VIJAY RAGHUNATH BIWALKAR, MUMBAI V. ASST CIT CIR 15(3), MUMBAI

ITA 4759/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2083 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 18-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 17-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIPUL K MODY
• Keywords: Capital receipt; Revenue expenditure
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.4759/M/2012 ASSESSMENT YEAR: 2007-08 MR. VIJAY RAGHUNATH BIWALKAR, B6/1/10 DOODHSAGAR CHS., CIBA ROAD, GOREGAON (EAST), MUMBAI 400 063 PAN: AAIPB 3804F VS. ACIT, CIRCLE 15(3), ROOM NO.122, 1 ST FLOOR, MATRU MANDIR, GRANT ROAD, MUMBAI - 400007 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NITESH JOSHI, A.R. & SHRI VIPU L K. MODY, A.R. REVENUE BY : MS. AMRITA SINGH, D.R. DATE OF HEARING : 20.08.2015 DATE OF PRONOUNCEMENT : 30.11.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 17.04.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2007-08. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER DISALL OWING BUSINESS LOSS OF RS.2,50,000/- ON SALE OF FRUITS. IT IS SUBMITTED THAT THE APPELLANT HAD FURNISHED FU LL AND COMPLETE DETAILS OF THE SALE AND PURCHASE OF FRUITS. HENCE, THERE IS NO REASON F OR THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) TO UPHOLD THE DISALLOWANCE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING ITA NO.4759/M/2012 MR. VIJAY RAGHUNATH BIWALKAR 2 THE ORDER OF THE ASSESSING OFFICER TREATING COMPENS ATION OF RS.1,42,000/- FOR ALTERNATE ACCOMMODATION AS REVENUE RECEIPT INSTEAD OF CAPITAL RECEIPT. IT IS SUBMITTED THAT THE AMOUNT RECEIVED ON THE ALT ERNATE ACCOMMODATION IS CAPITAL IN NATURE AND NOT EXIGIBLE TO TAX. THE CONCLUSION ARRIVED AT BY THE LEARNED COMMISSION ER OF INCOME-TAX (APPEALS) AND BY THE ASSESSING OFFICER IS ARBITRARY AND CONTRARY TO THE LAW. 3. THE APPELLANT RESERVES THE RIGHT TO ADD TO, ALTE R OR AMEND THE GROUNDS OF APPEAL. 3. GROUND NO.1 RELATES TO THE DISALLOWANCE OF BUSIN ESS LOSS OF RS.2,50,000/- ON SALE OF MANGOES. THE ASSESSEE PUR CHASED THE MANGOES FOR RS.8,50,000/- FROM ONE AVDHUT KALE. THE PAYMENT WA S MADE THROUGH CKEQUES/BANKING CHANNEL. THE ASSESSEE SOLD THE SAI D MANGOES TO M/S. JAIMEEL EXPORT FOR RS.6 LAKHS AND HENCE SUFFERED A LOSS OF RS.2,50,000/-. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) DISALLOWED THE SAID LOSS OBSERVING THAT THE ASSESSEE COULD NOT FILE THE NECE SSARY EVIDENCE/CONFIRMATIONS FROM THE PARTIES REGARDING THE SAID LOSS. DURING T HE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE FILED ADDITIONA L EVIDENCES UPON WHICH A REMAND REPORT WAS CALLED UPON FROM THE AO. THE AO ISSUED NOTICES UNDER SECTION SECTION 133(6) TO THE PARTY FROM WHICH THE MANGOES WERE PURCHASED AND ALSO TO THE PARTY TO WHOM THE MANGOES WERE SOLD . THE NOTICE ISSUED TO AVDHUT KALE FROM WHOM THE MANGOES WERE PURCHASED WAS RECEIVED B ACK UNSERVED. WHEREAS, THE NOTICE ISSUED TO M/S. JAIME EL EXPORT TO WHOM THE MANGOES WERE SOLD WAS SERVED BUT THE SAID PARTY DID NOT COMPLY WITH THE NOTICE. THE AO UNDER SUCH CIRCUMSTANCES REPORTED T HAT THE ADDITION IS TO BE CONFIRMED AND THE LD. CIT(A) ACTED ACCORDINGLY. 4. THE LD. A.R. HAS INVITED OUR ATTENTION TO THE BI LL-CUM-RECEIPT SAID TO BE ISSUED BY AVDHUT KALE STATING THAT HE HAD SOLD THE MANGOES TO THE ASSESSEE FOR ITA NO.4759/M/2012 MR. VIJAY RAGHUNATH BIWALKAR 3 A SUM OF RS.8,50,000/-. IT IS ADMITTED FACT ON THE FILE THAT THE PAYMENT OF RS.8,50,000/- WAS PAID BY THE ASSESSEE THROUGH DIFF ERENT CHEQUES FOR THE AMOUNT OF RS.4 LAKHS, RS.3 LAKHS AND RS.1.50 LAKHS RESPECTIVELY. THE LD. A.R. OF THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE IN VOICE ISSUED BY THE ASSESSEE TO M/S. JAIMEEL EXPORT FOR THE ABOVE SAID MANGOES F OR A LUMP SUM AMOUNT OF RS.9,25,000/-. THE LD. A.R. HAS FURTHER INVITED OU R ATTENTION TO THE LETTER DATED 15.07.06 ISSUED BY M/S. JAIMEEL EXPORT SHOWING THE PAYMENT OF RS.6 LAKHS BY WAY OF TWO DIFFERENT CHEQUES TO THE ASSESSEE. IT H AS ALSO BEEN MENTIONED THAT SINCE THERE WAS A DISCREPANCY FOUND IN THE QUALITY OF MANGOES, HENCE THE LESS PAYMENT WAS MADE TO THE ASSESSEE. WE FIND FROM THE RECORD THAT THE ASSESSEE HAS SUBMITTED THE DOCUMENTS WHICH HE WAS SUPPOSED T O SUBMIT TO PROVE THE LOSS IN MANGOES. MOREOVER, THE NATURE OF THE PRODU CT BEING PERISHABLE IN NATURE AND ALSO THE EXPORT OF WHICH DEPENDS UPON TH E VERY QUALITY/SPECIES OF THE MANGOES, IT IS QUITE PROBABLE THAT THE ASSESSEE MIGHT NOT HAVE RECEIVED THE BILLED AMOUNT AND HAD SUFFERED A LOSS OF RS.2,50,00 0/-. WE THEREFORE DO NOT FIND ANY JUSTIFICATION ON THE PART OF LOWER AUTHORI TIES IN REJECTING THE CLAIM OF LOSS OF THE ASSESSEE AND THE SAME IS THEREFORE SET ASIDE. 5. GROUND NO.2 IS RELATING TO THE TREATMENT OF COMP ENSATION OF RS.1,42,000/- RECEIVED BY THE ASSESSEE FOR ALTERNAT E ACCOMMODATION. ADMITTEDLY, THE SAID AMOUNT WAS RECEIVED BY THE ASS ESSEE ON ACCOUNT OF COMPENSATION FROM BUILDER WHO WAS RECONSTRUCTING TH E BUILDING OF THE SOCIETY WHERE THE ASSESSEE WAS A MEMBER. THE LOWER AUTHORI TIES HAVE TREATED THE SAME AS REVENUE EXPENDITURE ONLY ON THE GROUND THAT THE ASSESSEE HAD NOT USED THE SAID COMPENSATION FOR AN ALTERNATIVE ACCOMMODATION. WE ARE OF THE VIEW THAT IT IS NOT THE USE OF THE COMPENSATION AMOUNT BUT IT IS THE NATURE OF THE RECEIPT IN THE HANDS OF THE ASSESSEE WHICH, IN OUR VIEW, IS CA PITAL IN NATURE AND NOT A REVENUE NATURE. THIS GROUND IS ACCORDINGLY ALLOWED IN FAVOUR OF THE ASSESSEE. ITA NO.4759/M/2012 MR. VIJAY RAGHUNATH BIWALKAR 4 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2015. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.11.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.