NILESH PRANLAL DOSHI, MUMBAI V. ITO 21(3)(4), MUMBAI

ITA 1285/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8067 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMARDR
• Keywords: Capital asset converted into stock in trade; Capital receipt
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1285/MUM/2015 ASSESSMENT YEAR: 2010-11 NILESH PRANLAL DOSHI SHOP NO.1 DSOUZA COMPOUND, CHANDIVALI RD, NEAR KAMANI OIL MILL ANDHERI (E) MUMBAI, PIN 400072 / VS. ITO 21 (3)(4) MUMBAI (APPELLANT) (RESPONDENT ) P.A. NO.AACPD6202F APPELLANT BY SHRI SURESH PATNI (AR) REVENUE BY SHRI SUMAN KUMAR(DR) DATE OF HEARING: 7/3/2017 DATE OF ORDER: 7/3/2017 / O R D E R PER ASHWANI TANEJA, A.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-38, MUMBAI [HE REINAFTER CALLED CIT(A)] DATED 22.12.14 PASSED AGAINST THE ASSESSMEN T ORDER DATED 14.3.13, U/S 143(3) OF THE ACT FOR ASSESSMENT YEAR 2010-11 O N THE FOLLOWING GROUNDS. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION MADE OF RS. 18,00,000/- BEING LOAN RETURNED BY M/S MAHAVIR TRAD ERS. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF MATURITY PROCEEDS OF BANK FD TO THE EXTENT OF RS. 3,00,000/- . NILESH PRANLAL DOSHI 2 THE LEARNED CIT(A) FAILED TO UNDERSTAND THAT ONCE T HE BOOKS OF ACCOUNTS HAVE BEEN REJECTED U/S 145(3), NO RELIANCE SHOULD HAVE BEEN MADE ON SUCH BOOKS OF ACCOUNTS AND ASSESSMENT HAS T O BE MADE ON THE BASIS OF THIRD PARTY EVIDENCES. THE LEARNED CIT(A) ERRED IN REJECTING THE THIRD PAR TY EVIDENCES PLACED BEFORE HIM BY THE APPELLANT WITHOUT ANY COGENT REAS ONS. THE LEARNED CIT(A) FAILED TO DIFFERENTIATE BETWEEN CAPITAL RECEIPTS AND REVENUE RECEIPTS AND WRONGLY UPHELD THE ADDITIO N MADE IN RESPECT OF CAPITAL RECEIPTS, WHICH APPELLANT PROVED BY ADDUCING THIRD PARTY EVIDENCES. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE BO OKS OF ACCOUNTS OF THE APPELLANT CONTAINED VARIOUS MISTAKES COMMITTED BY THE ACCOUNTANT AND AS THE APPELLANT IS NOT WELL VERSED WITH ACCOUNTING, THE BOOKS OF ACCOUNTS SHOULD NOT HAVE BEEN MADE BAS IS FOR UPHOLDING VARIOUS ADDITIONS. 2. DURING THE COURSE OF HEARING, IT WAS BROUGHT TO OUR NOTICE THAT THIS APPEAL HAS BEEN FILED LATE BY 14 DAYS FOR WHICH REA SONS OF DELAY WERE EXPLAINED WITH THE HELP OF THE AFFIDAVIT BY DEPOSIN G FACTS ON OATH AS UNDER:- NILESH P. DOSHI, HAVING ADDRESS AT SHOP NO. 1, DSO UZA COMPOUND CHANDIVALI ROAD, NEAR KAMANI OIL MILL, ANDHERI (EAS T), MUMBAI- 400072 SOLEMNLY AFFIRM AND STATE AS UNDER: THAT I HAVE PERSONALLY COLLECTED THE ORDER PASSED B Y HON'BLE CIT (APPEALS)-38, MUMBAI ON 27/12/2014 AND ACCORDINGLY THE DUE DATE FOR FILING APPEAL BEFORE HON'BLE ITAT WAS 26/02/201 5. THAT I HAVE BEEN SUFFERING FROM HIGH BLOOD PRESSURE FOR LAST TWO MONTHS. THAT BECAUSE OF MY HIGH BLOOD PRESSURE, I COULD NOT COMPILE ALL THE REQUISITE PAPERS FOR FILING OF APPEAL TO HON'BLE TR IBUNAL AGAINST THE SAID ORDER PASSED BY HON'BLE CIT(A)-38, MUMBAI. THAT THE DELAY IN FILING OF APPEAL BEFORE HON'BLE I TAT OF 6 DAYS IS SOLELY DUE TO THE REASON OF MY HEALTH PROBLEM THAT I PRAY BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL TO KINDLY CONDONE THE DELAY OF 6 DAYS IN FILING OF APP EAL AGAINST THE SAID ORDER OF CIT(A)-38, MUMBAI. SOLELY AFFIRMED AT MUMBAI ON THIS 2 ND DAY OF MARCH, 2015. 3. THE LD. COUNSEL ALSO DREW OUR ATTENTION ON THE MEDI CAL CERTIFICATE ISSUED BY THE DOCTOR IN SUPPORT OF THE AFORESAID AF FIDAVIT. LD. DR DID NOT RAISE SERIOUS OBJECTION FOR GRANTING CONDONATION OF DELAY. NILESH PRANLAL DOSHI 3 4. WE HAVE GONE THROUGH THE SUBMISSIONS ON THIS ASPECT AND FACTS AND CIRCUMSTANCES OF THE CASE AND FIND IT TO BE A FIT C ASE FOR GRANTING CONDONATION OF DELAY. THEREFORE, DELAY OF 14 DAYS I N FILING THIS APPEAL BEFORE US IS HEREBY CONDONED AND THE APPEAL IS ADMI TTED FOR DISPOSAL ON MERITS. 5. DURING THE COURSE OF HEARING, IT WAS STATED BY LD. COUNSEL OF THE ASSESSEE IN THIS CASE SUFFICIENT OPPORTUNITY WAS NO T GIVEN BY THE LD. AO, WHILE PASSING THE ASSESSMENT ORDER AND THE ADDITION S WERE MADE BY INVOKING PROVISIONS OF SECTION 145(2) BY ESTIMATING THE INCOME AFTER REJECTING BOOKS OF ACCOUNT. BEFORE LD. CIT(A), THO UGH REMAND REPORT WAS CALLED FOR, BUT LD. AO DID NOT GIVE PROPER OPPORTUN ITY TO THE ASSESSEE BEFORE PREPARATION OF REMAND REPORT AND THE SAME WA S PREPARED AND SENT TO LD. CIT(A) IN A HURRIED MANNER WHICH IS EVIDENCE D BY THE FACT THAT LD. CIT(A) HAD DIRECTED THE AO TO ANSWER CERTAIN QUERIE S AFTER MAKING PROPER EXAMINATION OF FACTS AND EVIDENCES, BUT THESE WERE NOT EXAMINED BY A.O. HE ALSO DREW OUR ATTENTION UPON THE BANK STATEMENTS AND THE EVIDENCES FURNISHED BEFORE THE LOWER AUTHORITIES, WHICH HAVE NOT BEEN PROPERLY EXAMINED AND ADDITION HAS BEEN MADE IN HIGHLY UNJUS TIFIED MANNER. 6. PER CONTRA, LD. DR FAIRLY STATED THAT THESE ISSUES CAN BE SENT BACK TO THE AO FOR PROPER EXAMINATION PROVIDED ASSESSEE EXT ENDS FULL COOPERATION TO THE AO FOR SUBMISSIONS OF REQUISITE DETAILS AND EVIDENCES. 7. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES AND THE SUBMISSIONS MADE BY BOTH OF THE PARTIES BEF ORE US. IT IS APPARENT ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW T HAT DETAILS AND EVIDENCES HAVE NOT BEEN EXAMINED PROPERLY BY THE LOWER AUTHOR ITIES BEFORE MAKING HUGE ADDITION IN THE HANDS OF THE ASSESSEE; THEREFO RE, WE SEND ALL THE GROUNDS RAISED BY THE ASSESSEE BACK TO THE FILE OF THE AO FOR THEIR PROPER NILESH PRANLAL DOSHI 4 ADJUDICATION AFRESH. THE AO SHALL GIVE ADEQUATE OPP ORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL EXTEND FULL COOPER ATION TO THE AO BY FILING REQUISITE DETAILS AND EVIDENCES AS MAY BE REQUIRED BY THE AO TIME TO TIME, AS PER LAW. THE AO SHALL EXAMINE ALL THE EVIDENCES AS MAY BE BROUGHT ON RECORD BY THE ASSESSEE ON OBJECTIVE BASIS BEFORE DE CIDING THESE ISSUES AFRESH. WITH THESE DIRECTIONS ALL THE GROUNDS OF TH E ASSESSEE ARE SENT BACK TO THE FILE OF AO AND MAY BE TREATED AS ALLOWED, FO R STATISTICAL PURPOSE. 8. AS A RESULT, THIS APPEAL MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE CONCLUSI ON OF HEARING. SD/- SD/- (MAHAVIR SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 07.03.2017 V. P. SINGH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI