SAGARMAL SOHANLAL JAIN, THANE V. ITO WARD 3(4), KALYAN

ITA 506/MUM/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1035 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-06-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 04-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Section: 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM ITA No. 506/Mu m/2024 (Assess ment Yea r: 2012-13) Sagar mal Sohanlal Jain, Shop No.6, Omkar Societ y, M. G. ro ad , Op p. R a ilw a y S ta ti on , Do mbivli ( West), Thane, Mu mbai-421201 Vs. ITO Wa rd 3(4) IT Ashar Pa rk, Ro ad No.16Z, 6 th Floor, Waghale Estate, Thane, Mu mbai-400604 (Appellant) (Respondent) PAN No. AATPJ4675K Assessee by : S h r i N . A . K u l k a r n i , A R Revenue by : S h r i R . R . M a k w a n a , D R D a t e o f h e a r i n g : 1 0 . 0 6 . 2 0 2 4 Date of pronouncement : 0 9 . 0 7. 2 0 24 O R D E R PER PRASHANT MAHARISHI, AM: 01. ITA No. 506/Mum/2024, is filed by Sagarmal Sohanlal Jain, against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)], dated 19 th January, 2024, for A.Y. 2012-13, wherein the appeal filed by the assessee against the assessment order passed under Section 143(2) of the Income-tax Act, 1961 (the Act) dated 17 th March, 2015, by the Income Tax Officer, Ward 3(4), Kalyan, was dismissed. 02. The assessee aggrieved with that has preferred the appeal raising following grounds :- Page | 2 ITA No. 506/Mum/2024 Sagarmal Sahanlal Jain; A.Y. 2012-13 “1. The order passed by the CIT (A) confirming the addition of A.O., passed the order without giving the thought of our reply placed before them as well as reliance placed before them. Thus, not maintainable for want of justice, be quashed and required to delete the confirmed addition by the Assessing Officer not to be sustained. 2. The CIT (A) not minutely gone through the order passed by the Assessing Officer and the grounds of appeal placed before him, thus, his observations cannot be considered. 3. the grounds placed under Section 69D, 271E, 271(1)(c) and the application placed under Section 154 before the Assessing Officer though on his record not considered. Thus, his order not maintainable, even the CIT (A) not considered our submissions in this context physically placed before them. 4. Thus requested to set aside both the orders before the eyes of law as the matter be decided on merit with judicial view before your honor.” 03. The brief facts of the case shows that the assessee is an individual proprietor M/s Roop Sangam Jewelers filed its return of income on 15 th March, 2013 at a total income of ₹14,22,320/-. This was revised on 2 nd January, 2014, at a total income of ₹15,34,320/-. The business of the assessee is selling of gold and gold jewellery in his proprietary ship concern. The return of income was picked up for scrutiny and under Section 143(2) of the Income- Page | 3 ITA No. 506/Mum/2024 Sagarmal Sahanlal Jain; A.Y. 2012-13 tax Act, 1961 (the Act) notice was issued on 27 th September, 2013. 04. The learned Assessing Officer found that assessee has repaid loan of ₹12,04,971/- in cash to Smt. Sapana Jain and Smt. Sukhidevi Jain. He applied the provisions of Section 69D of the Act and considered it to be deemed income of the assessee. 05. The second issue, it was found that the revision of return made by the assessee was to show the income under the Act income from house property. The assessee in original return of income has shown income from house property of ₹4,62,000/-, however, in the revised return same was shown at ₹5,74,000/-. This return was revised after the issue of notice under Section 143(2) of the Act on 27 th September, 2013. The return was revised on 2 nd January, 2014. Thus, the learned Assessing Officer held that the assessee has taken undue advantage of revision of return by disclosing more of 1,12,000/-. He made the addition of the above sum. At the time of passing of the order under Section 143(3) of the Act, he ignored revised return filed by the assessee disclosing income of ₹15,34,320/- but started the computation of total income in the assessment order by taking the income offered in the original return of income of ₹14,22,320/-. He made the addition of ₹12,04,971/- and ₹1,12,000/- and by order passed under Section 143(3) of the Act dated 17 th March, 2015, assessed the total income of ₹27,39,291/-. Page | 4 ITA No. 506/Mum/2024 Sagarmal Sahanlal Jain; A.Y. 2012-13 06. Assessee preferred the appeal before the learned CIT (A) on the above two conditions. The learned CIT (A) noted that despite five notices issued to the assessee for hearing, assessee did not availed any opportunity accordingly, on the merits also repeating the observations of the learned Assessing Officer, he confirmed both the additions. Therefore, assessee is aggrieved and is in appeal before us. 07. The learned Authorized Representative submitted the detailed submissions in the appeal and reiterated the submissions. 08. The learned Departmental Representative supported the orders of the lower authorities. 09. We have carefully considered the rival contentions and perused the orders of the lower authorities. The first addition is with respect to the amount of loan repaid in cash by the assessee to two persons. The assessee has repaid ₹3,40,781/- to Smt. Sapana Jain in 20 tranches of small amounts. Similarly, Smt. Sukhidevi Jain was repaid ₹8 lacs in 8 tranches of ₹1 lac each. The learned Assessing Officer made the addition under Section 69D of the Act. 010. According to Section 69D of the Act, where assessee borrows amount on Hundi or any amount due thereon is repaid but any person otherwise than through an account payee cheque then such amount shall be deemed to be income of the assessee. It is clarified by the Central Board of Direct Taxes that borrowal on Hundi arises without a Page | 5 ITA No. 506/Mum/2024 Sagarmal Sahanlal Jain; A.Y. 2012-13 person getting money by execution of Hundi. In the present case, there is no evidence that there is any borrowal by the assessee on Hundi. The fact shows that both these loans were taken by the assessee in earlier years and the amount of loan are opening balances, both parties are wife and daughter of the assessee therefore, apparently in this case, the addition under Section 69D of the Act cannot be made. So far as the order of the learned CIT (A) is concerned, it is submitted that the learned CIT (A) was presented with physical documents before him earlier along with the return submissions which were neither considered nor even mentioned in the appellate order. Therefore, the order of the learned CIT (A) confirmed the addition is not sustainable. Further, the learned Assessing Officer has also not cared of looking into how the amounts of ₹12,04,971/- is arrived at in fact the amount tabulated by the learned Assessing Officer himself shows that it should be added ₹11 ,76,591/-. Further it is apparent that assessee has furnished the confirmation letter and statement of loan before the learned Assessing Officer during the assessment proceedings. In view of the above facts, we do not find any merit in the addition made by the learned Assessing Officer under Section 69D of the Act of the above sum. Accordingly, the addition under Section 69D of the Act of ₹12,04,971/- is directed to be deleted. 011. The second issue is with respect to the addition of ₹1,12,000/- which has already been offered to income by the assessee in the revised return filed and therefore, Page | 6 ITA No. 506/Mum/2024 Sagarmal Sahanlal Jain; A.Y. 2012-13 same cannot be added once again. Accordingly, the learned Assessing Officer directed to accept the return of income revised by the assessee on 2 nd January, 2014, for the computation of taxable income. Thus, the addition of ₹1,12,000/- is also deserves to be deleted. 012. In the result, both the additions are directed to be deleted and the orders of the lower authorities are reversed. 013. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 09.07. 2024. Sd/- (PRAS HANT M AHAR ISHI) (ACC OUNTANT MEMB ER) Mumbai, Dated: 09.07. 2024 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai