BHAGYAVANTI MAHAVIR JAIN,MUMBAI vs. ITO -WD 1(5), MUMBAI
Facts
The Assessing Officer made additions totaling Rs. 41,08,250/- to the assessee's income for AY 2014-15 on account of share transactions in M/s. Essar India Ltd. and M/s. Surbhi Chemicals India Ltd., citing reasons such as off-market purchase, cash payments, and insufficient documentation. The Ld. Commissioner of Income Tax (Appeals) affirmed these additions. The assessee contended that the Ld. Commissioner failed to consider relevant documents, leading to a breach of natural justice and denial of opportunity of being heard.
Held
The Tribunal observed that the Ld. Commissioner had neither considered nor mentioned the documents filed by the assessee, which were essential for adjudicating the issues and ensuring substantial justice. Therefore, the Tribunal set aside the impugned order and remanded the case back to the Ld. Commissioner for a fresh decision after considering all documents and providing a sufficient opportunity of being heard.
Key Issues
Additions made for share transactions on various grounds; non-consideration of crucial documents by the first appellate authority, leading to a denial of natural justice and fair hearing.
Sections Cited
Section 250 of the Income Tax Act, 1961, Section 143(3) of the Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SMT RENU JAUHRI
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order
dated 05.04.2022, impugned herein, passed by the Ld. Commissioner of
Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of
the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2014-15.
2 ITA No.1368/M/2022 Ms. Bhagyavanti Mahavir Jain
In this case, the Assessing Officer (AO) vide order dated 29.12.2016
u/s 143(3) of the Act has made the additions of Rs.29,62,250/- &
Rs.11,46,000/- (in total Rs.41,08,250/-) respectively on account of share
transactions qua M/s. Essar India Ltd. and M/s. Surbhi Chemicals India
Ltd. mainly on the following reasons:
(i) the basis of the investigation carried out by Directorate of Investigation, Kolkata and (ii) purchase of shares was purchased from off market and (iii) payment was made in cash and (iv) there is no bank entry to corroborate the payment and (v) the investment qua shares of M/s. Essar India Ltd. is not reflecting in the balance sheet as on 31.03.2012. (vi) the shares were dematerialized after a gap of more than 11 months. (vii) the Assessee could not offer any explanation as to how she came in contact with a Chennai based broker and (viii) the Assessee was not aware about the companies in which she has made the transactions and (ix) the Assessee has also failed to file the relevant documents in support of her claim.
The Assessee, being aggrieved, challenged the said additions before
the Ld. Commissioner who by impugned order affirmed the aforesaid
additions more or less on the same reasoning as observed by the AO.
The Assessee, being aggrieved, is in appeal before us. The Ld.
Counsel/Advocate Ms. Dinkle Haria on behalf of the Assessee though
argued on the merits of the case, however, at last in order to cut short
3 ITA No.1368/M/2022 Ms. Bhagyavanti Mahavir Jain
the litigation respectfully submitted that though the Assessee has
submitted various relevant documents as mentioned at Sl. No.4 in the
paper book as filed before the Bench, however, the Ld. Commissioner did
not consider the same, which resulted into non-appreciation of the
documents relevant for adjudication of the issue, breach of the principle
of natural justice and denial of opportunity of being heard.
On the contrary, the Ld. D.R. refuted the claim of the Assessee on
the merits of the case, but not on this particular fact qua non-
consideration of documents, as demonstrated by Ld. Counsel.
Having heard the parties and perused the material available on
record, we observe that admittedly no such document as filed by the
Assessee before the Ld. Commissioner, has either been considered or
mentioned in the impugned by the Ld. Commissioner. Hence, without
going into the merits of the case, as the documents in our considered
view are essential for adjudication of the issues involved and therefore for
the just decision of the case and substantial justice, we are inclined to set
aside the impugned order and remand the instant case to the file of the
Ld. Commissioner for decision afresh, suffice to say by considering the
documents filed by the Assessee before the Ld. Commissioner as also
before us and by giving sufficient opportunity of being heard to the
Assessee. Thus the case is remanded to the file of Ld. Commissioner
accordingly.
4 ITA No.1368/M/2022 Ms. Bhagyavanti Mahavir Jain
The Assessee is also directed to cooperate with the appellate
proceedings and to file the relevant documents before the Ld.
Commissioner. We clarify, in case of default, the Assessee shall not be
entitled for any leniency.
In the result, the appeal filed by the Assessee stands allowed for
statistical purposes.
Order pronounced in the open court on 30.10.2024.
Sd/- Sd/- (RENU JAUHRI) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER
* Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
