AKSHAR AUTOMOBILE AGENCIES P.LTD, THANE V. ITO WD 3(2), THANE

ITA 4186/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1791 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 11-03-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 24-05-2013
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Keywords: Principle of natural justice; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAVISH SOOD , JM ITA NO. 4186 / MUM/20 1 3 ( ASSESSMENT YEAR : 2002 - 03 ) M/S. AKSHAR AUTOMOBILE AGENCIES PVT. LTD., PLOT NO.1, MOHAN GALI COMPOUND,GHODBUNDER ROAD, THANE 400607 VS. ITO WD 3(2) PAN/GIR NO. AABCA5019K APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI NEELKANTH KHANDELWAL REVENUE BY SHRI A RAMACHANDRAN DATE OF HEARING 08 / 11 /2016 DATE OF PRONOUNCEME NT 05 / 12 /2016 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2002 - 2003, IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. THERE WAS DELAY IN FILING THE APPEAL. 3. ASSESSEE HAS FILED APPLICATION FOR CONDONATION WHICH READS AS UNDER: - 1. THE PETITIONER COMPANY WAS CONSTITUTED AROUND 20 YEARS AGO. 2. THE AFFAIRS OF THE COMPANY AT THAT TIME W AS LOOKED AFTER BY THE FOLLOWING DIRECTORS: 1. LATE SADHURAM PATEL 2. SHRI MARKAND PATEL 3. SHRI YOGESH PATEL ITA NO. 4186 - 2013 M/S. AKSHAR AUTOMATIVE AGENCIES PVT. LTD., 2 3. LATE SHRI SADHURAM PATEL FATHER OF SHRI M ARKAND PATEL & SHRI YOGESH PATEL WAS LOOKING AFTER THE ACCOUNTING AND TAX M ATTER OF THE COMPANY SINCE INCEPTION AND OTHER DIRECTORS WERE LOOKING AFTER THE DAY TO DAY BUSINES S OF THE COMPANY. 4. LATE SHRI SADHURAM PATEL WHO WAS HANDLING ALL ACCOUNTING & TAXATION MATTER , SUDDENLY FALLEN SICK IN THE MONTH OF AUGUST 2010 DUE TO OLD AGE. THEN AFTER GRADUALLY HIS HEALTH DETERI ORA TED AND WAS TOTALLY BED RIDDEN. HE WAS BEING TREATED AT HOME ONLY UNDER THE SUPERVISION OF DOCTORS AND NURSES. 5. DUE TO HIS ILLNESS THE OTHER DIRECTORS WHO WERE HANDLING DAY TO DAY BUSINESS DID NOT PAY ANY HEED TO THE INCOME TAX MATTER AND ALSO ABOUT THE IMPUGNED ORDER. 6. THEN IN THE MONTH OF SEPTEMBE R 2012 THE CONDITION OF LATE SHRI SADHURAM PATEL BECAME VERY CRITICAL AND HE WAS ADMITTED IN HOSPITAL WHERE HE ULTIMATELY LEFT FOR HEAVEN ABODE ON 01 110/2012. COPY OF DEATH CERTIFICATE ENCLOSED. 7. AFTER THE DEATH OF LATE SHRI SADHURAM PATEL 3 - 4 MONTHS PASSED IN RITUALS ETC. 8. THEN AFTER IN THE MONTH OF MARCH 2013 WHEN WE RECEIVED A SHOW CAUSE NOTICE ASKING THE APPELLANT TO SHOW AS TO WHY PENALTY SHOULD NOT BE IMPOSED U/S. 271 (1 )(C) IT CAME TO PETITIONER'S NOTICE THAT AGAINST THE ORDER HON'BLE CIT(A ) WHEREIN QUANTUM ADDITION HAS BEEN CONFIRMED NO SECOND APPEAL HAS BEEN FILED. 9. THEN AFTER IN THE MONTH OF APRIL 2013 THE PETITIONER COMPILED ALL THE PAPERS AND APPROACHED M/S. MOHANLAL JAIN ET CO CHARTERED ACCOUNTANTS TO GO THROUGH THESE PAPERS AND AS KED TO APPRISE THE PETITIONER THE NEXT COURSE OF ACTION. 10.THE CHARTERED ACCOUNTANT AFTER PERUSING THE PAPERS BROUGHT TO OUR NOTICE THAT INADVERTENTLY APPEAL AGAINST THE ORDER OF CIT(A) HAS NOT BEEN FILED WHICH SHOULD HAVE BEEN FILED BY 22 / 08 / 2010. ACCO RDINGLY THE PETITIONER ASKED THE CHARTERED ACCOUNTANTS TO PREPARE AND FILE THE APPEAL. 11.LN THE MEAN TIME THE CHARTERED ACCOUNTANT SHRI MOHANLAL JAIN WHO WAS LOOKING AFTER THE IMPUGNED MATTER HAD TO GO OUT IN CONNECTION WITH SOME PROFESSIONAL MATTERS, T HEREFORE THEY COULD BE ABLE TO PREPARE THE MEMORANDUM OF APPEAL IN FORM NO. 36 IN THE SECOND WEEK OF MAY 2013. ACCORDINGLY THEY SENT THE PAPERS TO THE PETITIONER FOR SIGNING AND PAYMENT OF FILING FEES. ITA NO. 4186 - 2013 M/S. AKSHAR AUTOMATIVE AGENCIES PVT. LTD., 3 12. AFTER RECEIPT OF THESE PAPERS THE PETITIONER PA ID THE FILING FEES ON . 13.AS THERE HAS BEEN DELAY IN FILING OF THIS APPEAL THE PETITIONER ARE MAKING THIS APPLICATION FOR CONDONATION OF DELAY IN FILING OF THIS APPEAL. 14.THE PETITIONER SUBMIT AND REQUEST THAT THE DELAY IN FILING OF THIS APPEAL BE CO NDONED. THE LAPSE ON THE PART OF THE PETITIONER IN NOT FILING THIS APPEAL WITHIN STIPULATED PERIOD WAS UNINTENTIONAL AND ENTIRELY DUE TO INADVERTENCE AND ALSO DUE TO UNAVOIDABLE CIRCUMSTANCES MENTIONED HEREINABOVE. IN VIEW OF THE ABOVE FACTS AND CIRCUMST ANCES YOUR HONOUR WILL APPRECIATE AND ADMIT THAT THE PETITIONER HAS BEEN PREVENTED FROM FILING THE IMPUGNED APPEAL WITHIN THE TIME STIPULATED UNDER THE BONAFIDE FACTS AND THEREFORE REQUEST THAT KEEPING THE PRINCIPLES OF NATURAL JUSTICE IN MIND THE SAME MAY KINDLY BE CONDONED. THE PETITIONER THEREFORE REQUEST YOUR HONOUR TO TAKE A LENIENT VIEW IN THE MATTER AND CONDONE THE DELAY IN FILING OF THE PRESENT APPEAL, ADMIT, DECIDE THE SAME ON MERIT AND OBLIGE. FOR THE SAID KIND ACT THE PETITIONER SHALL ALWAYS BE GRATEFUL TO YOUR HONOUR. 4 . WE HAVE GONE THROUGH THE REASONS FOR DELAY IN FILING THE APPEAL AND FOUND THAT THERE WAS SUFFICIENT CAUSE FOR DELAY, ACCORDINGLY, WE CONDONE THE DELAY AND APPEAL IS BEING HEARD ON MERIT IN THE SUBSTANTIAL INTEREST OF JUSTICE. 5 . THE ONLY GRIEVANCE OF ASSESSEE RELATES TO ADDITION OF RS.33,45,603/ - U/S.68 IN RESPECT OF LOAN RECEIVED FROM DIRECTORS. 6 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 7 . FACTS IN BRIEF ARE THAT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS TRADI NG AND SERVICE OF MOTOR VEHICLES. DURING THE YEAR UNDER CONSIDERATION, IT RECEIVED LOAN OF RS.33,45,603/ - FROM ITS DIRECTORS. AO ITA NO. 4186 - 2013 M/S. AKSHAR AUTOMATIVE AGENCIES PVT. LTD., 4 ADDED THE SAME U/S.68 WHICH WAS CONFIRMED BY CIT(A) AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 8 . WE HAVE CONSIDERED RIVAL C ONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD WE FOUND THAT THE SAID LOAN WAS GIVEN BY THE DIRECTORS OF THE COMPANY WHO ARE FAMILY MEMBERS. IN THIS RESPECT, THE DIRECTORS OF THE COMPANY APPROACHED VARIOUS BANKS FOR TEMPORARY WORKING CAPITAL WHICH IN TERMS OF AUTOMOBILE TRADE IS KNOWN AS TRADE ADVANCE BY VIRTUE OF WHICH NBFC AND BANKS CAN HAVE THEIR OWN STOCK WITH THE DEALER AND DELIVERED THE VEHICLES TO THE CUSTOMERS ON IMMEDIATE BASIS AS SOON AS THE LOAN IS SANC TIONED. THIS TRADE ADVANCE IN THE ASSESSMENT YEAR UNDER CONSIDERATION HAS REFLECTED AS A DIRECTORS LOAN TO THE TUNE OF RS.33,45,603/ - . WE ALSO FOUND THAT DIRECTORS WERE OWING PREMISES AT THANE GORBUNDER ROAD FROM WHERE THEY WERE CONDUCTING THEIR BUSINESS F ROM WHICH THEY WERE ALSO FETCHING RENT OF RS.4 LAKHS PER MONTH. 9 . WE FOUND THAT ASSESSEE HAS DISCHARGED ITS PRIMARY ON US NOT ONLY ON IDENTITY AND CREDITWORTHINESS OF LENDERS BUT ALSO GENUINENESS OF TRANSACTION . UNDER THESE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT FOR THE ADDITION MADE IN RESPECT OF LOAN OF RS.33,45,603/ - OBTAINED FROM THE DIRECTORS OF THE COMPANY. 1 0 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 05 / 12 /2016 S D/ - ( RAVIS H SOOD ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 05 / 12 /201 6 KARUNA SR. PS ITA NO. 4186 - 2013 M/S. AKSHAR AUTOMATIVE AGENCIES PVT. LTD., 5 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//