M/S SANWARMAL DURGADUTT, Mumbai V. ITO WARD 33(3)(3), Mumbai

ITA 192/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8134 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Keywords: Gift; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.192/MUM/2019 ( ASSESSMENT YEAR: 2010-11) M/S SANWARMAL DURGADUTT, 43-CD,GOVT. IND. ESTATE, CHARKOP, KANDIVALI(W), MUMBAI-400067. VS. I.T.O. WARD 33(3)(3), C-12, PRATYAKSHAKAR BHAWAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. PAN/GIR NO.AABFS 6651 E (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI RAVIKANT PATHAK (AR) REVENUE BY SHRI AKHTAR H ANSARI (DR) DATE OF HEARING 22/01/2020 DATE OF PRONOUNCEMENT 23/01/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E EX PARTE ORDER DATED 16/10/2018 OF LD. CIT(A)-45, MUMBAI FOR THE A.Y. 2010-11 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS BASICALLY AGGRIE VED FOR THE EX PARTE ORDER PASSED BOTH BY THE A.O. AND THE LD. CIT (A) WHEREIN VARIOUS DISALLOWANCES HAVE BEEN MADE. IT WAS CONTEN DED BY THE LD AR OF THE ASSESSEE THAT THERE WAS A DISPUTE IN THE FAM ILY, THEREFORE, ITA NO. 192/MUM/2019 M/S SANWARMAL DURGADUTT VS ITO 2 NECESSARY DOCUMENTS ASKED BY THE A.O. COULD NOT BE FILED SINCE THE PERSON AGGRIEVED WAS NOT HANDED OVER THE RECORDS. A N AFFIDAVIT TO THIS EFFECT WAS ALSO FILED BEFORE THE TRIBUNAL. 3. I HAVE GONE THROUGH THE AFFIDAVIT SO FILED, WHIC H READS AS UNDER: I, MR. MOHMMED HANIF MOHMMED AYUB SAYYED AGED ABOUT 35 YEARS, SON OF MR. MOHMMED AYUB SAYYED, CURRENTLY RE SIDING AT C-601/602, SHIVDHAM CHS LTD, NEW LINK ROAD, NEAR MOVIETIME THEATER, MALAD (WEST), MUMBAL 400064, DO HEREBY SOLEMNLY AFFIRM AND STATE AS UNDER: 1. THAT I AM AN EDUCATED PERSON. I CAN UNDERSTAND, SPEAK AND WRITE ENGLISH. 2. THAT IN THE YEAR 2002, MY FAMILY TOOK OVER THE R UNNING BUSINESS OF M/S SANWARMAL DURGADUTT BY BECOMING THE PARTNERS IN THAT FIRM. ACCORDINGLY, MY MOTHER MRS. AMEENDUN NISHA SAYYED, MY ELDER BROTHER MOHMMED HABIB SAYYED AND MYSELF BECAME PARTNER IN THE FIRM. 3. THAT AFTER TAKING OVER THE BUSINESS MY FATHER WA S LOOKING AFTER THE BUSINESS OF THE FIRM. I AND MY ELDER BROTHER, THOUGH NEW IN THE BUSINESS, WERE HELPING MY FATHER IN OUR BUSINESS. MY FATHER WAS AL SO RUNNING PROPRIETARY BUSINESS IN THE NAME OF M/S HAB IB FOUNDERS AND ENGINEERS. BUSINESS OF THE FIRM AS WELL AS PROPRIETARY CONCERN WAS THAT OF MANUFACTURE OF METAL CASTINGS IN A FOUNDRY. 4. THAT SOMEWHERE IN THE YEAR 2003, MY ELDER BROTHE R MOHMMED HABIB GOT MARRIED TO A GIRL WHO WAS NON- ITA NO. 192/MUM/2019 M/S SANWARMAL DURGADUTT VS ITO 3 MUSLIM. MY FATHER WAS THEREFORE, VERY MUCH UPSET. D UE TO THIS THERE WERE DISPUTES IN THE FAMILY AND ULTIMATELY, HABIB RETIRED FROM THE PARTNERSHIP FIRM . 5. THAT AFTER TWO YEARS, DISPUTE WAS SETTLED AND MO HMMED HABIB AGAIN STARTED HELPING US IN THE BUSINESS. BUT PEACE DID NOT LAST VERY LONG. AFTER MY MARRIAGE, AG AIN QUARREL STARTED IN THE FAMILY. TO SETTLE THIS, A SE PARATE HOUSE WAS PURCHASED AND MY ELDER BROTHER WAS SHIFTE D THERE. STILL HE WAS NOT HAPPY AND WAS RAISING MANY ISSUES FOR HIS RIGHTS. TO SETTLE THIS ALSO MY FATHER SHIFT ED THE FOUNDRY TO VASAI (DIST PALGHAR) AND ASKED MOHMMED HABIB TO MANAGE THE BUSINESS. 6. THAT DUE TO ONGOING ISSUES IN THE FAMILY, MOHMME D HABIB WAS NOT CO-OPERATING THE FAMILY IN ITS BUSINE SS. WITHOUT REALISING THE CONSEQUENCES, MANY LETTERS RECEIVED F ROM CUSTOMERS, SUPPLIERS AND GOVERNMENT AUTHORITIES WERE KEPT BY MOHMMED HABIB UNATTENDED AND DID NOT TAKE ANY ACTION ON IT. DUE TO THIS THERE WERE DELAYS IN RECEIVING PAYMENTS FROM THE CUSTOMERS. THIS AFFECTED THE BUSINESS VERY BADLY. THAT THE PAP ERS STATED ABOVE INTER ALIA INCLUDE THE NOTICES /PAPERS/ORDERS FROM INCOME TAX AUTHORITIES. 7. THAT MY FATHER, THEREFORE, REDUCED THE BUSINESS ACTIVITIES AND GAVE PART OF THE FACTORY ON RENT AND ASKED MOHMMED HABIB TO ATTEND THE FOUNDRY SET UP AT VASAI. AGAIN HERE ALSO HE MADE A MESS AND CREATED HUGE LIABILITY FOR MAKING PAYMENTS TO SUPPLIERS. TH ERE ALSO MY FATHER DECIDED TO CLOSE THE BUSINESS AND GA VE FACTORY ON RENT. ITA NO. 192/MUM/2019 M/S SANWARMAL DURGADUTT VS ITO 4 8. THAT RECENTLY, TO SETTLE THE DISPUTE FOREVER, MY FATHER DECIDED TO GIFT HIS RUNNING PROPRIETARY BUSINESS TO MY ELDER BROTHER MOHMMED HABIB. HOWEVER, WHEN I PUT A CONDITION THAT ALL THE LIABILITY OF THE FIRM M/S SANWARMAL DURGADUTT SHOULD BE CLEARED PAID BY HIM, HE BACKED OUT AND DECLINED TO ACCEPT THIS OFFER. 9. THAT DUE TO ABOVE DISPUTES IN THE FAMILY AS WEL L AS IN THE BUSINESS, NO ONE APPEARED BEFORE THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS) RESULTING INTO PASSING OF EX-PARTE ORDERS . I, MOHMMED HANIF MOHMMED AYUB SAYYED, SOLEMNLY AFFIRM ON OATH THAT TO THE BEST OF MY KNOWLEDGE AND BELIEF, WHATEVER STATED ABOVE IS TRUE AND CORRECT. MOHMMED HANIF MOHMMED AYUB SAYYED DEPONENT 4. IT IS CLEAR FROM THE AFFIDAVIT THAT DUE TO DISPU TE BEING GOING ON IN THE FAMILY, THE RECORDS COULD NOT BE PRODUCED BE FORE THE A.O. THEREFORE, IN THE SUBSTANTIAL INTEREST OF JUSTICE, I RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR DECIDING THE ISSUE AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO APPEAR WITH ALL THE RECORDS WITHIN A PERIOD OF 6 0 DAYS FROM THE DATE OF RECEIPT OF THIS ORDER. THE A.O. IS AT LIBERTY TO PASS ORDER IN CASE OF ANY FAILURE ON THE PART OF ASSESSEE TO PRODUCE NECE SSARY RECORD BEFORE HIM. I DIRECT ACCORDINGLY. ITA NO. 192/MUM/2019 M/S SANWARMAL DURGADUTT VS ITO 5 5. IN THE RESULT, APPEAL OF THE ASSESSEE IN ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JANUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 23/01/2020 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//