SHRI NARENDRA RATANLAL RATHI,NAGPUR vs. ITO, WARD-5(2), NAGPUR

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ITA 96/NAG/2013Status: DisposedITAT Nagpur12 January 2017AY 2005-064 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was now in a position to produce creditors for verification and had submitted additional factual details. The Tribunal also noted that the AO had erred in refusing to issue notices under Section 131 and rejecting contentions.

What were the facts?

The assessee, a salaried employee, appealed against additions made by the Assessing Officer (AO) and confirmed by the CIT(Appeals) concerning unexplained investments and creditors. The AO had made additions under Section 69 and Section 68 of the Income Tax Act.

What were the issues?

Whether the additions made by the AO on account of unexplained investments and creditors were justified, and if the assessee was denied a proper opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 69,Section 68,Section 131,Section 234B,Section 271(1)(c),Section 271(1)(b)

AI-generated summary — verify with the full judgment below

1 ITA No. 96/Nag/2013.

IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.)

I.T.A. No. 96/Nag/2013 Assessment Year : 2005-06. Shri Narendra Ratanlal Rathi, The Income-tax Officer, Nagpur. Vs. Ward-5(2), Nagpur. PAN ABPPR 3909K. Appellant. Respondent. Appellant by : Shri Sanjay Thakar. Respondent by : Shri A.R. Ninawe. Date of Hearing : 06-12-2016 Date of Pronouncement : 12th January, 2017.

O R D E R.

This appeal by the assessee is directed against order of Learned CIT(Appeals) dated 11/12/2012 and pertains to assessment year 2005- 06. The grounds for appeal read as under :

1.

The order passed is illegal, invalid and bad in law. 2. The income determined at Rs.12,85,608/- is unjustified, unwarranted and excessive. 3. The addition of Rs.2.50 lacs as unexplained investment and brought to tax u/s 69 of the Act was illegal, invalid and bad in law. 4. The addition of Rs.6.30 lacs [ 3.80 lacs + 2.50 lacs] as unexplained investment on account of creditors and brought to tax u/s 69 of the Act was illegal, invalid and bad in law. 5. The addition of Rs.2.11 lacs as unexplained investment on account of credits in bank accounts and brought to tx u/s 69 of the Act was illegal, invalid and bad in law.

2 ITA No. 96/Nag/2013.

6.

The addition on account of sale proceeds sof old shares amounting to Rs.46.748 without doing exercise to check d-mat account and just calling for old purchase bills, were totally unjustified and illegal. 7. The addition on account of loan addition of Rs.1,25,000/- as unexplained cash credit and added u/s 68 were totally unjustified and illegal. 8. The learned assessing officer erred in passing the assessment order of a simple salaried employee of M.S.E.B. (generation). 9. The learned assessing officer erred in charging interest u/s 234B and initiating the penalties u/s 271(1)© and 271(1)(b).

2.

In this case the assessee’s source of income is from salary. During the course of assessment Assessing Officer examined the assessee’s source of investment in house and the creditors shown. The Assessing Officer was not convinced with assessee's reply. He made the following additions :

“ i) Difference in investment in house shown and cash flow statement. Rs.2,50,000 ii) Unexplained investment on a/o of creditors treated as deemed income u/s 69. Rs.3,80,000 iii) Unexplained investment on a/c of fresh creditors treated as deemed income u/s 69. Rs.2,50,000 iv) Unexplained investment on a/c of credits to bank a/cs treated as deemed income u/s 69. Rs.2,11,000 v) Income from other sources Rs. 46,748 (Sale proceeds of shares)

3.

Against the above order assessee appealed before the Learned CIT(Appeals). The Learned (CIT(Appeals) obtained remand report from the Assessing Officer. In the remand report Assessing Officer confirmed action of the previous Assessing Officer. He inter alia observed that the assessee has not

3 ITA No. 96/Nag/2013.

been able to produce some of the creditors for verification. He rejected assessee's plea that notice be issued to the creditors under section 131 of the Income Tax Act. Some of the contentions of the assessee were also rejected on the plea that these were not made in the original course of assessment. Considering the remand report Learned CIT(Appeals) affirmed the action of the Assessing Officer.

4.

Against the above order assessee is in appeal before the ITAT 5. I have heard both the counsel and perused the records. Learned counsel of the assessee submitted that assessee is now in the position to produce the creditors for verification. He also submitted a chart whereby he has given the details of assessee's investments, the source thereof and certain other factual details.

6.

Per Contra Learned Departmental Representative relied upon the orders of the authorities below.

7.

Upon careful consideration I find that since the learned counsel of the

assessee has now submitted certain additional factual details and that he is

prepared to produce the creditors for verification, the interest of justice will be

served if the issue is remitted to the file of the Assessing Officer. I further note that the Assessing Officer was not correct in refusing to issue notice under

section 131 and also rejecting the contentions on the ground that they were not

submitted in the course of original assessment. Accordingly the Assessing

Officer is directed to consider the issue afresh after giving the assessee proper opportunity of being heard.

4 ITA No. 96/Nag/2013.

8.

In the result this appeal by the assessee stands allowed for statistical purposes. Order pronounced in the Open Court on this 12th day of January., 2017.

Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Nagpur, Dated: 12th January, 2017.

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