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Income Tax Appellate Tribunal, CHANDIGARH
Before: SH. SANJAY GARG
आदेश/ORDER The present appeal has been preferred by the assessee against the order dated 15.11.2019 of the Commissioner of Income Tax (Appeals)-4, Ludhiana pertaining to 1999-2000 assessment year.
The assessee in this appeal has taken following grounds :
That the Ld. CIT(A) has grossly erred both in law and facts in sustaining addition of Rs. 4,99,295/- on account of credit in bank account of the appellant with Punjab National Bank; 2. That while sustaining addition of Rs. 4,99,295/- the Ld. CIT(A) erroneously held that that the Ld. Assessing Officer complied with the directions of Hon'ble IT AT after restoration the case back to his file . 3. That while sustaining the addition of Rs. 4,99,295/- the Ld. CIT(A) did not appreciate that credit of Rs. 4,99,295/- as had had emanated from capital gains ( Long Term) on ITA-112/CHD/2020 A.Y. 1999-2000 Page 2 of 5 account of sale of diamond jewellery stood accepted in the hands of the buyer /the appellant finally for the Assessment Year 1998-99. 4. That the appellant reserves the right to alter or take new grounds of appeal either before or during the course of hearing.
3. The brief facts relating to the issues under consideration are that earlier the assessment in this case was completed on 29.09.2003 by the AO making an addition of Rs. 4,99,295/- into the income of the assessee on account of unexplained credits in the bank account of the assessee. The assessee preferred appeal against the said order and the matter travelled upto the level of the Tribunal. The ITAT vide order dated 29.09.2008 passed in ITA 348/CHD/2005 set aside the issue to the file of the AO. The Tribunal observed that the explanation put forth by the assessee that the credit in the bank account on account of amount received from sale of diamond jewellery was rejected by the AO on the basis of the report of the Investigation Wing in the case of M/s Tambi Exports, Jaipur, the alleged purchaser of the jewellery, wherein, it has been reported that M/s Tambi Exports had merely provided an entry by way of payment of bank draft of the amount in question to the assessee and that M/s Tambi Exports was not into the actual business but was an entry provider. The Tribunal, further considering the submissions/evidences furnished by the assessee and observations of the AO based on the investigation report held that the report of the Investigation Wing on the basis of which the impugned additions were made into the income of the assessee by ITA-112/CHD/2020 A.Y. 1999-2000 Page 3 of 5 the AO was not conclusive to deduce that the impugned transaction was not genuine. The Tribunal further observed that there was no indication as to the manner in which such investigations have been considered in the assessment of M/s Tambi Exports by the concerned AO. The Tribunal further observed that it would be in the fitness of things that such evidence be brought on record by the Revenue and the assessee be confronted on the same. The Tribunal, accordingly, set aside the order of the CIT(A) and restored the issue to the file of the AO for decision afresh on the issue after giving the assessee a reasonable opportunity of being heard. In view of the above directions of the Tribunal, the fresh assessment was made by the AO vide order dated 31.12.2009 reiterating the earlier assessment order and reaffirming the additions.
4. In the appeal before the CIT(A), the assessee brought to notice of the CIT(A) that the directions given by the Tribunal have not been followed by the AO while reaffirming the additions. The ld. CIT(A) duly noticed the above fact and wrote letter to the Joint Director of Income Tax (Investigation) Headquarters, Jaipur vide letter No. 1855 dated 19.03.2018 for necessary enquiry in the case of M/s Tambi Exports which had direct connected with the case of the assessee. Subsequently reminder bearing No. 32 dated 12.04.2018, No. 2161 dated 14.12.2018 for necessary action in this respect was also sent. Letter was also written to the Addl.
ITA-112/CHD/2020 A.Y. 1999-2000 Page 4 of 5 CIT, Range-3 Jaipur to send the necessary records relating to the assessment in the case of M/s Tambi Exports. However, no reply received from the concerned officers of the Income Tax Department at Jaipur. The record was also sought from the AO in this case relating to the Investigation Wing report, however, the AO expressed his inability to submit his comments on the ground that the record being very old was not traceable. The ld. CIT(A) thereafter proceeded to decide the appeal on merits, however upheld the order of the AO only on the ground that the earlier order framed by the AO was based on the report of the Investigation Wing. While doing so, the ld. CIT(A) has made observation that the directions of the ITAT with regard to the assessment in the case of M/s Tambi Exports could not be complied with despite best efforts.
I have heard the rival contentions. Admittedly the directions given by the Tribunal have not been complied with by the AO while framing the impugned assessment in this case. Though the ld. CIT(A) tried to comply with the directions by writing letters to the concerned officers related to the investigation and assessment framed in the case of M/s Tambi Exports, however, no record was furnished by them in this respect to the ld. CIT(A). Even the Assessing Officer also failed to give his comments on the submissions/objections submitted by the assessee before the CIT(A) stating that the record was very old and was not traceable.
ITA-112/CHD/2020 A.Y. 1999-2000 Page 5 of 5 The Tribunal while setting aside the matter to the AO has given a categorical observation that the report of the Investigation Wing in the case of M/s Tambi Exports was not conclusive to uphold the additions made by the AO, rather the factum of assessment in the case of M/s Tambi Exports on the basis of the said investigation report was required to be considered/ascertained and further the evidence brought on record by the revenue is required to be confronted to the assessee and the assessee is required to be given reasonable opportunity of being heard on the same.
Admittedly neither the record/evidences as directed by the Tribunal, have been brought on record nor the assessee could get the opportunity to confront the same. In view of this, the additions made by the lower authorities are not sustainable in the eyes of law and the same are ordered to be deleted.
In the result the appeal of the assessee stands allowed.
Order pronounced on 26.11.2020.