MATHSONS SECURITIES P. LTD, MUMBAI V. ITO 2(2)(3), MUMBAI

ITA 3437/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49246 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 23-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Principle of natural justice; Reasonable cause; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI T.R.SOOD (A. M) ITA NO.3437/MUM/2010(A.Y. 2006-07) M/S. MATHSONS SECURITIES PVT. LTD. SUITE NO. 3 &4, BOMBAY MUTUAL BUILDING, PM ROAD, FORT, MUMBAI 01. PAN : AAACM 1610R (APPELLANT) VS. THE ITO 2(2)(3), MUMBAI. (RESPONDENT) APPELLANT BY : SHRI RAHUL K. HAKANI RESPONDENT BY : SHRI JITENDRA YADAV ORDER PER N.V.VASUDEVAN, J.M, THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 2/2/2010 OF CIT(A) V, MUMBAI RELATING TO ASSESSMENT YEAR 2006-0 7. THE FIRST GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS FOLLOW: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORD ER PASSED BY THE ASSESSING OFFICER WITHOUT GIVING A REASONABLE OPPO RTUNITY OF BEING HEARD RESULTING IN VIOLATION OF NATURAL JUSTICE, HE NCE, THE ORDER PASSED BY THE CIT(A) MAY BE SET ASIDE. 2. THE LEARNED CIT(A), FAILED TO APPRECIATE THAT, A S THE APPELLANTS REPRESENTATIVE WAS BUSY IN HIGH COURT, COULD NOT AT TEND ON THE APPOINTED DATE OF HEARING ON 1/2/2010, HOWEVER, WHE N HE ATTENDED ON 2/2/2010 HE HAS INFORMED THAT THE APPEAL HAS BEE N DECIDED, AS THERE WAS REASONABLE CAUSE, EX-PARTE ORDER PASSED B Y THE CIT(A) MAY BE SET-ASIDE. 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MAKING INVESTMENT. FOR A.Y 2006-07 THE ASSESSEE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS.6,07,141/-. IN THE C OURSE OF ASSESSMENT ITA NO.3437/MUM/2010(A.Y. 2006-07) 2 PROCEEDINGS THE AO NOTICED THAT THE SOURCE OF INCOM E OF THE ASSESSEE WAS DIVIDEND AND INTEREST. THE AO WAS OF THE VIEW THAT THE DIVIDEND AND INTEREST HAVE TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHE R SOURCES IN VIEW OF THE PROVISIONS OF SEC.56 OF THE INCOME TAX ACT, 1961 (T HE ACT). AS A CONSEQUENCE THE AO WAS ALSO OF THE VIEW THAT THE EX PENSES DEBITED IN THE P&L ACCOUNT AMOUNTING TO RS.5,11,273/- CANNOT BE A LLOWED AS DEDUCTION UNDER SECTION 57(III) OF THE INCOME TAX ACT, 1961(T HE ACT). THE AO ALSO WAS OF THE VIEW THAT THERE WAS NO BUSINESS CARRIED ON B Y THE ASSESSEE DURING THE PREVIOUS YEAR. THE AO, THEREFORE, COMPUTED THE INC OME OF THE ASSESSEE AS FOLLOWS: (1) INCOME FROM HOUSE PROPERTY: RENT RECEIVED RS. 3,96,000/- LESS : U/S. 24(I) 30% OF ALV RS. 1,18,800/- RS. 2,77,200/- (2) INCOME FROM OTHER SOURCES: INTEREST INCOME RS. 4,89,778/- LESS; EXPENSES ALLOWABLE U/S.57(III) NIL (AS NONE OF THE EXPS. CLAIMED IS RELATED TO INTEREST INCOME) ________________ RS. 4,89,778/- (3) CAPITAL GAINS(STCG AS PER STATEMENT RS. 2,32,636/- ASSESSED TOTAL INCOME RS. 9,99,614/- ========== == 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED APPEAL BEFORE THE CIT(A). THE APPEAL BEFORE THE CIT(A) WAS FILED AFT ER A DELAY OF 12 DAYS. AN APPLICATION FOR CONDONATION OF DELAY WAS ALSO FILED WHEREIN IT WAS STATED THAT THE DIRECTOR ATTENDING THE MATTER WAS ABROAD WHEN T HE ORDER OF ASSESSMENT WAS PASSED AND THEREFORE, THERE WAS A DELAY IN FILI NG THE APPEAL. THE CIT(A) CONDONED THE DELAY IN FILING THE APPEAL. 4. THE APPEAL BEFORE CIT(A) HAD BEEN FIELD BY THE A SSESSEE ON 14/1/2009. THE FIRST NOTICE OF HEARING OF THE APPEAL DATED 20/ 5/2009 FIXING THE APPEAL ITA NO.3437/MUM/2010(A.Y. 2006-07) 3 FOR 8/6/2009 WAS ISSUED TO THE ASSESSEE. ON 8/6/20 09 THE CASE WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE. ANOTHER NOTICE DATED 10/12/2009 FIXING THE APPEAL FOR HEARING ON 1/1/2010 WAS ISSUE D TO THE ASSESSEE. THE ASSESSEE SOUGHT ADJOURNMENT AND THE CASE WAS ADJOUR NED TO 13/1/2010 ON WHICH DATE THE ASSESSEE SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 25/1/2010. ON 25.1.2010, NONE APPEARED ON BEHALF O F THE ASSESSEE AND IN THE CIRCUMSTANCES THE CIT(A) DECIDED THE APPEAL EX- PARTE. 5. BEFORE US, IT WAS SUBMITTED BY THE LD. COUNSEL F OR THE ASSESSEE THAT MR. JITENDRA SINGH, ADVOCATE WHO WAS ENGAGED IN THE PRO CEEDINGS BEFORE CIT(A) BY THE ASSESSEE, HAD TO ATTEND BEFORE THE HONBLE H IGH COURT ON 25/1/2010 AND, THEREFORE, COULD NOT ATTEND THE HEARING ON 25/ 1/2010 BEFORE THE CIT(A). WE FIND FROM THE RECORD THAT MR. JITENDRA SINGH HAS BEEN REGULARLY APPEARING BEFORE THE CIT(A) ON BEHALF OF THE ASSESS EE. WE ACCEPT THE STATEMENT OF THE LD. COUNSEL FOR THE ASSESSEE MADE ACROSS THE BAR. WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE CIT(A) TO DECIDE THE APPEAL ON MERITS AFRESH AFTER AFFORDING ASSESSEE OPPORTUNIT Y OF BEING HEARD. IN VIEW OF THE ABOVE THE OTHER GROUND WITH REGARD TO THE DI SALLOWANCE OF EXPENSES TO THE TUNE OF RS. 3,92,473/- RAISED IN GROUND NO.3 I S NOT BEING TAKEN UP FOR CONSIDERATION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH DAY OF JUNE, 2011. SD/- SD/- (T.R.SOOD ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED. 30TH JUNE.2011 ITA NO.3437/MUM/2010(A.Y. 2006-07) 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RH BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.3437/MUM/2010(A.Y. 2006-07) 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 23/6/11 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 23/6/11 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER