M/S. BHARAT VEDANT, MUMBAI v. THE DCIT CEN CIR-41,

1 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SI NGH(AM) ITSS NO.15/M/2008 BLOCK PERIOD: 01.04.96 TO12.12.02 BHARAT VEDANT THE DCIT CENTRAL CIRCLE-41 MUMBA I 2 SHREE BUILDING R.C.MARG CHEMBUR MUMBAI 400 071. PAN : AAAPV 8194 J APPELLANT RESPONDENT ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SMT. RUNA JHA TRIPATHI O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 16.1.2008 OF CIT(A) FOR THE BLOCK PERIOD 1.4.1996 T O 12.12.2002. THE ONLY DISPUTE RAISED IS REGARDING ADDITION OF RS.30 LACS DEPOSITED IN THE BANK ACCOUNT OF M/S.ASHAPURA GLOBAL GARMENTS MARKETING LTD. (AGG ML). 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH HAD BEEN CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE IN CONN ECTION WITH SEARCH ACTION TAKEN IN CASE OF M/S AGGML IN WHICH THE ASSESSEE WA S MANAGING DIRECTOR. AT THE TIME OF SEARCH A FOLDER IN THE NAME OF SYS/D/T ALLY/54 WHICH WAS A TALLY DATA BASE FOLDER CONTAINING ACCOUNTING DATA RELATIN G TO SEVERAL CONCERNS OF ASHAPURA GROUP INCLUDING M/S. AGGML WAS FOUND. THE AO NOTED FROM THE SAID FOLDER THAT ASSESSEE HAD INTRODUCED CAPITAL OF RS.3 0 LACS IN THE PARTNERSHIP FIRM 2 M/S.AGGML. AO THEREFORE ASKED THE ASSESSEE TO EXPLA IN AS TO WHY THE SUM OF RS.30 LACS SHOULD BE TREATED AS UNEXPLAINED INVESTM ENT. THE ASSESSEE SUBMITTED THAT AS PER THEIR RECORDS THERE WERE NO F UNDS INVESTED IN THE ABOVE CONCERN. THE AO THEREAFTER ASKED THE ASSESSEE TO FU RNISH DETAILS OF TRANSACTIONS APPEARING IN THE BANK ACCOUNT OF M/S AGGML. THE ASS ESSEE HOWEVER STATED THAT THE ACCOUNTING TRANSACTIONS WERE HANDLED BY OT HER PARTNERS AND HE WAS NOT AWARE OF THE SAME. IT WAS ALSO MENTIONED THAT I NCOME OF THE FIRM WAS NOT TAXABLE AND THEREFORE IT HAD NO IMPLICATION FOR THE PARTNER. AO WAS NOT SATISFIED BY THE EXPLANATION AND TREATED THE SUM OF RS.30 LAC S AS UNDISCLOSED INCOME OF THE ASSESSEE. IN APPEAL THE ASSESSEE SUBMITTED THAT NO COPY OF THE COMPUTER BACK UP DATA ON THE BASIS OF WHICH ADDITION WAS MAD E HAD BEEN MADE AVAILABLE TO THE ASSESSEE. CIT(A) THEREFORE REMANDED THE MATT ER TO THE AO WITH DIRECTION TO GRANT THE INSPECTION OF RELEVANT BACK UP DATA. T HE AO REPORTED THAT COPY OF THE COMPUTER DATA BACK UP HAD BEEN GIVEN TO THE ASS ESSEE WHO WAS ASKED TO EXPLAIN THE SOURCE OF RS.30 LACS BUT THE ASSESSEE M ADE NO COMPLIANCE. THE ASSESSEE HOWEVER EXPLAINED TO CIT(A) THAT DESPITE S EVERAL ATTEMPTS THE PARTICULAR FILE COULD NOT BE OPENED AND THEREFORE T HE ASSESSEE WAS NOT IN A POSITION TO GIVE ANY FURTHER EXPLANATION. CIT(A) HO WEVER OBSERVED THAT IT WAS AN UNDISPUTED FACT THAT COMPUTER BACK UP DATA WAS T AKEN FROM THE COMPUTER FOUND IN THE OFFICE PREMISES OF THE ASSESSEE AND TH EREFORE THE ONUS WAS CLEARLY ON THE ASSESSEE TO PROVIDE THE NECESSARY PASSWORD F OR OPENING THE FILE. THEREFORE THE PLEA OF THE ASSESSEE THAT THE COMPUTE R BACK UP DATA COULD NOT BE OPENED COULD NOT BE ACCEPTED. CIT(A) ACCORDINGLY CO NFIRMED THE ADDITION MADE BY THE AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 3. BEFORE US THE LEARNED AR FOR THE ASSESSEE AT THE VERY OUTSET POINTED OUT THAT THE SAME ISSUE HAD CROP UP IN CASE OF SHRI HIT ESH C. VEDANT ONE OF THE 3 DIRECTORS OF M/S.AGGML. FACTS WERE IDENTICAL. THE T RIBUNAL IN THE ORDER DATED 5.1.2009 IN ITSS 16/M/2008 OBSERVED THAT THE MATERI AL USED AGAINST THE ASSESSEE HAD NOT BEEN PROVIDED TO THE ASSESSEE. THE REFORE THE TRIBUNAL SET ASIDE THE ORDER OF CIT(A) AND RESTORED THE MATTER T O THE FILE OF AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION AND AFTER A LLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. IT WAS ACCORDINGLY URGED T HAT FOLLOWING THE SAID DECISION MATTER SHOULD BE RESTORED TO THE AO. THE L EARNED DR ON THE OTHER HAND ARGUED THAT ISSUE HAD BEEN EXAMINED AT LENGTH AT THE ASSESSMENT STAGE AND SUBSEQUENTLY IN THE REMAND PROCEEDINGS AND THER E WAS THUS NO NEED FOR SENDING THE MATTER BACK TO AO. IT WAS ACCORDINGLY U RGED THAT THE MATTER SHOULD BE DECIDED ON MERIT. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ADDITION OF RS .30 LACS ON THE BASIS OF COMPUTER BACK UP DATA FILE FOUND AT THE TIME OF SEA RCH. AS PER THE AO THE DATA FILE MENTIONED INVESTMENT OF RS.30 LACS BY THE ASSE SSEE IN M/S. AGGML IN WHICH THE ASSESSEE WAS A PARTNER. A COPY OF THE COM PUTER DATA FILE WAS ALSO GIVEN TO THE ASSESSEE IN THE REMAND PROCEEDINGS. HO WEVER THE CASE OF THE ASSESSEE IS THAT THE COMPUTER DATA FILE DID NOT OPE N AND THEREFORE ASSESSEE HAD NO OPPORTUNITY TO SEE THE RELEVANT MATERIAL. WE FIND THAT IDENTICAL CASE HAD COME UP BEFORE THE TRIBUNAL IN CASE OF THE OTHER DI RECTOR I.E. SHRI HITESH C.VEDANT. IN THAT CASE ALSO ADDITION HAD BEEN MADE ON THE BASIS OF SAME COMPUTER DATA FILE AND IN THAT CASE ALSO COPY OF TH E FILE HAD BEEN GIVEN TO THE ASSESSEE IN THE REMAND PROCEEDINGS. THE TRIBUNAL HO WEVER DID NOT ACCEPT THE PLEA OF THE REVENUE THAT THE ASSESSEE HAD BEEN GIVE N OPPORTUNITY TO SEE THE MATERIAL. THE TRIBUNAL HELD THAT THE MATERIAL USED AGAINST THE ASSESSEE HAD NOT BEEN PROVIDED TO HIM AND THEREFORE THE ISSUE WAS RE STORED TO THE FILE OF AO FOR 4 FRESH ORDER AFTER NECESSARY EXAMINATION AND OPPORTU NITY TO THE ASSESSEE. FACTS IN CASE OF THE ASSESSEE ARE IDENTICAL AND THEREFORE WE HAVE TO FOLLOW THE DECISION OF THE COORDINATE BENCH. RESPECTFULLY FOLL OWING THE SAME WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO THE F ILE OF AO FOR PASSING A FRESH ORDER AFTER PROVIDING NECESSARY OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 6. THE DECISION WAS PRONOUNCED IN THE OPEN COURT 23 .02.2011. SD/- SD/- ( D.K. AGARWAL ) (RAJEN DRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 23.02.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) MUMBAI CONCERNED 4. THE CIT MUMBAI CITY CONCERNED 5. THE DR I BENCH ITAT MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI ALK