The ITO, Ward-11(2), Ahmedabad V. Shri Rushang R.Maniar, Ahmedabad

ITA 2537/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6560 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 03-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAVANSHI
• Assessee Lawyers: A P NANAVATY
• Keywords: Opportunity of being heard; Reasonable cause; Corroborative evidences

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M THE INCOME-TAX OFFICER, WARD-11(2), AHMEDABAD. VS. SHRI RUSHANG R. MANIAR, PRASHANT, NR. JAIN MERCHANT SOCIETY, MAHALAXMI CROSS ROAD, AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- MR. G. S. SOURYAVANSHI, SR.DR RESPONDENT BY:- SHRI A. P. NANAVATY, AR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) WHEREIN HE HAS CANCELLED THE PENALTY OF RS.2 ,60,480/- LEVIED BY THE AO U/S 271(1)(C). THE REVENUE HAS RAISED THE FO LLOWING GROUNDS :- (1) THE LD. CIT(A) HAS ERRED IN FACTS AND ON LAW IN DEL ETING THE PENALTY U/S 271(1)(C). (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. (3) THE LD. CIT(A) FAILED TO ANALYSE AND APPRECIATE THE FACTS THAT THE ONUS CAST ON ASSESSEE AS PER EXPLANATION 1 TO SECTI ON 271(1)(C) IS NOT DISCHARGED BY THE ASSESSEE. ITA NO.2537/AHD/2009 ASST. YEAR 2002-03 ITA NO.2537/AHD/2009 ASST. YEAR 2002-03 2 (4) THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT E VEN IF THE BORROWERS ARE GENUINE, NO EVIDENCE WAS FILED TO PRO VE THAT THEY WERE UTILIZED FOR THE PURPOSE OF BUSINESS AND HENCE THE CLAIM FOR DEDUCTING INTEREST IS NOT GENUINE AND BONA FIDE AND CORRECT ON THE FACTS OF THE CASE, THUS CLEARLY ATTRACTING T HE PROVISION OF SEC.271(1)(C) READ WITH EXPLANATION-1 THEREOF. 2. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT ASSESSEE HAS CLAIMED FOLLOWING EXPENSES FOR WHICH NO SUPPORTING EVIDENCE WAS FURNISHED:- I) BANK INTEREST RS.90,211/- II) INTEREST ON UNSECURED LOANS RS.7,34,600/- (7596-24800) III) STATIONERY & PRINT EXP. RS.1,781/- IV) VEHICLE EXPENSES RS.7,915/- V) VEHICLES INSURANCE RS.450/- VI) VAKIL FEES RS.450/- VII) ACCOUNTING CHARGES RS.15,500/- VIII) BANK CHARGES RS.619/- RS.8,51,226/- THE ASSESSEE IS ENGAGED IN THE WORK OF REAL ESTATE DEVELOPMENT AND IS PROPRIETOR OF M/S RUSHI DEVELOPERS. IN RESPONSE TO THE QUERY ABOUT EVIDENCE IN SUPPORT OF ABOVE EXPENDITURE ASSESSEE S UBMITTED THAT HARD- DISC OF THE COMPUTER FAILED AND, THEREFORE, EVIDENC E COULD NOT BE FURNISHED. THE ADDITION SO MADE WAS CONFIRMED BY LD . CIT(A). HOWEVER, THE TRIBUNAL VIDE ITS ORDER IN ITA NO.3555/AHD/2007 RESTORED THE MATTER TO THE FILE OF LD. CIT(A) AS HE HAD PASSED AN EX PA RTE ORDER ON ACCOUNT OF DELAY IN FILING THE APPEAL BEFORE HIM. THE TRIBUNAL HAD CONDONED THE ITA NO.2537/AHD/2009 ASST. YEAR 2002-03 3 DELAY VIDE ITS ORDER PRONOUNCED ON 8.10.2010 AND R ESTORED THE MATTER TO THE FILE OF LD. CIT(A) FOR DECIDING THE ISSUE AFRES H AS UNDER :- 3. WE FIND FROM THE ARGUMENTS OF BOTH THE SIDES TH AT THERE IS REASONABLE CAUSE IN FILING THE APPEAL BY THE DELAY OF 541 DAYS AS THE ORDER OF CIT(A) DATED 11.11.2005 WAS RECEIVED ON 31 .12.2005 BUT DURING THAT PERIOD THE ASSESSEE WAS SUFFERING FROM KIDNEY STONE AND FURTHER IN APRIL, 2006 I.E. ON 27.4.2006 THE ASSESSEE MOVED A RECTIFICATION APPLICATION BEFORE THE CIT(A) FOR RECALLING OF EX P ARTE ORDER. THE CIT(A) REJECTED THE MISCELLANEOUS APPLICATION VIDE ORDER D ATED 26.3.2007 AND AFTER THAT THE ASSESSEE DEPOSITED APPEAL FEE ON 30. 7.2007 AND THE APPEAL WAS FILED ON 24.8.2007. AS THE ASSESSEE WAS AVAILIN G ALTERNATIVE REMEDY AND WAS ALSO SUFFERING FROM KIDNEY PROBLEM DUE TO T HAT THE APPEAL GOT DELAYED. WE FIND THE CAUSE AS REASONABLE AND ACCORD INGLY WE ADMIT THE APPEAL. IT IS SEEN THAT THE ORDER OF CIT(A) IS AN E X PARTE ORDER HENCE THE APPEAL IS REMITTED BACK TO THE FILE OF CIT(A) FOR R E-HEARING AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. WE HAVE HEARD THE PARTIES. IN OUR CONSIDERED VIE W, ONCE QUANTUM IS RESTORED TO THE FILE OF LD. CIT(A) FOR DECIDING THE ADDITIONS ON MERITS, THE PENALTY AS SUCH CANNOT BE LEVIED UNLESS QUANTUM ADDITIONS ARE EXAMINED BY THE LD. CIT(A) AND BY THE TRIBUNAL. WE ACCORDINGLY, RESTORE THE PENALTY MATTER TO THE FILE OF LD. CIT(A) WITH T HE DIRECTION TO DECIDE THE ISSUE OF LEVY OF PENALTY U/S 271(1)(C), AFTER HE DI SPOSES OF QUANTUM ADDITIONS COVERING THE PENALTY. AS A RESULT, THE AP PEAL FILED BY THE REVENUE IS ALLOWED BUT FOR STATISTICAL PURPOSES. ITA NO.2537/AHD/2009 ASST. YEAR 2002-03 4 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 7/6/11. SD/- SD/- (BHAVNESH SAINI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 7/6/11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 13/6/11 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 14/6/11 /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..