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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE JM:
The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-38, Mumbai passed u/s 143(3) and 250 of the Act. The assessee has raised the following grounds of appeal:
1. On the facts and circumstances of the case as well as in law, the Ld. CIT(A) has erred in making an addition of Rs. 7 lakhas as unexplained cash credit u/s 68 of the Act in respect of unsecured loans taken to the assessee total income and the reasons
Mr. Lalitkumar Thanmal Jain, Mumbai. - 2 - assigned for doing so are wrong and contrary to the facts of the case and provisions of the law. 2.The appellant craves leave to add, amend, alter or delete the said ground of appeal.
1.1 At the time of hearing the assessee has raised the additional grounds of appeal, read as under:
1. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in enhancing the addition from Rs. 11,00,000/- to Rs.35,00,000/- being the whole amount of sale consideration and disregarding the amount of purchase price The addition of & 11,00,000/- was made by the learned Assessing Officer under the head short term capital gain instead of long term capital gain. The said ground was not pressed by the Assessee in the appeal filed before the Hon'ble CIT(A). However, on the mere fact that the appellant had not pressed the addition of 7 11,00,000/- in the appeal, the Hon'ble CIT(A) has surmised that the appellant does not have any proof of purchase or sale agreement. The Hon'ble CIT(A) has enhanced the addition fro Rs 11,00,000/- to Rs. 35,00,000/- without giving an opportunity of being heard to the appellant 1.2 The assessee has made submissions on the additional grounds of appeal and the Ld. DR has no serious objections. Accordingly, we admit the additional ground of appeal.
Mr. Lalitkumar Thanmal Jain, Mumbai. - 3 -
The brief facts of the case that the assessee is individual and proprietor of M/s Arihant Jewellers .The assesee is engaged in the business of manufacturing and trading of gold jewellery and silver ornaments. The assessee has filed the return of income for the A.Y 2012-13 on 30.09.2012 disclosing a total income of Rs. 8,61,760/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act was issued. In compliance to the notice, the Ld.AR of the assessee appeared from time to time and furnished the details and the case discussed. The A.O on perusal of the financial statements, found that the assessee has income from business, capital gains and income from other sources and has disclosed the loss from the multi-commodity exchanges transactions. The A.O has called for the various information/details and in respect of purchases made by the assessee.(i) the A.O found difference in the purchase transactions and made an addition of Rs.9,89,020/- (ii)the A.O has made an addition of unsecured loans u/s 68 of the Act of Rs.24,58,000/- as the assessee could not substantiate the ingredients u/s 68 of the Act.
Mr. Lalitkumar Thanmal Jain, Mumbai. - 4 - (iii)Further, the AO has disallowed the interest payment u/sec40(a)(ia) of the Act for non deduction of TDS of Rs11,72,560/-(iv) the A.O found that the assessee has not submitted proper information of flat and made the addition of Rs. 11 lakhs on account of short term capital gains. (v) Since the assessee has not filed satisfactory explanations in respect of loans and advances and the assessee must have incurred certain interest expenditure on such loans and therefore the A.O. has estimated interest @12% on loans, which worked out to Rs.4,50,180/- and assessed the total income of Rs.66,55,760/- and passed the order u/s 143(3) of the Act on 30.03.2015.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the A.O and called for the remand report. In respect of addition of 24,68,500/-, the CIT(A) was satisfied with the action of the A.O and confirmed the addition. Whereas, on the disputed issue of the Short term capital gains of Rs. 11 lakhs, the CIT(A) has enhanced the addition by adding the whole sale consideration of flat Rs. 35 lakhs and granted partial
Mr. Lalitkumar Thanmal Jain, Mumbai. - 5 - relief in other grounds of appeal and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal
At the time of hearing the Ld. AR made submissions on the additional grounds of appeal
that the CIT(A) has erred in enhancing the addition of short term capital gains without issuing the notice of the enhancement to the assessee and no opportunity provided on this aspect in the hearing proceedings. Therefore the action of the CIT(A) is bad in law and prayed for allowing the assessee appeal. Contra, the Ld. DR supported the order of the CIT(A).
5. We heard the rival submissions and perused the material on record. The Ld.AR contentions are that the CIT(A) has erred in enhancing the addition from Rs.11Lakhs to Rs35Lakhs being the sale consideration on sale of flat and was treated as short term capital gains instead of Long Term capital gains. The CIT(A) has also erred in enhancing the addition without opportunity of being heard and the assessee has a good case on merits and can substantiate with material evidence and information and demonstrated the Mr. Lalitkumar Thanmal Jain, Mumbai. - 6 - additional evidences filed in the hearing proceedings. The Ld. AR prayed that these evidences play a vital role in the decision making of the case and prayed for an opportunity to substantiate before the lower authorities. We considering the facts, circumstances, provisions of law and to meet the ends of justice shall provide one more opportunity to the assessee to substantiate with the evidences. Accordingly, we restore the entire disputed issues to the file of the CIT(A) to adjudicate a fresh on merits. Further, the assessee should be provided the adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal and allow the grounds of appeal of the assessee for statistical purpose.
In the result, the appeal filed by the assessee treated as allowed for statistical purposes.