MOHAMMEDALI A SHAIKH, MUMBAI V. ITO 13(2)(1), MUMBAI

ITA 5137/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9029 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Unexplained cash credit; Business income; Salary income; Additional evidence; Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

1 ITA 5137/MUM/2014 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.5137/MUM/2014 (ASSESSMENT YEAR 2009-10) MOHAMMEDALI A SHAIKH 32/33, EASTERN CHAMBERS, 128/A, NANDLAL JANI MARG, POON STREET, MUMBAI-9 PAN : ALNPS9956P VS THE ITO 13(2(1), MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI PRAKASH G JHUNJHUNWALA RESPONDENT BY SHRI SUMAN KUMAR DATE OF HEARING 27-09-2017 DATE OF PRONOUNCEMENT 11-10-2017 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)- 24, MUMBAI DATED 27-03-2014 AND IT PERTAINS TO AY 2 009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1) A HUMBLE PRAYER IS MADE TO CONDONE THE DELAY OF 15 DAYS IN FILING THE APPEAL BEING CAUSED UNDER BONAFIDE RE ASON AND COMPELLING CIRCUMSTANCES BEYOND CONTROL OF THE APPELLANT. 2) ON THE FACTS & THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S 2 ITA 5137/MUM/2014 ERRED IN ADDING A SUM OF RS. 65,36,850/- BEING EXPE NSES INCURRED BY THE APPELLANT ON BEHALF OF THE COMPANY WITHOUT CONSIDERING THE FACTS OF THE CASE THAT THE SAME HAS ALREADY BEEN CONSIDERED IN THE BOOKS OF ACCOUNT OF THE COMPANY. 3) A) ON THE FACTS & THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN TREATING THE RENT INCOME AS INCOME FROM HO USE PROPERTY WHILE THE APPELLANT WAS DOING THE BUSINESS OF RENTING OF SHOPS AND COMMERCIAL PREMISES IN THE COMPLEX. B) ON THE FACTS & THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN DISALLOWING THE ACTUAL EXPENSES INCURRED FOR EAR NING THE RENTAL INCOME. 4) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN ADDING A SUM OF RS. 2,70,838/- BEING CASH DEPOSITED IN BANK WITHOUT CONSIDERING THE FACTS OF THE CASE. 5) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN DISALLOWING A SUM OF RS. 1,50,000/- ON ADHOC BAS IS WITHOUT CONSIDERING THE FACTS OF THE CASE.' 2. AT THE TIME OF HEARING, THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THERE IS A DELAY OF 55 DAYS IN FILING APPEAL BEFORE THE TRIBUN AL FOR WHICH THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY ALONG WIT H AFFIDAVIT EXPLAINING REASONS FOR DELAY IN FILING APPEAL. THE ASSESSEE FURTHER S UBMITTED THAT THE ASSESSEE WAS UNDER JUDICIAL CUSTODY AT ARTHUR ROAD JAIL FOR ALLE GEDLY INVOLVED IN CRIMINAL CONSPIRACY OF PROVIDING SHELTER TO A CRIMINAL AND W AS ARRESTED ON 21-09-2010 3 ITA 5137/MUM/2014 AND KEPT IN JAIL TILL HE WAS ACQUITTED BY HONBLE J UDGE OF GREATER MUMBAI, MOCA COURT ON 21-03-2015. THEREFORE, THE ASSESSEE COULD NOT BE ABLE TO FILE APPEAL IMMEDIATELY ON RECEIPT OF APPELLATE ORDER FR OM THE CIT(A) ON 15-04- 2014. THERE IS A REASONABLE CAUSE IN NOT FILING TH E APPEAL WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT, THEREFORE, THE DELAY MAY BE CONDONED AND APPEAL MAY BE DISPOSED OF ON MERITS. THE LD.DR, ON THE OT HER HAND, STRONGLY OPPOSED THE CONDONATION PETITION FILED BY THE ASSESSEE TO A RGUE THAT THE REASONS ADDUCED BY THE ASSESSEE FOR CONDONATION OF DELAY IN FILING APPEAL IS NOT IN ACCORDANCE WITH LAW. THEREFORE, THE DELAY IN FILIN G APPEAL SHALL NOT BE CONDONED. 3. HAVING HEARD BOTH THE SIDES AND CONSIDERED THE MATE RIAL ON RECORD WE FIND THAT THE ASSESSEE WAS UNDER JUDICIAL CUSTODY B ETWEEN 21-09-2010 TO 20- 03-2015 IN A CRIMINAL CASE AND HE WAS ACQUITTED BY A COMPETENT COURT ON 20- 03-2015 FOR WHICH THE ASSESSEE HAS FILED COPY OF CO URTS ORDER. WE FURTHER OBSERVE THAT THE CIT(A) HAS PASSED HIS ORDER ON 7-0 3-2014 WHICH WAS SERVED ON THE ASSESSEE ON 15-04-2014 AND DURING THAT TIME, TH E ASSESSEE WAS IN JUDICIAL CUSTODY, THEREFORE, COULD NOT FILE APPEAL IN TIME. THEREFORE, CONSIDERING THE FACTS AND ALSO THE REASONS FOR NOT FILING THE APPEA L, WE ARE OF THE VIEW THAT APPEAL NEEDS TO BE CONDONED IN THE INTEREST OF JUST ICE; HENCE, WE CONDONE DELAY IN FILING THE APPEAL AND ADMIT THE APPEAL FOR ADJUDICATION. 4 ITA 5137/MUM/2014 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL DERIVING INCOME FROM SALARY AND INCOME FROM BUSINESS, FILED HIS RETURN OF INCOME FOR AY 2009-2010 ON 17-03-2010 DECLARING TOTAL INCOME AT R S.8,62,840. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) AND 142 (1) OF THE ACT ALONG WITH QUESTIONNAIRE CALLING FOR VARIOUS DETAILS WERE ISSU ED. IN RESPONSE, SHRI HAROON M.A. SHAIKH, SON OF THE ASSESSEE APPEARED AND FURNI SHED THE DETAILS AS CALLED FOR. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 30-12-2011 DETERMINING TOTAL INCOME AT RS.85,25,193 INTER ALIA MAKING ADDI TIONS TOWARDS INCOME FROM HOUSE PROPERTY, BUSINESS INCOME, CASH RECEIVED TREA TED AS INCOME. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APP EAL BEFORE THE CIT(A). 5. BEFORE CIT(A), THE ASSESSEE NEITHER APPEARED NOR FI LED ANY DETAILS ON VARIOUS DATES OF HEARING. THEREFORE, THE CIT(A) PA SSED EXPARTE ORDER AND PARTLY ALLOWED APPEAL FILED BY THE ASSESSEE, WHEREIN HE CO NFIRMED ADDITIONS MADE BY THE AO TOWARDS CASH RECEIPTS, BUSINESS INCOME OF CY CLE SHOP AND UNEXPLAINED CREDITS IN BANK ACCOUNT, HOWEVER, PARTLY ALLOWED RE LIEF TOWARDS INCOME FROM HOUSE PROPERTY BY ALLOWING STANDARD DEDUCTION AGAIN ST INCOME FROM HOUSE PROPERTY. AGGRIEVED BY THE ORDER OF CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 6. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE CIT(A ) HAS PASSED EXPARTE ORDER BEHIND THE BACK OF THE ASSESSEE WITHOUT AFFOR DING REASONABLE OPPORTUNITY OF HEARING. THE LD.AR FURTHER SUBMITTE D THAT AS STATED IN THE 5 ITA 5137/MUM/2014 PETITION FOR CONDONATION OF APPEAL, THE ASSESSEE WA S UNDER JUDICIAL CUSTODY BETWEEN 21-09-2010 TO 20-03-2015 BECAUSE OF WHICH A SSESSEE WAS NOT ABLE TO APPEAR BEFORE THE AO TO SUBSTANTIATE HIS CASE AND W AS NOT ABLE TO FILE NECESSARY EVIDENCES BEFORE THE CIT(A) TO JUSTIFY HI S CASE. THEREFORE, THE CASE MAY BE SET ASIDE TO THE FILE OF THE AO TO GIVE ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE TO FURNISH CERTAIN EVIDENCES. 7. THE LD.DR, ON THE OTHER HAND, STRONGLY SUPPORTED TH E ORDER OF THE CIT(A) AND SUBMITTED THAT THE CIT(A) HAS GIVEN MORE THAN 1 5 DATES OF HEARTING TO THE ASSESSEE TO FILE DETAILS, HOWEVER, THE ASSESSEE CO ULD NOT FILE ANY EVIDENCE TO JUSTIFY HIS CASE. THEREFORE, THE ORDER OF THE CIT( A) SHOULD BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIAL AV AILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE FACTS WITH REGARD TO THE ASSESSEES JUDICIAL CUSTODY BETWEEN 2010-2015 WAS N OT DISPUTED BY THE LOWER AUTHORITIES. THE CIT(A), THOUGH HAS GIVEN NUMBER O F HEARINGS, THE ASSESSEE COULD NOT ATTEND THE HEARING FOR THE REASONS BEYOND HIS CONTROL. NO DOUBT, THE ASSESSEE HAS TO APPEAR BEFORE THE AUTHORITIES IF HE IS INTERESTED IN PROSECUTING HIS APPEAL AND FILE NECESSARY EVIDENCE TO JUSTIFY H IS CASE. IN THIS CASE, THE REASONS QUOTED BY THE ASSESSEE FOR NOT APPEARING BE FORE CIT(A), IS NO DOUBT BEYOND HIS CONTROL. BEFORE US, THE ASSESSEE HAS FI LED A PAPER BOOK WHICH CONTAINS VARIOUS DETAILS AND CONTENDED THAT THESE E VIDENCES WERE NOT BEFORE 6 ITA 5137/MUM/2014 THE AO AS WELL AS THE CIT(A). THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE RE-EXAMINED BY THE AO IN THE LIGH T OF THE FACT THAT THE ASSESSEE WAS NOT ABLE TO APPEAR DURING THE ASSESSME NT PROCEEDINGS AND APPELLATE PROCEEDINGS AND ALSO ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. HENCE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO AND DIRECT HIM TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF ADDITIONAL EVIDENC E FILED BY THE ASSESSEE, AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED, FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH OCTOBER, 2017. SD/- SD/- (D.T.GARASIA) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 17 TH OCTOBER, 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI