KUMAR ISHWARLAL DOSHI, Mumbai V. ITO, 18(2)(2), Mumbai

ITA 554/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5322 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOMNATH WAJALE
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, M UMBAI BEFORE SHRI SHAMIM YAHYA, AM ITA NO. 554/MUM/2019 (ASSESSMENT YEAR: 2014-15) KUMAR ISHWARLAL DOSHI 259, JOHARI MANSION, 2 ND FLOOR, KALBADEVI ROAD, MUMBAI-400 002 VS. ITO 18(2)(2), MUMBAI PAN/GIR NO. ADXPD 0393 H ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : SHRI SOMNATH WAJALE DATE OF HEARING : 07.10.2020 DATE OF PRONOUNCEMENT : 07.10.2020 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-53, MUMBAI DATED 07.12.2018 AND PERTAINS TO THE ASSESSM ENT YEAR (A.Y. FOR SHORT) 2014-15. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL) ERRE D IN UPHOLDING THE ADDITION OF RS.1,96,853/- MADE BY THE ASSESSING OFF ICER UNDER SECTION 41(1) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A TRADER IN CLOTH. DURING THE COURSE OF ASSESSMENT, THE A.O. NOTED THAT A SUM OF RS.1,96,85 3/- IS LYING AS SUNDRY CREDITORS AND THAT 3 YEARS HAVE ELAPSED. THE A.O. ISSUED NOTICE U /S.133(6) TO THE SAID CREDITOR. THE SAME REMAINED UNSERVED. THE A.O. PROCEEDED TO HOLD THAT THERE IS A CESSATION OF LIABILITY IN TERMS OF SECTION 41(1) OF THE ACT. ACCORDINGLY, HE PROCEEDED TO ADD THE AFORESAID SUNDRY CREDITORS AS INCOME OF THE ASSESSEE. 4. UPON THE ASSESSEES APPEAL, THE LD. CIT(A) UPHEL D THE ORDER OF THE A.O. 2 ITA NO. 554/MUM/2019 KUMAR ISHWARLAL DOSHI VS. ITO 5. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BE FORE THE ITAT. 6. NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE DESPITE NOTICE SENT. HENCE, I PROCEEDED TO ADJUDICATE THE ISSUE BY HEARING THE LD . DEPARTMENTAL REPRESENTATIVE AND PERUSING THE RECORDS. I NOTE THAT THE ASSESSEE IS T RADER IN CLOTH. THE ASSESSEES SALES AND PURCHASES HAVE NOT BEEN DOUBTED. JUST BECAUSE A SUN DRY CREDITORS IS OUTSTANDING FOR MORE THAN 3 YEARS, THERE IS NO PRESUMPTION IN INCOME TAX LAW THAT THE SAME AMOUNTS TO CESSATION OF LIABILITY U/S.41(1) AUTOMATICALLY. IT IS NOTED THAT THE A.O. HAS NOT EVEN ISSUED SUMMONS U/S.131(1) TO THE SAID SUNDRY CREDITORS. HE NCE, IN MY CONSIDERED OPINION, IN THE ABSENCE OF PROPER INVESTIGATION THE AMOUNT INVOLVED IS NOT LIABLE TO THE ADDED U/S.41(1) SIMPLY BECAUSE THE SAME IS OVER 3 YEARS OLD. ACCORD INGLY, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD ON 07.10.20 20 SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI; DATED : 07.10.2020 ROSHANI , SR. PS 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 FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI