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PER N.K. SAINI, VICE PRESIDENT This is an appeal by the Assessee against the order dt. 25/03/2019 of Ld. CIT(A)-3, Ludhiana.
Following grounds have been raised in this appeal:
That the Learned Commissionner of Income Tax (Appeals)-3, Ludhiana has erred in confirming the addition of Rs. 1,93,100/- on account of advance made to Sh. Ashwani Kumar Prop. M/s Emmson Traders without any basis and without considering the facts of the case. Therefore, addition of Rs. 1,93,100/- made by the Learned Assessing Officer and Confirmed by the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana is Illegal, Unwarranted, Uncalled for and needs to be deleted.
2. That the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana has erred in upheld the order passed by the Learned Assessing Officer as The Learned Assessing Officer has mentioned in the assessment order that no evidence was furnished by the appellant in response to source of Investment i.e. advance made to Sh. Ashwani Kumar Prop. M/s Emmson Traders, whereas evidences were duly furnished by the appellant during the course of assessment proceedings Therefore, assessment framed by the Learned Assessing Officer and Assessment Order upheld by the Learned Commissioner of Income Tax (Appeals)-3, Ludhiana is illegal and bad in the Eyes of Law.
That the Applicant craves to leave or to amend the grounds of Appeal before or at the time of hearing.
3. From the aforesaid grounds it is noticed that only grievance of the assessee relates to the confirmation of addition of Rs. 1,93,100/- made by the A.O. on account of advance to one Shri Ashwani Kumar Prop. M/s Emmson Traders.
The facts relating to this issue in brief are that the Ld. CIT(A)-2, Ludhiana vide order dt. 30/08/2017 has given direction under section 150(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) to the A.O. to examine about the source of debit entries in the bank accounts of the assessee through which the advances of Rs 93,100/- and House expenses of Rs. 1,00,000/- has been given to Shri Ashwani Kumar during the Financial year 2006-07 relevant to Assessment Year under consideration. Thereafter the case of the assessee was reopened u/s 147 of the Act. The A.O. passed the assessment order dt. 27/12/2018 exparte under section 147 r.w.s 144 of the Act and made the impugned addition by observing that by keeping in view the non cooperative attitude of the assessee the amount of Rs. 1,93,100/- was considered as the income of the assessee.
Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under:
That the assessment for the assessment year 2007-08 has been framed without any original records. That the previous counsel i.e. Sh. S.K. Bansal appeared before the Learned Assessing Officer during the course of assessment proceedings and submit the details from during the course of assessment proceedings. That the Learned Assessing Officer has not issued any notice u/s 143(2) of the Income Tax act, 1961 to the assessee during the course of assessment proceedings before the finalization of the assessment. That no proper opportunity was given to the assessee by the Learned Assessing Officer. Therefore, Assessment Order passed u/s 147 r.w.s. 144 of the Income Tax Act, 1961 without issuing any notice u/s 143(2) is illegal and bad in the eyes of law and needs to be quashed That the return of Income declaring Income at Rs. 1,20,400/- was filed by the assessee and the Learned Assessing Officer has made the addition of Rs. 1,93,100/- without any basis and without considering the facts of the case. That assessee has advance amount to Sh. Ashwani Kumar Proprietor M/s Emmson Traders during the Financial Year 2006-07. That the source of investment made by the assessee were duly filed during the course of assessment proceedings. That assessee is doing the business of Resale of Cosmetic Goods, Household Goods and Wearing Apparels from last so many years. That the assessee is assessed to Income Tax separately and filed her Income tax returns from last so many years. That the details of Income of some ITR's filed by the assessee are under:
Assessment Year Declared Income (In ITR) 2002-03 84,700/- 2003-04 85,200/- 2004-05 86,800/- 2005-06 82,200/- 2006-07 1,14,600/- Total 4,53,500/- That the total Income shown in above stated assessment years is Rs. 4,53,500/-. That the assessee is wife of Sh. Surinder Kumar (Brother of Sh. Ashwani Kumar Proprietor M/s Emmson Traders)and household expenses were met by her husband which was duly accounted for in the hands of assessee's husband. That the above stated facts are clearly evening that the assessee made the advance to Sh. Ashwani Kumar Proprietor M/s Emmson Traders out of her past savings.
That the Leaned Assessing Officer did not consider the submissions and facts of the case and made the addition of Rs. 1,93,100/- on his assumptions and whim without any basis and without any material facts of the case. That the addition made by the Learned Assessing Officer, is illegal and bad in the eyes of Law and needs to be deleted.
So it is a humble requested before your honor to in kindly allow the appeal to the assessee and delete the addition made by the Learned Assessing Officer for the A. Y. 2007-08 so that natural justice may allowed to the assessee.
Kindly acknowledge the request and oblige.
Ld. CIT(A) however did not find merit in the submissions of the assessee and confirmed the addition by observing in para 4.3 of the impugned order as under:
4.3 During the appellate proceedings the assessee has filed written submission challenging the disallowance on account of opportunity and the assessee has stated that the counsel of the assessee Shri SK Bansal appeared before the assessing officer on 13/12/2018 and submitted the return of income for the assessment year 2007-08. The assessee has also filed copy of undated letter signed by the previous counsel of the assessee stating that the assessee's return of income for assessment year 2007-08, is enclosed herewith. By going through the undated letter which has not been stamped or acknowledged by any authority wherein the assessee has claimed that the assessee has explained the source of the amount of Rs. 93,100/-advance by assessee to Shri Ashwini Kumar, Prop. Emson Traders. However, no where the assessee has filed explanation and source of advance given by assessee. The reply filed by the assessee is also generalized, and without any documentary evidence.
Moreover the assessee has not given any submission at the time of assessment proceedings whereas the assessee was given due and ample opportunities by the assessing officer, therefore it is construed that the assessee has nothing more to explain and has failed completely to explain the source of Rs. 93,100/-. The assessee has also not even tried to give written explanation with regard to source of the deposit given by the assessee. In my considered view the assessee has completely failed to discharge his onus to explain source of advance amounting to Rs. 93,100 with explanation and necessary documentary evidence in support of his contention. Accordingly the disallowance made by assessing officer on account of unexplained advance given by assessee to Shri Ashwini Kumar amounting to Rs. 93,100/- and, by treating them as income of the assessee is upheld. With this these grounds of appeal are appeal accordingly dismissed.
7. Now the assessee is in appeal.
8. Ld. Counsel for the assessee submitted that the A.O. made the impugned addition without providing due and reasonable opportunity of being heard to the assessee and the Ld. CIT(A) also sustained the addition made by the A.O. without considering the submissions of the assessee. He requested to remand this case back to the file of the A.O. so that the requisite evidence and explanation may be furnished before him.
In his rival submissions the Ld. DR supported the orders of the authorities below.
I have considered the submissions of both the parties and perused the material available on the record. In the present case it appears that the A.O. had not provided due and reasonable opportunity of being heard to the assessee, the assessment order dt. 27/12/2018 was passed by him exparte. The A.O. simply stated that the notice dt. 13/12/2018 was issued to the assessee for hearing on 18/12/2018 which was duly served through affixture, however nowhere it was mentioned that affixture was in the presence of independent witnesses i.e. the service was proper. It is also noticed that the Ld. CIT(A) had not commented upon the submissions of the assessee that the source of investments made by the assessee were duly filed during the course of assessment proceedings and the assessee was doing the business of resale of Cosmetic Goods, Household Goods and wearing Apparels from last so many years. I therefore by considering the totality of the facts, deem it appropriate to set aside this case back to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
In the result, appeal of the Assessee is allowed for statistical purposes.
(Order pronounced in the open Court on 07/02/2020 )