Pravin Ambalal Patel, Ahmedabad V. The Deputy Commissioner of Income Tax, Circle-4(2), Ahmedabad

ITA 3138/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7009 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P SRIVASTAVA
• Keywords: Condonation of delay; Reason to believe; Reassessment proceedings
• Section: 271(1)(c); 143(1); 195; 147; 148

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.3138/AHD/2016 / ASSTT. YEAR: 2010-12 PRAVIN AMBALAL PATEL 100, SWAMI AKHANDANAND SOCIETY RANNPARK, GHATLODIA AHMEDABAD 380001. PAN : AGEPP 1301 P VS. DCIT, CIR.4(2) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI PRITESH SHAH, AR REVENUE BY : SHRI B.P. SRIVASTAVA, SR.DR ! / DATE OF HEARING : 11/01/2019 '#$ ! / DATE OF PRONOUNCEMENT: 15 /01/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-4, AHMEDABAD DATED 11.7.2016 PASSED FOR T HE ASSTT.YEAR 2010-11. 2. REGISTRY HAS POINTED OUT THAT APPEAL FILED BY TH E ASSESSEE IS TIME BARRED BY 65 DAYS. IN ORDER TO EXPLAIN THE DELAY, THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY AS WELL AS AFFIDAVIT DEPOSED ON 28.11.2016. IN THE AFFIDAVIT, ASSESSEE HAS DEPOSED THAT THE LD.CIT(A) ITA NO.3138/AHD/2016 2 HAS DECIDED HIS APPEAL ON 11.7.2016 AND THE ORDER W AS SERVED ON 27.7.2016. HIS FATHER WAS OLD AND ADMITTED TO THE HOSPITAL. HE WAS SUFFERING FROM HEART PROBLEM AND ANGIOGRAPHY WAS DO NE IN BETWEEN 24.6.2016 TO 27.6.2016. SIMULTANEOUSLY, WIFE AND D AUGHTER WERE NOT KEEPING GOOD HEALTH. DAUGHTER WAS DIAGNOSED WITH DENGUE AND ADMITTED IN HOSPITAL, AND ON ACCOUNT OF BAD HEALTH OF FAMILY MEMBERS, HE COULD NOT FILE APPEAL WITHIN TIME. IT BECAME TI ME BARRED BY 65 DAYS. 3. THE LD.DR, ON THE OTHER HAND CONTENDED THAT THIS IS GENERAL EXPLANATION AT THE END OF THE ASSESSEE. ANGIOGRAPH Y WAS DONE PRIOR TO THE SERVICE OF ORDER PASSED BY THE LD.CIT(A). SIMI LARLY, WIFE WAS FALLEN ILL IN THE MONTH OF AUGUST, 2016. THUS, THERE WAS NO SPECIFIC EXPLANATION AT THE END OF THE ASSESSEE. 4. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE CONTENTIONS OF THE ASSESSEE ARE THAT THREE MEMBERS OF THE FAMILY WERE NOT KEEPING GOOD HEALTH DURING THAT PERIOD. HE WAS PREOCCUPIED IN TAKING THEIR CARE. ATMOSPHER E IN THE FAMILY WAS NOT SO CONDUCIVE WHICH CAN GIVE HIM FREE TIME TO PA Y ATTENTION TOWARDS OTHER ISSUES. THEREFORE, HE COULD NOT PROSECUTE HI S INCOME-TAX PROCEEDINGS AND DELAY HAS HAPPENED IN FILING THE AP PEAL. CONSIDERING THE ABOVE CIRCUMSTANCES, AND NON-AVAILABILITY OF AN Y PROOF THAT A DELIBERATE ATTEMPT AT THE END OF THE ASSESSEE TO FI LE APPEAL, AFTER EXPIRY OF LIMITATION, AS A MATTER OF STRATEGY, WE ARE OF T HE VIEW THAT A BONA FIDE MISTAKE HAS HAPPENED AT THE END OF THE ASSESSEE. THEREFORE, WE CONDONE THE DELAY IN FILING THE APPEAL AND PROCEED TO DECIDE THE APPEAL ON MERIT. 5. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND OF APPEAL, VIDE WHICH HE HAS CHALLENGED REOPENING OF THE ASSESSMENT . APART FROM CHALLENGING REOPENING OF THE ASSESSMENT, THE ASSESS EE IS IMPUGNING ADDITION OF RS.11,86,871/- WHICH WAS MADE BY THE AO BY DISALLOWANCE OF FUTURE AND OPTION LOSS CLAIMED BY THE ASSESSEE. ITA NO.3138/AHD/2016 3 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME ON 15.10.2010 DECLARING TOTAL INCOME AT RS.2 2,98,080/-. THIS RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE IN COME TAX ACT. THEREAFTER, THE AO HAD ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 16.5.2013 AFTER RECORDING REASONS FOR REOPENING UND ER SECTION 147 OF THE ACT. THE REASONS RECORDED BY THE AO READ AS UN DER: 3. REASONS FOR REOPENING THE CASE U/S 147 OF THE I T. ACT WAS AS UNDER :- 'SHRI PRAVINBHAI AMBALAL PATEL HAVING PAN NO. AGEPP 13Q1P, THE ASSESSEE HAS SOLD OUT PROPERTY BEARING SURVEY NO. 2 02 AT VILLAGE SUGHAD (DIST, GANDHINAGAR), VIDE SALE DEED REGISTER ED ON 30,06.2009 I.E. IN FY. 2009-10 RELEVANT TO A, Y. 2010-11 AND R ECEIVED MS, 36,04,795/- AS A CO-SELLER WITH SHRI SATISHKUMAR AM BALAL PATEL, AHMEDABAD. AS PER RECORDS, THE ASSESSEE HAS FILED HIS RETURN O F INCOME FOR A.Y, 2010-11 ON 15.10.2010 VIDE ACKNOWLEDGMENT NO. 17209 7880151010 (E-FILING) DECLARING TOTAL INCOME OF RS. 22,98,080/ ~. THEREFORE, / HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED FROM ASSESSMENT WITHIN THE MEANING OF S ECTION 147 OF THE IT. ACT AND ASSESSMENT OF THE ASSESSEE IS REQUI RED TO BE RE- OPENED' 7. AFTER HEARING THE ASSESSEE, LD.AO HAS PASSED RE- ASSESSMENT ORDER ON 27.3.2015. HE MADE AN ADDITION OF RS.11,86,871/ -. THE DISCUSSION MADE BY THE AO ON THIS ADDITION READS AS UNDER: 3.4. ON VERIFICATION OF THE DETAILS SUBMITTED AND ON PERUSAL OF P & L ACCOUNT, IT IS SEEN THAT ASSESSEE HAS DEBITED MISC. EXPENSES OF RS. 11,86,871/-, THE A.R, OF THE ASSESSEE WAS ASKED TO GIVE EXPLANATION AND EVIDENCE REGARDING THE EXPENSES DEBITED. 3.5. IN RESPONSE TO THE SAME ASSESSEE HAS NOT PROVI DED ANY EVIDENCES IN SUPPORT OF HIS CLAIM AND IT IS FOUND T HAT IN THE INSTANT CASE EXACT PRACTICE HAS BEEN FOLLOWED AS IT WAS FOL LOWED IN THE CASE OF HIS BROTHER. HENCE, IT IS CLEARED THAT MISC. EXP ENSES SHOWN OF RS. 11,86,871/- IS NOTHING BUT THE INGENUINE TRANSACTIO NS OF THE F & O ITA NO.3138/AHD/2016 4 LOSS WHICH WAS NEVER OCCURRED IN ACTUAL. THEREFORE, RS. 11,86,871/- ON ACCOUNT OF INGENUINE F & O LOSS HAS BEEN DISALLO WED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEE DINGS U7S. 271(1)(C) R.W.S. 274 OF THE INCOME TAX ACT ARE INIT IATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME THEREBY CONCEALMEN T OF INCOME. 8. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 9. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT R EASONS RECORDED BY THE AO DID NOT SPELL OUT ANY SPECIFIC ISSUE WHIC H SUGGESTS ESCAPEMENT OF A PARTICULAR ITEM OF INCOME. THE AO HAS MADE REFERENCE WITH REGARD TO THE PROPERTY SOLD BY THE ASSESSEE. THUS, AN IMPRESSION CAN BE CONCLUDED FROM SUCH NARRATION THAT PROPER CA PITAL GAIN OUGHT NOT TO HAVE BEEN CALCULATED BY THE ASSESSEE. HOWEVER, THE LD.AO HAS NOT MADE ANY ADDITION ON ACCOUNT OF INCOME ESCAPED FOR SALE OF THE PROPERTY. ON THE STRENGTH OF HONBLE GUJARAT HIGH COURTS DECISION IN THE CASE OF CIT VS. MOHMED JUNED DADANI, 355 ITR 17 2 (GUJ) HE SUBMITTED THAT IF ANY ADDITION WAS NOT MADE ON AN I SSUE FOR WHICH ASSESSMENT WAS REOPENED, THEN NO OTHER ISSUE CAN BE ADJUDICATED BY THE AO. HE ALSO MADE REFERENCE TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. VS. CIT, 336 ITR 136 AND DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. JET AIRWAYS (I) LTD., 195 TAXMANN 177 (BOM). ON THE OT HER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORI TIES. 10. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE REASONS EXTRACT ED (SUPRA) WOULD INDICATE THAT THE LD.AO HAS NOT MADE OUT ANY SPECIF IC ISSUE ON WHICH IT CAN BE ASCERTAINED THAT THE INCOME HAS ESCAPED ASSE SSMENT. HE HAS JUST NARRATED FACTS WITH REGARD TO THE SALE OF PROP ERTY. THEREAFTER, HE HAS NARRATED FACT OF FILING OF THE RETURN. HE HAS NOWHERE MENTIONED WHICH INCOME OR UNDER WHICH HEAD INCOME HAS ESCAPED FROM ASSESSMENT. THE REASONS ARE TOTALLY VAGUE. HE HAS MADE ADDITION ON ACCOUNT OF MISC. EXPENSES CLAIMED BY THE ASSESSEE, BUT NO REFERENCE ITA NO.3138/AHD/2016 5 QUA THIS HEAD IS BEING MADE IN THE REASONS. THE HO NBLE JURISDICTIONAL HIGH COURT HAS CONCURRED WITH THE INTERPRETATION MA DE BY HONBLE BOMBAY HIGH COURT AND HONBLE DELHI HIGH COURT IN T HE CASE OF JET AIRWAYS (SUPRA) AND RANBAXY LABORATORIES (SUPRA). THE EXPRESSION AND ALSO EMPLOYED IN SECTION147 IS TO BE CONSTRUE D THAT IF AN ADDITION IS BEING MADE QUA AN ITEM OF INCOME FOR WHICH ASSESSMENT WAS REOPENED ONLY THEN ANY OTHER ADDITION COULD BE MADE , IF FOUND DURING THE COURSE OF REASSESSMENT PROCEEDINGS. IN OTHER W ORDS AND ALSO WOULD SUGGEST FIRST ADDITION WOULD BE MADE ON THE I TEM FOR WHICH ASSESSMENT HAS BEEN REOPENED. IN ADDITION TO THAT, IF ANY OTHER INCOME FOUND TO BE ESCAPED DURING RE-ASSESSMENT PROCEEDING S, THEN THAT INCOME WILL ALSO BE ADDED. IF NO ADDITION IS BEING MADE ON THE ITEM FOR WHICH ASSESSMENT WAS REOPENED, THEN NO OTHER ADDITI ON IS POSSIBLE. IN THE PRESENT CASE, FIRSTLY, WE ARE NOT SATISFIED THA T SUFFICIENT REASONS WERE EXISTING FOR REOPENING THE ASSESSMENT, BECAUSE , THE AO HAS NOT SPECIFIED WHICH INCOME HAS ESCAPED THE ASSESSMENT. EVEN IF FOR THE SAKE OF ARGUMENTS, IT IS ASSUMED THAT REFERENCE IS TO BE MADE TO SALE OF PROPERTY AS AN ITEM WHICH CAN BE SAID THAT INCOME H AS ESCAPED ASSESSMENT, THEN NO ADDITION WAS MADE ON THIS ITEM, THEREFORE, NO DISALLOWANCE OR ADDITION CAN BE MADE ON OTHER ISSUE S. RESPECTFULLY FOLLOWING JUDGMENT OF HONBLE JURISDICTIONAL HIGH C OURT, WE QUASH THE REASSESSMENT ORDER. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 15 TH JANUARY, 2019 AT AHMEDABAD. SD/- SD- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15/01/2019