Income Tax Appellate Tribunal - Ahmedabad
Deputy Commissioner Of Income Tax vs Jupiter Distillery on 2 November, 1999
Equivalent citations: (2001)68TTJ(AHD)501
ORDER
R. K. Bali A.M. These three appeals by the revenue and cross-objections by the assessee relating to assessment years 1982-83, 1983-84 and 1984-85 are taken up together and disposed of by this common order for the sake of convenience. The common substantive grounds taken by the revenue in its appeals are as under :
(i) The Commissioner (Appeals) erred in deleting the addition in respect of unexplained cash credits assessment year 1982-83 Rs. 1,00,000., assessment year 1983-84 Rs. 3,80,000 and assessment year 1984-,85 Rs. 3,70,000.
(ii) The Commissioner (Appeals) erred in overlooking the evidence on record that during the course of investigation in Bombay some cash creditors had confirmed before the enquiry officer that they had only given names and not advanced any loans and in overlooking the facts that in spite of repeated opportunities provided to the assessee he failed to prove the genuineness and creditworthiness of even one of the cash creditors.
2. The grounds of cross objections taken by the assessee for three assessment years are as under :
(i) The Commissioner (Appeals) erred in not giving clear decision relating to action of assessing officer in reopening the assessments for assessment years 1982-83 to 1984-85.
(ii) The Commissioner (Appeals) erred in not giving any decision about validity of assessment made under section 143(3) read with section 147/148 without giving any notice under section 143(3) and/or section 142(1) of Income Tax Act.
3. Briefly the facts are that all these three appeals by the revenue and cross-objections by the assessee are directed against the common order dated 7-3-1994, passed by the Commissioner (Appeals)-I, Surat. The original assessments in the case of the assessee were completed for assessment years 1982-83 & 1983-84 on 21-8-1985, and for assessment year 1984-85 on 7-2-1986, determining the total income at Rs. nil under section 143(3). Subsequently, during the course of assessment proceedings for assessment year 1989-90 the assessing officer found that there were certain cash credits in the books of accounts of the assessee which were of doubtful nature because during the course of investigation in Bombay, some of these cash creditors have confirmed before the inquiry officer that they had only given names and not advanced any genuine loan to the parties who approached them. On the basis of that information, the proceedings in the case of the assessee for assessment years 1982-83, 1983-84 and 1984-85 were reopened under section 147 and notices under section 148 were issued on 10-7-1992. In response to the notices issued under section 148, the assessee filed returns on 6-8-1992. Thereafter, the assessing officer completed the assessments under section 143(3) read with section 148 on 7-10-1992, by making an addition of Rs. 1,00,000 for assessment year 1982-83, Rs. 3,80,000 for assessment year 1983-84 arid Rs. 3,70,000 for assessment year 1984-85 on account of unproved cash credits on the basis of information obtained from the assessing officer before whom some of the parties have confessed that they were indulging into name-lending activity only and they have not given any genuine loan to the parties.
4. The assessee appealed and pleaded before the Commissioner (Appeals) that there was no ground for reopening the assessments and the assessing officer has not made any enquiry whatsoever during the course of reassessment proceedings and the reassessment proceedings were completed without issuing any specific notices under section 142(1) and/or section 143(3) and the reassessments were simply based on the basis of some alleged information received from the assessing officer at Bombay before whom some of the creditors have admitted that they were indulging into name-lending activity. The Commissioner (Appeals) during the course of appellate proceedings directed the assessing officer on 23-9-1993, to issue summons to all the parties from whom the assessee had taken loans and examine them at Bombay and in pursuance to the order of the Commissioner (Appeals), the assessing officer conducted examination of those parties at Bombay and he submitted the remand report to the Commissioner (Appeals) on 13-1-1994, which report has been reproduced by the Commissioner (Appeals) in his appellate order at pages 3 and 4. The Commissioner (Appeals) also took note of the fact that at the time of original assessments the details of loans along with the confirmation letters were filed and subsequently during the course of proceedings conducted by the assessing officer at Bombay pursuance to the directions of the Commissioner (Appeals), affidavits of the creditors were filed and their statements were also recorded. In the affidavits/statements the creditors admitted having given genuine loans to the assessee and the assessing officer was satisfied about the genuineness of the loans and he stated so in his report submitted to the Commissioner (Appeals) on 13-1-1994, which have been reproduced in the order of the Commissioner (Appeals). Accordingly, the Commissioner (Appeals) deleted the additions made by the assessing officer for all the three years under consideration although the Commissioner (Appeals) has not given any decision relating to the action of the assessing officer in reopening the assessments for assessment years 1982-83 to 1984-85 as well as the validity of the orders passed by the assessing officer under section 143(3) read with section 147/148 without giving any specific notice under sections 143(2), 142(1) and/or 143(3) of the Act.
5. Aggrieved with the order of the Commissioner (Appeals) the revenue has filed case appeals while the assessee has filed cross-objections in relation to the action of the Commissioner (Appeals) in not recording specific finding with regard to the assumption of jurisdiction by the assessing officer under section 147 as well as the validity of the assessments framed under section 143(3) read with sections 147/148 of the Act.
6. We have considered the rival submissions and have also gone through the orders passed by the assessing officer as well as the Commissioner (Appeals). We are constrained to observe that the revenue has filed these appeals without application of mind. The original assessments for all these years were completed by the assessing officer under section 143(3) when the information with regard to these cash credits along with the confirmation letters were filed by the assessee and were on the record of the assessing officer. Subsequently the proceedings were reopened on the basis of statements given by some of the creditors before the inquiry officer at Bombay and on the basis of that the proceedings were reopened under section 147 and the reassessments were framed without giving any specific opportunity to the assessee which is a clear violation of the principles of natural justice. During the course of appellate proceedings before the Commissioner (Appeals) the learned first appellate authority required the assessing officer to examine the parties at Bombay and also allow cross-examination to the assessee. Pursuant to the directions of the Commissioner (Appeals) the assessing officer did examine the cash creditors at Bombay by holding camp on 13th and 14-12-1993 and some of the parties from Daman were produced and examined by the assessing officer at Surat on 22-12-1993. Thereafter the assessing officer has submitted a report to the Commissioner (Appeals) accepting that all the loans are genuine and he was satisfied by the statements as well as affidavits filed by the creditors. On the basis of that report of the assessing officer, the Commissioner (Appeals) deleted the additions for all the three assessment years under consideration. In this view of the matter, we fail to understand as to how the revenue can be aggrieved with the order of the Commissioner (Appeals). Accordingly, we dismiss all these appeals filed by the revenue .
Since we are dismissing the appeals filed by the revenue on the merits of the case, we do not think it proper to adjudicate on the legal cross- objections taken by the assessee which in any case will become infructuous once the additions are deleted on merits.
7. By virtue of power vested in the Tribunal by section 254(2B) we order the revenue to pay Rs. 2,000 as cost of these appeals to the respondent- assessee.
8. Accordingly, the appeals by revenue and cross-objections by assessee both are dismissed.