Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 3585 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 11 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-05-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
E
Next Hearing Date
18-05-2016
Assessment Year
2008-2009
Appeal Filed On
24-06-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SANJAY ARORA , A M AND SHRI PAWAN SINGH, JM ./ I.T.A. NO. 4849/MUM/2013 ( / ASSESSMENT YEAR: 2008 - 09 ) LATE SURES H M. P AREKH THROUGH LEGAL HEIR SMT. BHAVNA SURESH PAREKH (WIFE) A/002, A - WING, SHIV SAGAR PALACE, PLOT NO. 68, TILAK NAGAR, CHEMBUR, MUMBAI - 400 089 / VS. ITO - 13(3)(1), MUMBAI ./ ./ PAN/GIR NO. AAWPP 6687 L ( / APP ELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI MOHD. RIZWAN / DATE OF HEARING : 18.5.2016 / DATE OF PRONOUNCEMENT : 31 .5.2016 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 24 , MUMBAI (CIT(A) FOR SHORT) DATED 21.3.2013 , DISMISSING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09 VIDE ORDER DATED 16.12.2010. 2 ITA NO. 4849/MUM/2013 (A.Y. 2008 - 09) LATE SURESH M. PAREKH VS. ITO 2. NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE APPELLANT WHEN HER APPEAL WAS CALLED OUT FOR HEARING, NOR IS THERE ANY ADJOURNMENT APPLIC ATION ON RECORD. T HIS , DESPITE SERVICE OF NOTICE OF HEARING IN - AS - MUCH AS THE SAME, SENT PER REGISTERED POST (RPAD) , HAS NOT BEEN RECEIVED BACK UNSERVED. EVEN ON THE LAST TWO DAT ES AS WELL, I.E., TO WHICH DATES THE HEARING WAS ADJOURNED, BEING 09.11.2015 A ND 21.4.2015, NONE HAD APPEARED ON BEHALF OF THE ASSESSEE EVEN AS SHE HAS APPOINTED A LEGAL REPRESENTATIVE TO REPRESENT HER. UNDER THE CIRCUMSTANCES, IT IS ONLY CONSIDERED PROPER TO PROCEED WITH THE HEARING OF THE APPEAL AND DISPOSE THE SAME AFTER HEARING THE RESPONDENT. 3. AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE (DR), THAT THE IMPUGNED ORDER IS ALSO AN EX PARTE ORDER, I.E., QUA THE ASSESSEE - APPELLANT. THE LD. CIT(A) WAS CONSTRAINED TO PASS SUCH AN ORDER IN VIEW OF THE SEVERAL OPPORTUNITIES FOR HEARING (ELEVEN IN NUMBER), NONE RESPONDED (OR RESPONDED TO BY SEEKING ANOTHER DATE OF HEARING ) TO BY THE ASSESSEE (FROM 25.10.2011 TO 18.3.2013), A S NOTED BY HIM AT PARA 4 OF ITS ORDER. FURTHER, T HE LD. DR WOULD DRAW OUR A TTENTION TO PARA 4.2 OF THE IMPUGNED ORDER WHEREBY THE LD. CIT(A) STATES THAT IN VIEW OF THE ASSESSEE NOT FURNISHING ANY FURTHER INFORMATION OR ADVANCING ANY ARGUMENT, I.E., ABSENCE OF ADDITIONAL INFORMATION AVAILABLE ON RECORD IN SUPPORT OF HER CASE, HE W AS CONSTRAINED TO CONCUR WITH THE ASSESSING OFFICER (A.O.). 4. WE HAVE HEARD THE PART Y BEFORE US, AND PERUSED THE MATERIAL ON RECORD. EVEN AS OBSERVED DURING HEARING, WE ARE NOT INCLINED TO AGREE WITH THE LD. CIT(A) ; THE ASSESSEE MAY NOT HAVE FURNISHED AN Y FURTHER INFORMATION, B UT HER CASE DESERVES TO BE DECIDED ON MERITS , AND SHOULD NOT CONS TRAIN THE APPELLATE AUTHORITY TO TAKE A VIEW IN THE MATTER NECESSARILY IN AGREEMENT WITH THAT BY THE ASSESSING AUTHORITY. THAT IS, HE IS OBLIGED TO DECIDE THE APPEAL O N MERITS, OF - COURSE ON THE BASIS OF THE INFORMATION AND THE MATERIAL ON RECORD. WE , ACCORDINGLY, TAKE EACH OF THE NINE ADDITIONS/DISALLOWANCES BEING IMPUGNED BY THE ASSESSEE PER HER GROUNDS OF APPEAL, AS NOTED AT PARA 4.1 OF THE IMPUGNED ORDER, SEPARATELY , AS FOLLOWS: 3 ITA NO. 4849/MUM/2013 (A.Y. 2008 - 09) LATE SURESH M. PAREKH VS. ITO 4.1 IT IS SEEN FROM THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE THAT THERE ARE AS MANY AS 11 GROUNDS OF APPEAL FILED OBJECTING TO THE ASSESSMENT MADE BY THE ASSESSING OFFICER. THE ADDITIONS MADE BY THE ASSESSING OFFICER HAVE BEEN DISCUSSED I N THE ASSESSMENT ORDER FROM PARA NO. 3 TO 6 OF THE ASSESSMENT ORDER. AS MENTIONED EARLIER, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE OR HIS AUTHORIZED REPRESENTATIVE HAD FILED ONLY PARTIAL INFORMATION IN RESPONSE TO THE QUERIES RAISED BY THE ASSESSIN G OFFICER. CONSIDERING THE SUBMISSIONS MADE AND ARGUMENTS ADVANCED AT THE TIME OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS MADE THE FOLLOWING ADDITIONS: - A) OUT OF TRANSPORTATION, C & F CHARGES & WARE HOUSING CHARGES RS.4,30,385 B) OUT OF TRAVELLIN G RS. 78,513 C) OUT OF TELEPHONE RS. 21,728 D) U/S. 14A R.W.R. 8D RS. 22,402 E) CAR LOAN INTEREST RS. 61,130 F) CAR DEPRECIATION RS.1,28,432 G) OUT OF MOTOR CAR EXPS. RS. 6,860 H) LTCG TREATED AS INCOME FROM OTHER SOURCES AS DISCUSSED IN PARA 5 RS.1,20,000 RS.8,69,450 A ) DISALLOWANCE U/S.40(A)(IA) - RS.4,30,385/ - : THE SAID DISALLOWANCE IS ON ACCOUNT OF ( NON ) DEDUCTION OF TAX AT SOURCE (TDS) ON CONTRACTUAL PAYMENTS, WHICH THE ASSESSEE WAS OBLIGED TO U/S. 194C OF THE ACT, AS LISTED A T PARA 3 OF THE ASSESSMENT ORDER. THE NON - DEDUCTION OF TAX AT SOURCE IS NOT IN DISPUTE. SO, HOWEVER, THE HONBLE DELHI HIGH COURT IN CIT V S . ANSAL LANDMARK TOWNSHIP PVT LTD [(2015) 377 ITR 635 ( DELHI ) , HAS CLARIFIED THAT THE AMENDMENT BY WAY OF INSERTION O F SECOND PROVISO TO SECTION 40(A)(IA) BY FINANCE ACT, 2012 W.E.F. 01.4.2013 IS CLARIFICATORY AND , THUS , RETROSPECTIVE IN NATURE. THE SAME BEARS REFERENCE TO THE FIRST PROVISO TO SECTION 201(1), ALSO INSERTED BY FINANCE ACT, 2012, W.E.F. 01.7.2012, WHICH TH EREFORE IS ALSO TO BE READ RETROSPECTIVELY. SECTION 201 DEALS WITH THE CONSEQUEN C E OF THE FAILURE TO DEDUCT OR TO PAY TAX , WITH THE RELEVANT PROVISION PROVIDING FOR THE SATISFACTION OF THE CERTAIN CONDITIONS BY THE ASSESSEE WHEREBY IT, DESPITE HAVIN G NOT D EDUCTED THE WHOLE OR PART OF ANY TAX SHALL NOT DEEMED TO BE IN 4 ITA NO. 4849/MUM/2013 (A.Y. 2008 - 09) LATE SURESH M. PAREKH VS. ITO DEFAULT, I.E ., PROVIDES FOR AN EXCEPTION, TO WHICH, AS AFORE - STATED , REFERENCE IS MADE IN TO SECTION 40(A)(IA). THE T RIBUNAL, AS IN THE CASE OF MAHINDRA NAVISTAR AUTOMOTIVES LIMITED VS. DY. CIT ( IN ITA NO S. 3324 & 4645/MUM/2013 DATED 13.5.2016) HAS CONSIDERED THE SAID AMENDMENT AS BEING ONLY AN A TTEMPT BY THE L EGISLATURE TO OPERATION ALIZE AND IMPLEMENT THE DECISION BY THE HONBLE APEX COURT IN HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS . CIT [200 7] 293 ITR 226 (SC) , WHEREBY IT STANDS HELD THAT TDS BEING ONLY ONE OF THE MODES FOR PAYMENT OF TAX, AND WHICH DOES NOT IN ANY MANNER DETRACT FROM THE L IABILITY TO TAX OF THE DEDUCTEE - PAYEE, WHERE THE SAME (TAX) HAS BEEN PAID BY HIM (PAYEE) I T SHA LL OPERAT E TO SAVE THE ASSESSEE - PAYER FROM DEDUCTING THE SAME OR FOR BEIN G CONSIDERED IN DEFAULT FOR THAT REASON. WE , ACCORDINGLY , ONLY CONSIDER IT FIT AND PROPER UNDER THE CIRCUMSTANCES THAT IN VIEW OF THE FOREGOING, THE MATTER WITH REGARD TO TH E DISALLOWANCE U/S . 40(A)(IA) TO BE RESTORED BACK TO THE FILE OF THE A.O. TO ALLOW AN OPPORTUNITY TO MEET ITS CASE WITH REFERENCE TO THE AMENDED LAW. THE A.O. SHALL DECIDE THE SAME QUA EACH SEPARATE DEFAULT OF THE ASSESSEE IN COMPLYING WITH TH E PROVISION OF CHAPTER VII - B, I .E., QUA EACH PAYER SEPARATELY, BY ISSUING THE DEFINITE FINDINGS OF FACT , PER A SPEAKING ORDER. B) DISALLOWANCE OF TRAVEL EXPENDITURE RS. 78,5 13/ - T HE SAME WERE DISALLOWED IN THE ABSENCE OF THE ASSESSEE FURNISH ING VOUCHERS FOR THE SAME , SO THAT THE A.O . ALLOWED THE EXPENDITURE, CLAIMED AT RS.1,92,541/ - , TO THE EXTENT THE VOUCHERS WERE PRODUCED. THE ASS ESSEE HAS ALSO NOT FURNISHED ANY EXPLANATION TOWARDS NON - FURNISHING OF THE VOUCHERS. UNDER THE CIRCUMSTANCES, WE CONFIRM THE DISALLOWANCE. C) D ISALLOWAN CE OF TELEPHONE EXPENDITURE AND MOTOR CAR EXPENDITURE AT RS.21,728/ - AND RS.6,860/ - RESPECTIVELY. THE SAME WERE DISALLOWED AT 1/5 TH OF THE EXPENDITURE CLAIMED IN - AS - MUCH AS THE PERSONAL USER OF THE SAID ASSETS COULD NOT BE DENIED. WE FIND NO INFIRMITY THER EIN AND, ACCORDINGLY, CONFIRM THE SAME. 5 ITA NO. 4849/MUM/2013 (A.Y. 2008 - 09) LATE SURESH M. PAREKH VS. ITO D) DISALLOWANCE U/S.14A RS.22,402/ - THE SAME HAS BEEN MADE APPLYING RULE 8D IN RESPECT OF THE ASSESSEES EXEMPT INCOME AT RS.8,40,297/ - . THE ASSESSEE S ONLY EXPLANATION WITH REGARD THERETO IS THAT THE DISALLOWANC E QUA INTEREST COMPO NENT (RS.1,30,072/ - ) BE NOT MADE IN - AS - MUCH AS THE ASSESSEE HAS NOT PAID ANY INTEREST. THIS WAS CONSIDERED AS NOT ACCEPTABLE IN - AS - MUCH AS THE ASSESSEE HAD PAID INTEREST TO A F I RM IN WHICH HE IS A PAR T NER. WE FIND NO MERIT IN THE ASSESS EE ARGUMENT IN - AS - MUCH AS THE FIRM AND THE PARTNER ARE SEPARATE PERSONS, WITH THE INTEREST PAID BY ONE TO ANOTHER BEING TAXABLE. WE , ACCORDINGLY , CONFIRM THE DISALLOWANCE. E) CAR LOAN INTEREST (RS.61,130/ - ) AND DEPRECIATION THEREON (RS.1,28,432/ - ) T HE S AME WERE DISALLOWED AS CAR HAD NOT BEEN SHOW N AS A BUSINESS ASSET BY THE ASSESSEE. I N OUR VIEW, IF THE OWNERSHIP OF THE CA R IS NOT IN DISPUTE, THE CAR EXPENSES HAVING BEEN ALREADY ALLOWED BY THE A.O. , SO THAT THE USER FOR BUSINESS PURPOSES IS ACCEPTED, THE RE IS NO QUESTION O F DISALLOWANCE OF INTEREST ON CAR LOAN OR DEPRECIATION ON CAR , SAVE TO THE EXTENT OF 1/5 TH , I.E., TO WHICH EXTENT THE REVENUE CONSIDERS ITS USER AS BEING FOR PERSONAL OR FOR OTHER THA N BUSINESS PURPOSE S . WE, ACCORDINGLY, ONLY CONSIDER IT PROPER THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O. TO ALLOW THE ASSESSEE ONE FINA L OPPORTUNITY TO PRESENT HER CASE WITH REGARD TO THE OWNERSHIP OF THE CAR, WHICH APPEARS TO BE SO IN - AS - MUCH AS SHE HAS ALSO AVAIL ED A CAR LOAN FOR THE SAME. WE MAY THOUGH CLARIFY THAT THE ONUS TO PROVE HER CA S E WOULD BE SQUARELY ON THE ASSESSEE, AND FOR WHICH THE A.O. SHALL BE OBLIGED TO G IVE HER A REASONABLE OPPORTUNITY , DECIDING PER A SPEAKI NG ORDER IN ACCORDANCE WITH LAW. WE DECIDE ACCORDINGLY. F) L ONG TERM CAPITAL GAIN (L TCG ) , RETURNED AT RS. ( - ) 2,45,125/ - , ASSESSED A S INCOME FROM OTHER SOURCE U/S. 56 AT RS.1,20,000/ - . THE ASSESSEES CLAIM ARISES, AS STATED BY HER REPRESENTATIVE, ON ACCOUNT OF RECEIPT OF RS.5 LACS FROM THE SELLER ON THE REDEMPTION OF ADVANCE PAID T HERETO FOR PURCHASE OF FLAT IN 1995 - 19 96 AT RS.3,80,000/ - . THE ASSESSEE TREATING IT AS A CAPITAL 6 ITA NO. 4849/MUM/2013 (A.Y. 2008 - 09) LATE SURESH M. PAREKH VS. ITO ASSET CLAIMED IN DEXATION B ENEFIT THEREO N, RESULTING IN T H E SAID LOSS , W HICH WAS REJECTED BY THE A.O. IN - AS - MUCH AS THE ASSESSEE HAD ITSELF SHOW N THE AMOUNT PAID AS AN ADVANCE AND , FURTHER , NOT ENTERED INTO IN AGREEMENT (FOR THE PURCHASE OF FLAT). IT IS RATHER INCONCEIVABLE THAT AN AMOUNT IS PAID TOWARD BOOKING OF A RESIDENTIAL UNIT WITHOUT ANY WRITTEN DOCUMENT, BEAR ING EXPLICIT STIPULATIONS WITH REGARD TO VARIOUS ASPECTS, VIZ. PERIOD FOR WHICH IT IS VALID; THE TOTAL COST OF THE FLAT ALONG WITH PAYMENT PLAN; THE CON STRUCTION SPECIFICATIONS AS WELL AS BY WHEN IT WOULD BE COMPLETE, ETC. W HAT D OES THE RECEIPT STATE? THE PAYMENT OF RS.3.80 LACS DURING 1995 - 96 AS BEING FOR THE PURCHASE OF A FLAT , AND THE RECEIPT OF RS.5 LACS FROM THE RECIPIENT OF THE ADVANCE WOULD IN ANY CASE NEED TO BE ESTABLISHED BY THE ASSESSEE AS A FACT. HOW DID THE ASSESSEE AND THE BUILDER REFLECT THE SAME IN THE IR BOOKS OF ACCOUNT ON THE PAYMEN T/RECEIPT IN 1995 - 96 WOULD BE VERY RELEVANT? THE ADVANCE, WHERE SO, CARR IES CERTAIN RIGHTS THEREWITH, AND WHERE NO T LAPSING BY TIME, IS A SUBSISTING CAPITAL ASSET. WE, ACCORDINGLY, AGREE WITH THE ASSESSEE IN PRINCIPLE , WHO THOUGH WOULD HAVE TO SUBSTANTIATE HER CASE. SUBJECT TO THE SAME , WE ALLOW THE ASSESSEES CLAIM, I.E., IN PRINCIPLE. WE DECIDE ACCORDINGLY , AN D THE A.O. SHALL DECIDE AS PER LAW , PER A SPEAKING ORDER , ISSUING DEFINITE FINDINGS OF FACT, TAKING OUR FINDINGS/OBSERVATIONS INTO AC COUNT AND ALLOWING A REASONA BLE OPPORTUNITY OF HEARING TO THE ASSESSEE . 5. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 31 , 201 6 SD/ - SD/ - ( PAWAN SI NGH ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 31 . 0 5 .201 6 . . ./ ROSHANI , SR. PS 7 ITA NO. 4849/MUM/2013 (A.Y. 2008 - 09) LATE SURESH M. PAREKH VS. ITO / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
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