PRAKASH K SHAH, MUMBAI v. ITO RG 17(2)(1), MUMBAI

ITA 7590/MUM/2014 | 2009-2010
Pronouncement Date: 06-10-2016 | Result: Allowed

Appeal Details

RSA Number 759019914 RSA 2014
Assessee PAN AAKPS5648G
Bench Mumbai
Appeal Number ITA 7590/MUM/2014
Duration Of Justice 1 year(s) 9 month(s) 18 day(s)
Appellant PRAKASH K SHAH, MUMBAI
Respondent ITO RG 17(2)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 06-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 06-10-2016
Date Of Final Hearing 06-10-2016
Next Hearing Date 06-10-2016
Assessment Year 2009-2010
Appeal Filed On 19-12-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER AND SHRI RAJESH KUMAR ACCOUNTANT MEMBER ITA NO. : 7 59 0 /MUM/20 1 4 (ASSESSMENT YEAR: 200 9 - 1 0 ) PRAKASH K SHAH 26 2 ND FLOOR 234 OMNIWAS R A KIDWAI RAOD WADAA MUMBAI - 400 031 PAN: AA K P S 5648 G VS IT O 1 7 ( 2 ) (1) PIRAMAL CHAMBERS MUMBAI - 400 0 13 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SANJAY R PARIKH RESPONDENT BY SHRI VAIBHAV JAIN /DATE OF HEARING : 06 - 10 - 201 6 / DATE OF PRONOUNCEMENT : 06 - 10 - 2016 ORDER PER AMIT SHUKLA J.M. : THE AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER PASSED BY L D. CIT(A PPEALS ) - 29 2 PRAKASH K SHAH ITA NO. : 7 59 0 /MUM/201 4 MUMBAI IN RELATION TO THE PENALTY PROCEEDING UNDER SECTION 271(1)(C) OF THE ACT. 2. THE ASSESSEE IS AGGRIEVE D BY THE LEVY OF PENALTY OF RS.11 47 176/ - U/S 271(1)(C) ON ACCOUNT OF ADDITION MADE AS UNEXPLAINED CASH CREDIT OF RS.34 LAKHS AND DISALLOWANCE OF INTEREST EXPENDIT URE THEREUPON OF RS.7 40 587/ - . 3. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT IN THE QUANTUM PROCEEDI NGS THE TRIBUNAL HAS SET ASIDE THE IMPUGNED ADDITIONS TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AND ACC ORDINGLY THE PENALTY ARISING OUT OF THE PRESENT ASSESSMENT ORDER CANNOT BE SUSTAINED. 4. LD. DR ADMITTED THAT THESE ISSUES HAVE BEEN SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER AND ACCORDINGLY HE SUBMITTED THAT THE PENALTY SHOULD A L SO BE SET ASIDE. 5. AFTER CONSIDERING THE AFORESAID SUBMISSION S AND ON PERUSAL OF THE MATERIAL PLACED ON RECORD WE FIND THAT THE SUBJECT MATTER OF PENALTY IS ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT UNEXPLAINED CASH CREDIT OF RS.3 4 LAKHS AND DISALLOWANCE OF INTEREST EXPENSES OF RS.7 4 0 587/ THEREUPON . IN THE QUANTUM PROCEEDINGS THE TRIBUNAL HAS SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER OBSERVING AND HOLDING AS UNDER: - 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE ASSESSEE HAD TAKEN A LOAN OF RS.34 LAKHS FROM MGS THAT THE ASSESSEE HAD FILED CONFIRMATION BEFORE THE AO THAT AO HAD RECORDED THE 3 PRAKASH K SHAH ITA NO. : 7 59 0 /MUM/201 4 STATEMENT OF THE LENDER AND MADE AN ADDITION OF THE PRINCIPLE AMOUNT AND INTEREST AMOUNT TO THE INCOME OF THE ASSESSEE THAT HE DID NOT SUPPLY THE COPY OF THE STATEMENT OF MGS TO THE ASSESSEE BEFORE MAKING ADDITION THAT ONLY AFTER THE DIRECTIONS OF THE FAA THE AO COMPLIED WITH THE PRINCIPLES OF NATURAL JUSTICE THAT THE FAA HAD MENTIONED THAT OPPORTUNITY OF PROPER CROSS EXAMINATION WAS NOT PROVIDED TO THE ASSESSEE. WE HAVE GONE THROUGH THE STATEMENTS RECORDED BY THE AO OF MGS AND THE ASSESSEE IN PURSUANCE OF THE DIRECTIONS OF THE FAA(PAGE NO.55 - 56 OF PA PER BOOK).WE FIND THAT IT IS THE AO WHO IS ASKING THE QUESTIONS TO BOTH OF THEM. IN OUR OPINION NO MEANINGFUL PURPOSE WAS SERVED BY IT. IT APPEARS THAT IN THE NAME OF ALLEGED CROSS EXAMINATION THE AO HAD COMPLETED A FORMALITY - THERE WAS NO EFFECTIVE CROSS E XAMINATION. THE ASSESSEE SHOULD HAVE BEEN ALLOWED TO QUESTIONS MGS ABOUT THE DISPUTED TRANSACTION AND AFTER THAT IF THE AO HAD SOME DOUBT HE SHOULD HAVE CLARIFIED IT. INSTEAD OF FOLLOWING THE VALID COURSE OF CROSS EXAMINATION THE AO SHORT - CIRCUITED IT FOR NAMESAKE. AS A REPRESENTATIVE OF THE SOVEREIGN THE AO IS AUTHORIZED TO COLLECT DUE TAXES ONLY AND HE HAD TO FOLLOW A PROCEDURE AS ENVISAGED BY THE ACT TO DETERMINE TAXABILITY OF AN ASSESSEE. AS THE AO HAD FAILED TO AFFORD A FAIR CHANCE TO THE ASSESSE E FOR CROSS EXAMINING MGS SO IN OUR OPINION IN THE I R INTEREST OF JUSTICE MATTER DESERVES TO BE REMITTED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THE AO IS DIRECTED TO AFFORD AN EFFECTIVE AND MEANINGFUL OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE OF MGS AS MENTIONED BY US IN THE EARLIER PART OF OUR ORDER. REVERSING THE ORDER OF THE FAA WE DECIDE BOTH THE GROUNDS IN FAVOUR OF THE ASSESSEE IN PART. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED . ONCE THE VERY ADDITION HAS BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING IT AFRES H THEN PENALTY PROCEEDINGS ARISING OUT OF THE SAID QUANTUM ORDER CANNOT BE SUSTAINED AND HENCE THE SAME IS DIRECTED TO BE DELETED . I N THE SET ASIDE PROCEEDINGS THE A SSESSING O FFICER IF REQUIRED UNDER LAW AND FACTS MAY INITIATE THE PENALTY PROCEEDINGS SUBJECT TO FULFILLMENT OF THE CONDITIONS . ACCORDINGLY THE GROUNDS RAISED IN THE IMPUGNED APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. 6. IN THE RESULT APPEAL OF THE ASSESSEE STA NDS ALLOWED. 4 PRAKASH K SHAH ITA NO. : 7 59 0 /MUM/201 4 ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH OC T O BER 2016 . SD/ - SD/ - ( ) ( ) ( RAJESH KUMAR ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATE: 6 TH OCTOBER 2016 . / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3 ) THE CI T ( APPEAL ) 29 MUMBAI. 4 ) THE CIT - 1 7 MUMBAI 5 ) / THE D.R. C BENCH MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / DY. / ASSTT. REGISTRAR I.T.A.T. MUMBAI * . . *CHAVAN SR.PS