE RELEVANT PORTION OF THE APPELLANTS THAT SUBMISSION ARE ALSO EXTRACTED HEREIN BELOW: WE HAVE RECEIVED REMAND REPORT OF THE LD. A.O. DATED 27.10.2012. IN RESPONSE TO HER SUCH REPORT ITA NO.5410/M/2014 A.Y. 2008-09 6 WE HAVE SUBMITTED OUR SUBMISSIONS VIDE OUR LETTER DATED 15.04.2013. IN THE REMAND REPORT DATED 20.11.2013 THE LD. A.O. HAS RELIED ON HERE ORIGINAL REMAND REPORT DATED 27.10.2012. THUS THE APPELLANT BRIEFLY FURNISHED THEIR SUBMISSIONS AS UNDER: I. THE APPELLANT SUBMITS THAT IT IS FIT CASE FOR APPLICABILITY OF PROVISIONS OF RULE 46A AS THE APPELLANT IS A NON-RESIDENT RESIDING IN DUBAI AND THE NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT WAS MISSED AS HE WAS OUT OF INDIA. FURTHER THE TIME GAP BETWEEN ISSUE OF FIRST NOTICE AND PASSING OF ORDER UNDER SECTION 144 OF THE ACT IS LESS THAN TWO MONTHS. THUS PROVISIONS OF RULE 46A ARE SQUARELY APPLICABLE. II. THE APPELLANTS CASE CLEARLY FALLS UNDER SUB CLAUSE (II) AND (III) OF RULE 46A. THE FACT THAT THE APPELLANT DID NOT GET CHANCE TO REVERT BACK TO THE NOTICES ISSUED AS HE IS NON-RESIDENT AND THE HOUSE WAS IN LOCK AND KEY IS SUFFICIENT GROUND FOR ADMISSION OF ADDITIONAL EVIDENCE. ALSO THE FACT THAT THE ITA NO.5410/M/2014 A.Y. 2008-09 7 PROCEEDINGS WERE COMPLETED IN LESS THAN TWO MONTHS IS ALSO SUFFICIENT GROUND. III. THE LD. A.O. PASSED THE ASSESSMENT ORDER U/S.144 OF THE ACT SINCE THE APPELLANT FAILED TO FILE A RETURN OF INCOME AND ALSO FAILED TO FURNISH ANY WRITTEN SUBMISSION IN RESPECT TO ADVANCES GIVEN TO MR. DEEPAK BHARDWAJ. SUCH FAILURE WAS NOT DELIBERATE IN NATURE. IV. OUR CASE IS SQUARELY COVERED BY THE DECISION IN THE CASE OF CIT V. TEXT HUNDRED INDIA (P) LTD. (2011) 239 CTR (DEL) 263 AND DIVYA CHEMICALS V. DCIT 1 SOT 193 (AHMD.) 2. EXEMPTION FROM TAXATION (A) THE APPELLANT HAD PAID ADVANCE TO MR. DEEPAK BHARDWAJ FOR PURCHASE OF PROPERTY KNOW AS SAKET PROPERTY IN DELHI. THE APPELLANT HAS NOT PRODUCED ANY SUCH AGREEMENT FOR PURCHASE OF PROPERTY SINCE THE TRANSACTION IS NOT COMPLETED. THE APPELLANT HAS PRODUCED LETTERS WRITTEN BY HIS SOLICITORS AND ADVOCATE VIDE THEIR LETTER DATED 20.10.2010 AND SUBSEQUENT NOTICE FROM ADDL. COMMISSIONER OF INCOME TAX RANGE ITA NO.5410/M/2014 A.Y. 2008-09 8 27 NEW DELHI DATED 07.12.2010. ALSO THE APPELLANT HAS RECEIVED LETTER FROM JCIT RANGE 27 MUMBAI WHICH DISCUSSES ABOUT THE AMOUNT PAID TO MR. DEEPAK BHARDWAJ FOR PROPOSED SALE OF PROPERTY AT SAKET BY THE SAID MR. DEEPAK BHARDWAJ TO THE APPELLANT. THE COPY OF THE LETTERS ARE FILED ON PAGE 4 5 AND 16 RESPECTIVELY. (B) THE APPELLANTS NON FILING OF RETURN OF INCOME EVEN AFTER RECEIVING NOTICE UNDER SECTION 142(1) OF THE ACT WAS NOT DELIBERATE. THE NOTICE NEVER REACHED HIM SINCE THE HOUSE WAS UNDER LOCK AND KEY AND THERE IS NO ONE OF HIS RESIDENCE. ALSO THE ORDER WAS PASSED IN LESS THAN TWO MONTHS FROM THE DATE OF ISSUE OF NOTICE U/S.142(1). 3. APPLICABILITY OF SECTION 69 (I) SECTION 69 OF THE ACT IS REPRODUCED AS UNDER: WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT ITA NO.5410/M/2014 A.Y. 2008-09 9 RECORDED IN THE BOOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE [ASSESSING ] OFFICER SATISFACTORY THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. (II) THE PROVISIONS OF SECTION 69 OF THE ACT WILL BE APPLICABLE IF ALL THE FOLLOWING CONDITIONS ARE SATISFIED NAMELY (A) INVESTMENT NOT RECORDED IN BOOKS OF ACCOUNTS FOR ANY SOURCE OF INCOME; (B) OFFERS NO EXPLANATION ABOUT NATURE AND SOURCE OF INVESTMENT OR THE EXPLANATION OFFERED IS NOT SATISFACTORY. (III) THE PAYMENT TO MR.DEEPAK BHARDWAJ WAS MADE BY ISSUING TWO CHEQUES OF RS.1.25 CRORES EACH. BANK STATEMENT WOULD CONSTITUTE PART OF BOOKS OF ACCOUNTS. THUS ITA NO.5410/M/2014 A.Y. 2008-09 10 IT CANNOT BE SAID THAT THE INVESTMENTS ARE NOT RECORDED IN BOOKS OF ACCOUNTS. (IV) THE APPELLANT WAS UNABLE TO APPEAR BEFORE THE LD. A.O. FOR THE REASONS STATED SUPRA. HOWEVER THE RELEVANT DOCUMENTS AND CIRCUMSTANTIAL EVIDENCE CLEARLY SHOWS THAT THE AMOUNT WAS PAID TO MR. DEEPAK BHARDWAJ AS ADVANCE FOR PURCHASE OF PROPERTY SITUATED AT SAKET COMMERCIAL COMPLEX NEW DELHI. (V) SINCE THE INVESTMENT IN RECORDED IN BOOKS OF ACCOUNTS AND THE NATURE OF INVESTMENT IS EXPLAINED PROVISIONS OF SECTION 69 OF THE ACT ARE NOT APPLICABLE TO THE APPELLANTS CASE. 18. HAVING TAKEN NOTE TO THE ENTIRE FACTS AND SUBMISSIONS AVAILABLE ON RECORD I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS EXPLAINED THE SOURCE OF RS.2 50 00 000/- WHICH IS DULY REFLECTED IN THE APPELLANTS NRO ACCOUNT. IN VIEW OF THE GIVEN FACT OF THE APPELLANTS CASE AND DOCUMENTS FILED DURING THE APPELLATE PROCEEDINGS I ITA NO.5410/M/2014 A.Y. 2008-09 11 CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE APPELLANT HAS EXPLAINED SOURCE OF FUND WHILE MAKING THE AFORESAID ADVANCE OF FUND OF RS.2 50 00 000/-. ACCORDINGLY THE ADDITION SO MADE BY THE A.O. IS DELETED. 6. ON APPRAISAL OF THE ABOVE SAID FINDING IT IS NOT IN DISPUTE THAT THE CIT(A) HAS CONSIDERED EACH AND EVERY PIECE OF EVIDENCE PRODUCED BEFORE HIM WHEREAS THE ASSESSING OFFICER HAS PASSED THE ORDER U/S.144 OF THE ACT IN ABSENCE OF THE ASSESSEE. IT HAS NOT BEEN HIGHLIGHTED BY THE REPRESENTATIVE OF THE DEPARTMENT UNDER WHICH CIRCUMSTANCES THE ORDER IN QUESTION IS WRONG AGAINST LAW AND FACTS. IT IS ALSO NOT HIGHLIGHTED BY THE DEPARTMENTAL REPRESENTATIVE THAT WHICH EVIDENCES ADDUCED BY THE ASSESSEE HAS WRONGLY BEEN CONSIDERED BY THE CIT(A) AND THE CIT(A) HAS WRONGLY ARRIVED AT THIS CONCLUSION BY NOT APPRECIATING ANY FACTS AND EVIDENCE ON RECORD. ON APPRAISAL OF THE ORDER IN QUESTION WE FOUND NO GROUND TO INTERFERE WITH. THEREFORE THE APPEAL OF THE REVENUE IS HEREBY ORDERED TO BE DISMISSED. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE DISMISSED. ITA NO.5410/M/2014 A.Y. 2008-09 12 ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED :28 TH OCTOBER 2016 MP / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE. / BY ORDER //TRUE COPY// / /(DY./ASSTT. REGISTRAR) / ITAT MUMBAI