ITO 17 (1)(3), MUMBAI V. ESTATE OF LATE SHRI CHANDARAKANT MEHTA, MUMBAI

ITA 7198/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3702 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 22-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Bogus purchase; Tax effect; Set aside
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND PAVAN KUMAR GADALE , JM ITA NO. 7198/MUM/2019 (ASSESSMENT YEAR: 2011-12) ITO-17(1)(3) ROOM NO.110, 1 ST FLOOR KAUTILYA BHAVAN, BKC, BANDRA (E) MUMBAI-400 051 VS. ESTATE OF LATE SHRI CHANDRAKANT MAGANLAL MEHTA SHIV SHAHI BUILDING, 1 ST FLOOR ROOM NO.104, ZEST COMMERCIAL COMPLEX, MUMBAI-400 077 PAN/GIR NO. A AAPM8217F ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI VIJAY KUMAR MENON RESPONDENT BY : NONE DATE OF HEARING : 07.06.2021 DATE OF PRONOUNCEMENT : 07 .06.2021 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-55, MUMBAI (L D.CIT(A) FOR SHORT) DATED 30.08.2019 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y .) 2011-12. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THE ASSESSMENT ORDER AS VOID AB-INITIO, WHEN THE NOTICE U/S.148 WAS SERVED ON THE ASSESSEE BEFORE HIS DEMISE AND ON THE ADDRESSES PRO VIDED TO THE DEPARTMENT AS HELD BY THE APEX COURT IN THE CASE OF PCIT, MUMBAI VS. L-VEN IN TERNATIONAL LTD.' 2. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,06,276/-- MADE BY THE AO IN RESPECT OF BOGUS PURCHASES, EVEN IN ABSENCE OF ANY DETAILS BY THE ASSESSEE TO PROVE ITS GENUINENESS WITHOUT CONSIDERING THE FACT THAT THE AFORESAID ADDITION TO THE TOTAL INCOME OF THE A SSESSEE WAS MADE BY A.O. ON THE BASIS OF INFORMATION RECEIVED FROM THE AUTHORITATIVE EXTERNA L SOURCE I.E. MAHARASHTRA SALES TAX DEPARTMENT.' 3. 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT ( A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF AO BE RESTORED.' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER MADE AN ESTIMATED DISALLOWANCE FOR BOGUS PURCHASES DESPITE KNOWING TH AT ASSESSEE IS NO MORE. THE ASSESSING OFFICER DID NOT BRING THE LEGAL REPRESENT ATIVES ON RECORD. 2 7198/MUM/2019 4. UPON ASSESSEE APPEAL LD.CIT(A) DECIDED THE ISSU E IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- IN THIS CASE ASSESSMENT ORDER IS PASSED UNDER SECTI ON 144 OF THE I T ACT . THE ASSESSING OFFICER CONTENDS THAT NOTICE U/S 148 WAS SERVED BY AFFIXTURE AT THE LAST KNOWN ADDITION. IN THE SUBMISSION MADE BY THE ASSESSEE NOWHERE CLAIMS THAT CHANGE OF ADDRESS WAS EVER INTIMATED TO THE DEPARTMENT AND THEREFORE THIS NOTICE U/S 148 IS OTHERWISE A VALID NOTICE. HOWEVER IT IS FURTHER NOTICED FROM THE ASSESSMENT ORDER THE A/R OF THE AS SESSEE DULY INTIMATED THE ASSESSING OFFICER THAT ASSESSEE IS NO MORE AND THOUGH HE FILED RETURN OF INCOME HE WAS NOT AUTHORISED TO PLEAD THE CASE BEFORE THE ASSESSING OFFICER. THE ASSESSING OF FICER HAD TELEPHONIC CONVERSATION WITH BROTHER IN LAW OF THE DECEASED ASSESSEE AND SON OF THE BROTHER IN LAW BOTH OF WHOM INTIMATED THAT THEY WERE NOT AWARE OF THE BUSINESS DEALING OF THE ASSESSEE. THE ASSESSING OFFICER THEREAFTER ISSUED A FINAL NOTICE BY EMAIL TO THE A/ R OF THE ASSESSEE WHO AGAIN EXPRESSED HIS INABILITY TO GIVE ANY DETAILS. IN THE APPEAL MEMO I T HAS BEEN INTIMATED THAT ASSESSEE EXPIRED ON 21.07.20:15 AND THE APPEAL IS FILED BY HIS WIFE AND LEGAL HIGHER. CONSIDERING THE FACTS IT IS APPARENT THAT DESPITE H AVING COME TO KNOW THAT THE APPELLANT IS NO MORE , NOTICE WAS NOT SERVED ON THE LEGAL HIGHER. N O NOTICE CAN BE SERVED ON THE DECEASED ASSESSEE. FURTHER NOTICE SERVED OR ERSTWHILE ASSESS EE WHO DID NOT HAVE NECESSARY AUTHORITY SERVES NO PURPOSE. HENCE, IF NOTICE IS SERVED ON TH E LEGAL HIGHER IN THIS CASE THE ASSESSMENT IS VOID AND AB-INITIO. WITHOUT PREJUDICE IN THE DETAILS STATEMENT OF FACTS , IT IS SEEN THAT THE ALLEGED PURCHASES AND ITS CORRESPONDING SALES HAVE ALREADY BEEN ACCOUNTED FOR AND GROSS PROFIT AT THE RATE 3.7% HAS BEEN SHOWN ON THE TRANSACTION, THERE IS NO SUPPRESSION I N GROSS PROFIT ON TRANSACTIONS MADE AND THE AO HAS ADOPTED THE FIGURE OF INCOME FROM THE ORIGIN AL RETURN ONLY BESIDES ADDING THE ALLEGED PURCHASES. THEREFORE IN VIEW OF ABOVE DISCUSSION AN D FACTS NO ADDITION IS CALLED FOR. 5. AGAINST THIS ORDER REVENUE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRE SENTATIVE AND PERUSED THE RECORDS. AS CLEAR ABOVE, THE ASSESSMENT HAS BEEN FR AMED ON THE DEAD PERSON. HENCE, LD.CIT(A) HAS TAKEN THE CORRECT VIEW OF THE MATTER. FURTHERMORE, TAX EFFECT IN THIS CASE IS ALSO BELOW THE LIMIT BY CBDT FOR FILING APP EAL BEFORE THE ITAT. AS THE LD.CIT(A) HAS ALLOWED THE APPEAL, ON THE GROUND THA T IT IS FRAMED ON A DEAD PERSON. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LD.CIT(A). HENCE, WE UPHOLD ORDER OF LD.CIT(A). ASSESSEES APPEAL ON THE GROUND THAT ASSESSMENT IS FRAMED ON A DEAD PERSON. 7. IN THE RESULT, THIS APPEAL BY THE REVENUE STA NDS DISMISSED. 3 7198/MUM/2019 ORDER PRONOUNCED IN THE OP EN COURT ON 07.06.2021 SD/- SD/- (PAVAN KUMAR GADALE) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 07.06.2021 THIRUMALESH , 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