BHUMIKATRANSPORT JV BNRA,THANE V. ASSISTANT COMMISIONER OF INCOME CIRCLE 19(1), MUMBAI

ITA 1870/MUM/2024

AI Insights

The case involves Bhumika Transport JV, a joint venture engaged in municipal solid waste management, which faced disputes among its members leading to halted operations and non-filing of income tax returns for AY 2017-18. The Income Tax Department issued a notice due to substantial cash transactions during demonetization, leading to an assessment under section 144 of the Income-tax Act, 1961. The tribunal's decision focused on whether the additions made to the assessee's income were justified, particularly concerning cash deposits and credit entries in the bank account.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473315 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-08-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 12-04-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: RAHUL HAKANI
• Section: 144

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 1870/MUM/2024 (A.Y. 2017-18) Bhumika Transport JV BNRA House No. 610/C Wing, Flat No. 604, 6th Floor, Siddhivinayal Complex, Phase II, Temghar, Kalyan, Thane-421302 v/s. बनाम ACIT, Circle 19(1) 203, 2nd Floor, Matru Mandir, Tardeo Road, Mumbai-400007 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AABAB5560A Appellant/अपीलार्थी .. Respondent/प्रतिवादी Appellant by : Shri Rahul Hakani Respondent by : Shri R. R. Makwana Date of Hearing 08.08.2024 Date of Pronouncement 07.10.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai-30/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 13.02.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2017-18. ITA No. 1870/Mum/2024 A.Y. 2017-18 Bhumika Transport JV BNRA Page 2 of 4 2. The assessee has raised following grounds of appeal: a. “The Learned CIT(A)/NFAC erred in making addition of Rs 5,43,358/- being 8% of Rs 67,91,980/- without appreciating that Rs 67,91,980/- do not represent any taxable revenue receipt and hence the addition of Rs 5,43,358/- may be deleted.” 3. Brief facts of the case are that the assessee is a joint venture with four members formed in the year 2011 for carrying out works of municipal solid waste management in Bhiwandi, district Thane. The assessee did not file its return of income for AY 2017-18 for the reason that the work was stopped due to differences and disputes among the JV members in the preceding year. The assessee had made huge cash transactions during the demonetization period in its bank account due to which a notice u/s 141(1) was issued on 28.08.2019 requiring it to explain the source and nature of all the cash deposits. The assessment was finalized u/s 144 after making the following additions: a. Rs. 22,90,000/- cash deposits in the bank account b. Rs. 3,60,158/- @8% of credit entries of Rs. 45,01,980/- 4. During appeal, the assessee explained that there was no income during the year and credit entries represented amounts recovered from the debtors on account of sale of plant & machinery i.e. the vehicles. 5. Vide order dated 13.02.2024, Ld. CIT(A) deleted the additions of cash deposits of Rs. 22,99,000/-. However, he estimated income @8% of total cash and credit entries amounting to Rs. 67,91,980/- ITA No. 1870/Mum/2024 A.Y. 2017-18 Bhumika Transport JV BNRA Page 3 of 4 6. Before us, the only ground of appeal relates to estimation of income @8% of Rs. 67,91,980/-. The Ld. AR submitted that the business of the assessee had stopped in the earlier year, as such, there was not trading or any other activity during the year under consideration. Moreover, the cash deposits of Rs. 22,99,000/- pertain to previous assessment year and no addition can be made in the current year by estimation of income out of these deposits. Further, there is no dispute regarding the fact that the total amount of Rs. 54,01,980/- credited in the bank account represents recovery from debtors on account of sale of vehicles which were sold on ‘as is where is’ basis in the preceding assessment year, resulting in short term capital loss, but amount due from purchasers was received in current assessment year. 7. We have heard the rival submissions and examined the material available before us. Clearly, the cash deposits amounting to Rs. 22,99,000/- pertain to previous assessment year i.e. AY 2016-17. As such, no addition can be made by estimating income embedded in these deposits. With regard to credit entries amounting to Rs. 45,01,980/-, the assessee’s claim regarding short term capital loss during AY 2016-17 is supported by the copy of return for AY 2016-17 placed before us. The assessee has shown short term capital loss amounting to Rs. 3,26,06,355/- from the sale of depreciable assets while filing the return for AY 2016-17 at nil income on 29.03.2017. ITA No. 1870/Mum/2024 A.Y. 2017-18 Bhumika Transport JV BNRA Page 4 of 4 8. In view of above, we find that there is no reason to make any addition in the hands of the assessee during the year under consideration. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 07.10.2024. Sd/- Sd/- SANDEEP SINGH KARHAIL RENU JAUHRI (न्यातयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिनाुंक /Date 07.10.2024 अननक ेत स ुंह राजपूत/ स्टेनो आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai. "