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Income Tax Appellate Tribunal, BANGALORE BENCH ‘B’, BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI A. K. GARODIA
and are being disposed of by way of this common order for the sake of convenience.
The grounds raised by the assessee in ITA No.1199(B)/2013 for AY: 2005-06 are as under:
“1. The ld. CIT(A) erred in holding that issue of warrant in joint names will not vitiate for initiation of proceedings u/s 153A of the Act, in view of the Sec.292CC of the IT Act, which has been inserted by Finance Act 2012 w.e.f. 01-04-1976.
2. The ld. CIT(A) ought to have held the amendment is applicable to the proceedings which are pending for issue of notice u/s 153A of the Act, and not to a case where proceedings u/s 153A re already initiated.
3. The ld.CIT(A) erred in holding that non- issue of an opportunity of being heard by the Additional CIT before approving an order of assessment u/s 153A r.w.s.143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s.143(3) of the Act.
4. The action of the ld. CIT is contrary to the procedure contemplated by the CBDT.
5. The ld.CIT(A) erred in holding an addition of Rs.2,63, 230/- is sustainable out of the addition of Rs.3,00,000/- made by the ld.AO.
6. The ld. authorities below did not properly appreciate the contention of the appellant that she will offer a sum of Rs.5,00,000/- under the head capital gains and erroneously been interpreted as offer of additional income of Rs.5,00,000/- 7. The levy of interest u/s 24B of the Act is erroneous.
8. The authorities below have erred in not considering the tax rebate of Rs.4,562/- u/s 88 and tax rebate of Rs.5,000/- u/s 88C of the Act. The appellant prays for leave of the Hon’ble Tribunal to raise such other ground or grounds at the time of hearing”.
Similarly, the grounds raised by the assessee in ITA No.1200(B)/2013 for AY: 2007-08 are as under:-
“1. The ld. CIT(A) erred in holding that issue of warrant in joint names will not vitiate for initiation of proceedings u/s 153A of the Act, in view of the Sec.292CC of the IT Act, which has been inserted by Finance Act 2012 w.e.f. 01-04-1976.
2. The ld. CIT(A) ought to have held the amendment is applicable to the proceedings which are pending for issue of notice u/s 153A of the Act, and not to a case where proceedings u/s 153A are already initiated.
3. The ld.CIT(A) erred in holding that non- issue of an opportunity of being heard by the Additional CIT before approving an order of assessment u/s 153A r.w.s.143(3) of the Act will not vitiate assessment proceedings completed u/s 153A r.w.s.143(3) of the Act.
4. The action of the ld. CIT is contrary to the procedure contemplated by the CBDT.
5. The ld.CIT(A) ought to have held the notice issued u/s 153A of the Act, is illegal since return is called without granting statute recognized period for compliance and there is no reasons either recorded or communicated to know how the ld. assessing authority has exercised his discretion for compliance to the notice u/s 153a of the Act.
6. The appellant respectfully submits a period of clear 30 days to 45 days was considered reasonable for compliances with regard to filing of return in response to notices.
7. The ld. CIT(A) erred in affirming the addition of Rs.5,52,192/- as part of the investment in the flat by way of payment of VAT, Service Tax and other Misc. expenditure and erred in rejecting the appellants contention that there is no material on record to prove the expenditure has been incurred by the appellant.
8. The ld. CIT(A) erred in holding the amount paid by an account payee cheque by Hiren Patel to M/s N.D.Developers is not genuine.
The ld CIT(A) ought to have held the notice issued u/s 143(2) of the Act, relates to the original return filed u/s 139 of the Act and not t the proceedings initiated u/s 153A of the Act, since the ld. assessing authority has considered the income returned in the original return.
The ld. CIT(A) erred in holding that a sum of Rs.2,00,000/- received from Miss Sabhita, Miss Saritha and Sri Deepak are not supported by the sources as such requires to be treated as unexplained investment. The appellant submits all the three persons are assessed to tax and have confirmed the advance.
The ld. CIT(A) erred in rejecting the loans and her own source for purchase of st availed by the appellant on 23-10- 2006 are not properly examined. 12.The ld.CIT(A) erred in rejecting the loans availed by the appellant on 13.11.2006 are not properly explained.
The ld. CIT(A) erred in rejecting the loans availed and her source of income for payment of stamp duty through DD on 17.01.2006 amounting to Rs.1,24,09/- has un-explained investment.
The ld. CIT(A) erred in rejecting the explanation of Miss Sushma G Pandith for making investment in the flat. Misss Sushma G Pandith is assessed to tax and has source to make the payment.
The ld. CIT(A) failed to observe that the Miss. Sushma G Pandith is a joint owner of the property and if any investment remains unexplained the same cannot be treated as unexplained investment of the appellant.
The ld, CIT(A) erred in treating the registration charges and misc. expenses as unexplained rejecting the explanation that the same is out of income of the appellant. 17. The levy of interest u/s 234B of the Act is erroneous.
The appellant prays for leave of the Hon’ble Tribunal to raise such other ground or grounds at the time of hearing”.
It was submitted by the ld.AR of the assessee that ground no.1 to 4 in AY: 2005-06 and ground no.1 to 9 in AY: 2007-08 are not pressed and accordingly these grounds are rejected as not pressed.
Regarding ground no.5 & 6 in the assessment year 2005-06, he submitted that on page-33 of the paper book is the statement of assets and liabilities as on 31-03-2007 and in the same, there are various creditors shown on the liability side of this statement but these creditors were not examined. He also submitted that these creditors have filed their return of income prior to search and these transactions regarding providing credit to the assessee was disclosed by them in the said return of income, but these creditors were not examined by the authorities below. Therefore, the matter may be restored back to the file of the AO for fresh decision after examining these creditors.
Regarding ground nos.10 to 16 in assessment year 2007-08 also, the submissions were same. As against this, the ld. DR of the revenue supported the orders of the authorities below.
We have considered the rival submissions. We find that in the impugned order, it is noted by the ld. CIT(A) that certain payments have been made by cheque through accounts of the assessee’s daughter Ms.
Sushma G.Pandith and some have been paid through M/s Pandit Developers and number of payments were made either by cash or through one Shri Hiren Kumar Patel or some other person and even cash receipts from Ms. Sushma G Pandith stated to have been received on various dates. Thereafter, he has stated on page-8 of his order that he had examined the claim made by the assessee and in respect of each payment, his observations are listed in the table enclosed as Annexure- A to the impugned order, as per col.8 & 9 of the Annexure. When we examine col.8 & 9 the said Annexure to the impugned order, we find that he has simply stated in col.9 of the Annexure that the claim is rejected without giving any reason. In our considered opinion, before deciding about the acceptability of the assessee’s explanation, the creditors should have been examined and since this was not done, we feel it proper that the matter should go back to the file of the AO for a fresh decision and accordingly, we set aside the order of theld.CIT(A) in both years and restore the entire matter back to the file to the AO in both years with a direction that he should decide the issue afresh after examining the said creditors as per the statement of affairs of the assessee in support of assessee’s explanation about the source of this fund in dispute. The AO should pass necessary order pas law in the light of the above discussion after providing reasonable opportunity of being heard to the assessee.
In the result, both the appeals of the assessee are partly allowed for statistical purposes.
Order pronounced in the open court on the date mentioned on the caption page.