Shri Nirav Dilipkumar Desai, Ahmedabad V. ITO, Ward-5(2)(4), Ahmedabad

MA 112/AHD/2022

AI Insights

The case involves Shri Nirav Dilipkumar Desai, the appellant, who filed a Miscellaneous Application against the order of the Income Tax Appellate Tribunal dated 11.11.2022. The dispute centered on the addition of Rs. 3,244,095 to the assessee's income, which was a write-back of a personal loan liability from Mr. Rasik C Patel. The assessee argued that this write-back should not be considered income as it was never allowed as a deduction in any earlier year, and thus, should not be taxable under the Income Tax Act. The Tribunal's earlier decision had not explicitly addressed this additional ground, leading to the filing of the Miscellaneous Application.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129861 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-02-2023
• Appeal Filed By: Assessee
• Order Result: DismissedDismissed
• Bench Allotted: SMC
• Next Hearing Date: 19-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 12-12-2022
• Laws Referred To: Income-tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

M.A. No.112/Ahd/2022 (In ITA No.185/Ahd/2019) Assessment Year: 2015-16 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER M.A. No.112/Ahd/2022 (In ITA No.185/Ahd/2019) Assessment Year: 2015-16 Shri Nirav Dilipkumar Desai, vs. The Income Tax Officer, 42, Swati Society, Ward – 5(2)(4), Ahmedabad. St. Xavier’s School, Ahmedabad – 380 009. [PAN – ACEPM 6168 R] (Appellant) (Respondent) Assessee by : Shri Deepak Shah, AR Revenue by : Ms. Leena Lal, Sr. DR Date of hearing : 20.01.2023 Date of pronouncement : 08.02.2023 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This Miscellaneous Application is filed by the Assessee in respect of order dated 11.11.2022 passed by the Tribunal. 2. The Ld. AR submitted that additional ground was raised by the assessee but the same was not adjudicated at the time of disposal of the appeal. The Ld. AR filed synopsis of the submission which is as follows :- “The Applicant submits that due to inadvertence, the Hon’ble Tribunal erred in deciding the additional ground raised before it as canvassed in the miscellaneous application itself and also due to following facts. (i) The appellant has challenged the order of AO in making addition of Rs.3244095 being the sum credited to P& L account by way of write back of liability due to one Mr. Rasik C Patel. It was a unilateral transfer of liability as the said person was not traceable. M.A. No.112/Ahd/2022 (In ITA No.185/Ahd/2019) Assessment Year: 2015-16 Page 2 of 3 (ii) It was contended that such unilateral write back does not amount to income under any provision of law. It is the contention that only under the provision of income-tax Act, such write back can be considered as income which is either u/s 41(1) or s. 59. The said section will apply only if in earlier year such liability was allowed as deduction in respect of loss, expenditure or trading liability. Since such liability was by way of personal loan taken from him and which was never allowed as loss, expenditure or trading liability, the same cannot be considered as income under the act.' (iii) Ld. Tribunal in para 3 noted that additional ground was raised. It also noted the arguments in para 6 that the assessee has taken personal loan from Rasik C Patel. However, in para 8 of the order, Ld. Tribunal erred in holding that "and was never shown as debts and liabilities by the assessee in the previous year". The attention is drawn to paper book page no.102,103 and 104 being the account of said Rasik Patel in our books of accounts for year ending 31.03.2003 till 31.03.2015. Attention is also drawn to page no. 122 of the paper book being the balance sheet of the assessee as on 31.03.2013 wherein under the head Loans (Liability) the amount due to said Rasik Patel is shown to be Rs.3244095. It is conclusively proved that said amount was shown as liability in all the earlier year. Thus this is mistake apparent on record. ; (iv) Since the amount is a personal loan taken in earlier year which is now written back being never allowed as loss, expenditure or trading liability, the same cannot be considered as income even though the same is written back in P & L account. In absence of any enabling provision of law of income-tax, the same cannot be considered as income. (v) Since, the order is inadvertently not in consonance with the submissions given at the time of hearing, and in law, the same amounts to a mistake apparent on record requiring interference u/s. 254 of the act.” 3. The Ld. DR relied upon the order of the Tribunal and submitted that the assessee is seeking review of the order dated 11.11.2022. 4. Heard both the parties and perused all the relevant material available on record. The Ld. AR pointed out that the additional ground was not adjudicated at the time of passing of order dated 11.11.20212, but from the perusal of the order, it can be seen that the summary of the Circular has been taken into account. The finding given in paragraph no.8 is composite finding for additional ground as well as for the grounds mentioned in paragraph no.2 of the said order. Merely not giving ground-wise remark does not amount to non-adjudication of the additional ground. In fact, the additional ground is in consonance with the main grounds in respect of personal loan taken by M.A. No.112/Ahd/2022 (In ITA No.185/Ahd/2019) Assessment Year: 2015-16 Page 3 of 3 the assessee in the year 1999 and the said circular has given a relief to those assessees where there is mistakes in treating certain income wrongly in the details of return of income, but in the present case the assessee has shown return in respect of old dues not payable as income from other sources. This was not a mistake. In fact, the assessee has pointed out page no.122 related to Balance Sheet of previous years and the same is also reflecting in the finding though the page number is not mentioned. Thus, all the contentions of the assessee/Ld. AR was taken into account and, therefore, there is no mistake apparent on record. Hence, the present Miscellaneous Application is dismissed. 5. In the result, Miscellaneous Application is dismissed. Order pronounced in the open Court on this 8 th day of February, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 8 th day of February, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad