PIYUSH MADHANI, MUMBAI V. DCIT CC 44, MUMBAI

ITA 4213/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8144 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 09-03-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2016
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Search and seizure; Salary income; Condonation of delay
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES , C MUMBAI , , , BEFORE SHRI JOGINDER SINGH, J UDICIAL M EMBER, A ND SHRI MANOJ KUMAR AGGARWAL , A CCOUNTANT M EMBER ITA NO . 4210/MUM/2016 TO 4213/MUM/2016 ASSESSMENT YEAR: 20 09 - 10 TO 2012 - 13 SHRI PIYUSH MADHANI, 201/A, SAURBH CHS, SHAHAJI RAJE MARG, VILE PARLE (E), MUMBAI 400 057 / VS. DCIT CC 44, MUMBAI ( /ASSESSEE) ( / REVENUE) PAN. NO . AAMP0211H / DATE OF HEARING: 09/03/2017 / DATE OF ORDER : 14/03/2017 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) ALL THESE FOUR APPEALS FOR A.Y.2009 - 10 TO 2012 - 13 ARE BY THE ASSESSEE, CHALLENGING THE IMPUGNED ORDERS OF THE LEARNED FIRST APPELLATE AUTHORITY ALL DATED 28/03/2016 CONFIRMING THE INCOME FROM OTHER SOURC ES, AMOUNTING TO / ASSESSEE BY SHRI SANJAY R. PARIKH / REVENUE BY M/S. SUNITA BILLA ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 2 RS.2,65,545/ - , RS.22,89,583/ - , RS.14,57,150/ - AND RS.3,58,100/ - , RESPECTIVELY. 2. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE ALSO INVITED OUR ATTENTION THAT ALL THE APPEALS ARE TIME BARRED BY 24 DAYS. IT WAS REQUESTED THAT THE DELAY M AY BE CONDONED. THE LEARNED COUNSEL ALSO EXPLAINED THE CIRCUMSTANCES WHICH CAUSED DELAY. 2.1. ON THE OTHER HAND, T HE LEARNED CIT(DR) OPPOSED THE CONDONATION OF DELAY BY CONTENDING THAT DELAY OF EACH DAY HAS TO BE EXPLAINED BY THE ASSESSEE, MEANING THEREBY IT MAY NOT BE CONDONED. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SO FAR AS, CONDONATION OF DELAY IS CONCERNED, THE ASSESSEE HAS EXPLAINED THE REASONS WHICH LED TO DELAY IN FILING THE APPEAL BEFORE THIS T RIBUNAL. CONSIDERING THE REASONS OF DELAY , EXPLAINED BEFORE US , N O DOUBT FILING OF AN APPEAL IS A RIGHT GRANTED UNDER THE STATUTE TO THE ASSESSEE AND IS NOT AN AUTOMATIC PRIVILEGE, THEREFORE, THE ASSESSEE IS EXPECTED TO BE VIGILANT IN ADHERING TO THE MANN ER AND MODE IN WHICH THE APPEALS ARE TO BE FILED IN TERMS OF THE RELEVANT PROVISIONS OF THE ACT. NEVERTHELESS, A LIBERAL APPROACH HAS TO BE ADOPTED BY THE APPELLATE AUTHORITIES, WHERE DELAY HAS OCCURRED FOR BONA - FIDE REASONS ON THE PART OF THE ASSESSEE OR THE REVENUE IN FILING THE APPEALS. IN MATTERS CONCERNING THE FILING OF APPEALS, IN EXERCISE OF THE STATUTORY RIGHT, A ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 3 REFUSAL TO CONDONED THE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE THRESHOLD, WHICH MAY LEAD TO MISCARRIAGE OF JUST ICE. THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE IN JUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 2.3. THE HONBLE APEX COURT IN A CELEBRATED DECISION IN COLLECTOR, LAND ACQ UISITION VS MST. KATIJI & ORS. 167 ITR 471 OPINED THAT WHEN TECHNICAL CONSIDERATION AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, THE COURTS ARE EXPECTED TO FURTHER THE CAUSE OF SUBSTANTIAL JUSTICE. THIS IS FOR THE REASON THAT AN OPPOSING PARTY, IN A DISPUTE, CANNOT HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. THEREFORE, IT FOLLOWS THAT WHILE CONSIDERING MATTERS RELATING TO THE CONDONATION OF DELAY, JUDICIOUS AND LIBERAL APPROACH IS TO BE ADOPTED. IF SUFFICIENT CAUSE IS FOUND TO EXIST, WHICH IS BONA - FIDE ONE, AND NOT DUE TO NEGLIGENCE OF THE ASSESSEE, THE DELAY NEEDS TO CONDONED IN SUCH CASES. THE EXPRESSION SUFFICIENT CAUSE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY LAW IN A MEANINGFUL MANNER, WHICH SUB - SERVES THE END OF JUSTICE - THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF THE COURTS. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. T HE HONBLE APEX COURT IN VEDABHAI VS SANTARAM 253 ITR 798 OBSERVED THAT INORDINATE DELAY CALLS OF CAUTIOUS APPROACH. ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 4 THIS MEANS THAT THERE SHOULD BE NO MALA FIDE OR DILATORY TACTICS. SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTION TO ADVANCE SUBSTAN TIAL JUSTICE. THE HONBLE APEX COURT IN 167 ITR 471 OBSERVED AS UNDER: - 3. THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES B Y DISPOSING OF MATTERS ON DE MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE OF THE EXI STENCE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHERS COURTS IN THE HIERARCH Y. 2.4. FURTHERMORE, THE HON'BLE SUPREME COURT IN THE CASE OF VEDABAI ALIA VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL 253 ITR 798 HELD THAT THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONST RUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. THE COURT HELD THAT THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTION. ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 5 2.5. THE DECISION OF THE TRIBUNAL IN PEOPLE INFOC OM PRIVATE LTD. V/S CIT (ITA NO.210/MUM/2013) ORDER DATED 19/05/2016, M/S NEUTRON SERVICES CENTRE PVT. LTD VS ITO (ITA NO.1180/MUM/2012) ORDER DATED 18/02/2016, SHRI SAIDATTA COOP - . CREDIT SOCIETY LTD. V/S ITO (ITA NO.2379/MUM/2015) ORDER DATED 15/01/2016 AND MR. NIKUNJ BAROT (PROP. ENIGMA) VS ITO (ITA NO.4887/MUM/2015) ORDER DATED 06/01/2016, WHEREIN, SUBSTANTIAL DELAY WAS CONDONED, SUPPORTS THE CASE OF THE PRESENT ASSESSEE. HAVING MADE THE AFORESAID OBSERVATION AND VARIOUS DECISIONS DISCUSSED HEREINABOV E, INCLUDING FROM HONBLE APEX COURT, THE CIRCUMSTANCES NARRATED BY THE ASSESSEE, WHEREIN, HE HAS STATED THE REASONS WHICH CAUSED THE DELAY, THEREFORE, THE DELAY IS CONDONED. 3 . DURING HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI SANJAY R PARIKH EX PLAINED THAT THE ASSESSEE FILED THE RETURN U/S.139 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), ON THE AMOUNT AS DISCUSSED FOR THE RESPECTIVE APPEAL. IT WAS EXPLAINED THAT PAYMENTS HAVE BEEN MADE BY THE ASSESSEE TO CERTAIN TEXTILE PARTIES AND THERE I S ALSO A CASH DEPOSIT WHICH WAS ADDED U/S.68 OF THE ACT. THE TOTAL ADDITION WAS EXPLAINED TO BE MADE , APPROXIMATELY AMOUNTING TO RS.43,70,378/ - . IT WAS CONTENDED THAT THE ENTIRE CREDIT HAS BEEN ADDED U/S.68 OF THE ACT BY THE ASSESSING OFFICER. 4 . ON THE O THER HAND, THE LEARNED CIT(DR) MS. SUNITA BILLA DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER AND ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 6 CONFIRMED BY THE LEARNED CIT(A) BY EXPLAINING THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS CO ST UPON HIM. 5 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL, DECLARED INCOME OF RS.1,15,705/ - U/S.139 OF THE ACT (FOR A.Y.2009 - 10). THE INCOME OF THE ASSESSEE WAS CONSISTING OF SALARY INCOME, BUSINESS INCOME, CAPITAL GAINS AND ALSO INCOME FROM OTHER SOURCES. A SEARCH AND SEIZURE ACTION U/S. 132(1) OF THE ACT WAS CARRIED OUT AT THE RESIDENCE AND OFFICE PREMISES OF BUCON GROUP BY THE DEPARTMENT ON 15/11/2011 . IN RESPONSE TO NOTICE U/S.153A OF THE ACT, THE ASSESSEE DECLAR ED INCOME OF RS.1,69,847/ - ON 18/02/2014. SUBSEQUENTLY NOTICE U/S.143(2) DATED 18/02/2014 WAS ISSUED / SERVED UPON THE ASSESSEE TO WHICH THE ASSESSEE ATTENDED THE PROCEEDINGS. THE LEARNED ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.153A R.W.S. 143(3) OF THE ACT ON 18/03/2014 ASSESSING THE INCOME AT RS.5,17,390/ - . 5 .1 . LIKEWISE FOR A.Y.2010 - 11, THE ASSESSEE DECLARED INCOME OF RS.3,53,630/ - U/S.139 OF THE ACT. PURSUANT TO NOTICE U/S.153A OF THE ACT, THE ASSESSEE DECLARED INCOME OF RS.5,34,300/ - . DURING THE COURSE OF ASSESSMENT, THE ASSESSEE FILED REVISED COMPUTATION OF INCOME ON ACCOUNT OF NET PROFIT FROM M/S. NIDHI APPARELS. THE ASSESSEE OFFERED 5% OF THE SALE PROCEEDS DEPOSITED IN THE BANK ACCOUNT WHEREIN THE AMOUNT OF RS.26,20,282/ - WAS FOUND TO BE DEPOS ITED. THE ASSESSEE OFFERED 5% OF RS.26,50,000/ - ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 7 (ROUNDED OF) WHICH COM ES TO RS.1,32,500/ - TO TAX U/S. 44AF OF THE ACT IN THE REVISED COMPUTATION. THE FINAL ASSESSMENT WAS COMPLETED AT THE INCOME OF RS.31,54,380/ - U/S.153A R.W.S. 143(3) OF THE ACT. THE LEARNE D ASSESSING OFFICER HELD THAT THE CASH WAS UNEXPLAINED CREDIT AND THUS, THE ADDITION WAS MADE U/S.68 OF THE ACT. 5 .2. FOR A.Y.2011 - 12, THE ASSESSEE DECLARED INCOME OF RS.2,20,640/ - U/S.139 OF THE ACT. SUBSEQUENTLY IN RESPONSE TO NOTICE U/S.153A, THE ASSES SEE DECLARED INCOME OF RS.2,18,294/ - . REVISE COMPUTATION OF INCOME WAS FILED BY THE ASSESSEE WHEREIN THE ASSESSEE OFFERED 8% OF THE SALE PROCEEDS DEPOSITED IN THE BANK ACCOUNT AMOUNTING TO RS.15,03,650/ - . THIS AMOUNT WAS OFFERED TO TAX U/S.44AD OF THE ACT. THE ASSESSING OFFICER ASSESSED THE INCOME AT RS.17,21,944/ - AS AGAINST THE REVISE COMPUTATION OF RS.3,42,294/ - . THUS, THE TOTAL ADDITION WAS RS.13,79,650/ - (GROSS RECEIPT OF RS.15,03,650/ - MINUS 1,24,000/ - ) . ON APPEAL, THE LEARNED CIT(A) PARTLY DELETED TH E ADDITION TO THE TUNE OF RS.46,500/ - . 5 .3. LIKEWISE FOR A.Y.2012 - 13, THE ASSESSEE DECLARED INCOME OF RS.6,10,449/ - U/S.139 OF THE ACT ON 31/08/2012. SUBSEQUENTLY, PURSUANT TO NOTICE U/S.143(2) THE ASSESSEE OFFERED 8% OF THE SALE PROCEEDS DEPOSITED IN THE BANK ACCOUNT AMOUNTING TO RS.3,58,100/ - . HOWEVER, THE ASSESSMENT WAS COMPLETED U/S.143(3), ASSESSING THE INCOME AT RS.19,73,300/ - . ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITION TO THE TUNE OF RS.10,00,000/ - . ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 8 6. UNDER THE AFOREMENTIONED FACTS, WE FIND THAT THE ENTIRE CREDIT HAS BEEN ADDED BY THE LEARNED ASSESSING OFFICER U/S.68 OF THE ACT. THOUGH, THE LEARNED CIT(A) HAS GRANTED SOME PART RELIEF TO THE ASSESSEE, BUT FACT REMAINS THAT THE PAYMENTS HAVE BEEN MADE BY THE ASSES SEE TO CERTAIN TEXTILE PARTIES, THEREFORE, THE FACTS HAS NOT BEEN APPRECIATED IN A JUSTIFIED MANNER, CONSEQUENTLY, T O PUT AN END TO THE LITIGATION, WE ARE OF THE VIEW THAT IT WILL MEET THE ENDS OF JUSTICE IF THE TOTAL ADDITION IS RESTRICTED TO 25% OF THE CASH DEPOSITED BY THE ASSESSEE I N HIS BANK ACCOUNT. THE SAME IS WORKED OUT IN THE FOLLOWING MANNER: - A Y AMOUNT OF DEPOSIT IN THE BANK ACCOUNT EXTENT OF ADDITION ADDITION SUSTAINED BY US (RS.) 2009 - 10 347545/ - 25% 86886/ - 2010 - 11 2620082/ - 25% 655020/ - 2011 - 12 1503650/ - 25% 375913/ - 2 012 - 13 358100/ - 25% 89525/ - TOTAL 4829377/ - 1207344/ - IT IS WORTH MENTIONING HERE THAT THE ASSESSEE HAS AGREED TO THE ABOVE CONCLUSION / ADDITION . THUS, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. FINALLY, THE APPEALS OF THE ASSESSEE ARE PARTLY ALL OWED. ITA NO. 4210 - 4213/MUM/2016 MR. PIYUSH MADHANI 9 TH IS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CO NCLUSION OF THE HEARING ON 09 / 03 /2017. S D/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL M EMBER MUMBAI; DATED : 14 /0 3 /2017 KARUNA , SR. P.S/. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. / THE RESPONDENT. 3. ( ) / THE CIT , MUMBAI. 4. / CIT(A) - , MUMBAI , 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI