RAMLAH IDRIS GHADIALY,MUMBAI vs. ITO 16(3)(2), MUMBAI

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ITA 3350/MUM/2013Status: DisposedITAT Mumbai14 January 2016AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) confirmed the addition without assigning reasons or passing a speaking order, thus breaching the principles of natural justice. Therefore, the issue was remanded to the AO for fresh examination.

What were the facts?

The assessee's appeal concerned an addition of Rs. 16,47,766/- made by the AO on account of alleged unexplained cash deposits in a bank account. The assessee contended that the CIT(A) erred in confirming the addition without granting a proper opportunity to be heard and without considering the submissions regarding peak credit additions.

What were the issues?

Whether the CIT(A) erred in confirming the addition without granting adequate opportunity of being heard and without properly considering the submissions on peak credit additions, thus violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI SANDEEP GOSAIN

For Appellant: Shri Nishit Gandhi
For Respondent: Shri Sujit Bangar, DR
Hearing: 07.01.2016Pronounced: 14.01.2016

PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 30.4.2013 is against the order of the CIT (A)-27, Mumbai dated 25.2.2013 for the assessment year 2008-2009. In this appeal, assessee raised two grounds and the same read as under:

“1. Natual justice

1.

1 The Ld CIT (A) erred in not granting proper, sufficient and adequate opportunity of being heard to the assessee while framing the appellant order.

1.2.

It is the submitted that in the facts and in the circumstances of the case and in law, the appellate order so framed be held as bad and illegal, as (i) The same is framed in breach of the principles of natural justice; and (ii) The same is passed without application of mind to the facts and the submissions brought on record by the assessee. Without prejudice to the above

2.1.

The Ld CIT (A) erred in confirming the action of the AO in making addition of Rs. 16,47,766/- being credit entries in the bank account without Bombay Mercantile Co-operative Bank Ltd by treating the same as alleged unexplained cash deposits u/s 68 of the Income Tax Act, 1961. 2. 2. It is submitted that in the facts and the circumstances of the case and in law, no such addition was called for. 2.3. without prejudice to the above, assuming – but not admitting – that any disallowance was called for, it is submitted that the computation of addition made by the AO is arbitrary, excessive and not in accordance with the law.”

2.

At the outset, Ld Counsel for the assessee brought our attention to Ground no.1 and submitted that the said ground needs to be remanded to the file of the AO

as the assessment and the and the first appellate authority proceedings were completed without granting reasonable opportunity of being heard to the assessee. While pleading for remanding, Ld Counsel for the assessee brought our attention to the bank statements and submitted that the AO made addition of Rs. 16,47,766/- on account of deposits in the bank account with Bombay Mercantile Co-operative Bank Ltd bearing the Account No.50015. Narrating the deposits in the said bank account, Ld Counsel for the assessee brought our attention to the withdrawals of cash as well as the expenditure, credits and deposits and the facts and circumstances of this case and submitted that it is a case for making „peak credits additions‟ and not the entire addition of Rs. 16,47,766/- as „unexplained cash deposits‟ u/s 68 of the Act.

3.

On the other hand, Ld DR for the Revenue relied on the orders of the Revenue Authorities.

4.

We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. After hearing both the parties and considering the above submissions of the Ld Counsel for the assessee, we find it relevant to remand this issue to the file of the AO on the ground of „natural justice‟. We have also noticed that assessee made submissions to the Authorities below for considering the „peak credit additions‟. But, without assigning any reasons or without passing any speaking order, CIT (A) confirmed the additions, which in our opinion is unsustainable in law. Therefore, we order the Assessing Officer to examine the issue afresh after attending to all the submissions of the assessee including the requirement of considering the attendance of the brother of the assessee and also attending to the approved manner of adding „peak credits‟ only in matters where the assessee discharged his own and in matters of end utilization of the cash withdrawals from the bank account. AO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice. Accordingly, the Grounds raised by the assessee are allowed for statistical purposes.

5.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 14th January, 2016. (SANDEEP GOSAIN) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 14.1.2016

3 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- 3. 4. आमकय आमुक्त / CIT 5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 6. गार्ड पाईर / Guard file. सत्मावऩत प्रनत ////

आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt.

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