SHRI HASMUKHBHAI BACHUBHAI BARAIYA,SURENDRANAGAR V. THE DCIT, CIRCLE- 4 (1) (1), AHMEDABAD

ITA 685/RJT/2024

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The case involves Hasmukhbhai Bachubhai Bariya, a vegetable merchant, who appealed against the order of the Commissioner of Income Tax (Appeals) which confirmed the addition of Rs. 56,19,932 under section 57 of the Income Tax Act, 1961. The assessee had received interest on compulsory acquisition of rural agricultural land by Sardar Sarovar Narmada Nigam Limited, which was initially divided among 12 legal heirs but was later claimed solely by the assessee. The Income Tax Department had disallowed expenses claimed against this interest income, leading to the appeal. The CIT(A) had dismissed the initial appeal due to non-compliance with notices, which the assessee attributed to negligence. The Income Tax Appellate Tribunal, Rajkot, after hearing both parties, decided to remand the case back to the CIT(A) for a fresh examination, providing the assessee another opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708443 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV LD.
• Assessee Lawyers: RACHNA KHANDHAR; LD
• Keywords: Business income
• Section: 143(3); 142(1)

Judgement Text

"ITA No. 685/Rjt/2024 Hasmukhbhai Bachubhai Bariya Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, AM. & DINESH MOHAN SINHA, JM आयकरअपीलसं./ITA No.685/RJT/2024 Ǔनधा[रणवष[ / Assessment Year: (2016-17) (Hybrid Hearing) Hasmukhbhai Bachubhai Bariya, B M & Co, Old Vegetable Market, Surendranagar - 363001 Vs. DCIT Circle -4(1) (1), Aaykar Bhavan, Vejalpur, Ahmedabad - 380015 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ANSPB1144R (Appellant) (Respondent) Appellant by : Rachna Khandhar, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav Ld. SR. DR Date of Hearing : 05 / 05 /2025 Date of Pronouncement : 14 / 07 /2025 आदेश / O R D E R PER DINESH MOHAN SINHA JM; Captioned appeal filed by assessee pertaining to Assessment Year 2016-17 penalty, is directed against order passed by Commissioner of Income Tax (Appeal), vide order dated 30/01/2024, which in turn arises out of an order passed by the Assessing Officer dated 10/12/2018 u/s 143(3) of the Income Tax Act, 1961. ITA No. 685/Rjt/2024 Hasmukhbhai Bachubhai Bariya Page | 2 2. GROUNDS OF APPEALS:- 1) The Ld. CIT(A), NFAC, Delhi erred in passing the order u/s 250 of IT Act, 1961 by way of rejecting the appeal of the appellant. 2) The Ld. CIT(A), NFAC, Delhi erred in confirming the addition of Rs. 56,19,932/- u/s 57 of IT Act, 1961 3. Facts of the Case The assessee is a vegetable merchant and during the year under consideration the assessee has shown business income and interest income from bank and other sources. Besides this during the year the assessee has received interest on compulsory acquisition of rural agricultural land by Sardar Sarovar Narmada Nigam Limited in Land the interest received was divided among 12 legal heirs including the assessee there is no legal heir, in fact the assessee is the sole owner of the land. The assessee has e-filed his return of income on 26/05/2016 declaring total income of Rs. 16,24,070/-. Notice u/s. 143(2) of the Act was issued on 26/07/2017 and the same was served upon the assessee. In response to the notices u/s 143(2) and 142(1) of the act assessee filed required details on e-filing portal. Same are verified and kept on record. Assessee produced required details for verification which were verified during the course of assessment proceedings. The case was selected under CASS for limited scrutiny on issue of [1] Large deduction claimed u/s 57 of the Act. In view of the above facts as narrated above, the assessee was asked to show cause as to why not interest received from Sardar Sarovar Narmada Nigam Ltd. is taken at Rs. 1,28,29,226/- and expenses claimed of Rs. 1, 12,39,857/- as against the above interest income is ITA No. 685/Rjt/2024 Hasmukhbhai Bachubhai Bariya Page | 3 to be disallowed U/s 57 of the I.T. Act. The taxable income determined, by AO is as under: Total Interest from Sardar Sarovar: 1,28,29,226/- Less: Deduction as per Section 57(iv) @50% : 64,14,613/- Total Interest Income from SSNNL: 64,14,613/- 4. That the assessee filed an appeal against the order of assessment before Ld. CIT(A) dated on 10/12/2018 That the Ld. CIT(A) has issued six notices but there was no compliance to the notice. Hence, the CIT(A) has dismissed the appeal of the assessee. 5. That the assessee field an appeal against the impugned order dated 30/01/2024 before this Tribunal. i). The Ld. AR. of the assessee has submitted due to one reason all due the reason. The assessee could not file the replay to the notice issued by the Ld. CIT(A). The Ld. AR requested for one more opportunity to submit the response before the Ld. CIT(A). ii). On the contrary the Ld. DR. has relied on the order of the lower authority. 6. We have heard both the parties and perused the material available on record. It is noted that the Ld. CIT(A) has issued six notices on different dates to furnish submission in this case but the assessee could not submit response in replay to notice. We find that the assessee was negligent in pursuing the case before Ld. CIT(A). therefore we impose a cost of Rs. 2000/- on the assessee for the negligent action and the cost should be paid ITA No. 685/Rjt/2024 Hasmukhbhai Bachubhai Bariya Page | 4 to the Prime Minister Relief fund (Government of India), the receipt is to be submitted with the Registrar of this Tribunal. Keeping in view, in the interest of justice, that due opportunity be given to the assessee to produced/submit the relevant documents before the Lower Authority. Therefore, we are of the view that one more opportunity should be given to the assessee to present this case before the Ld. CIT(A). We remand the matter back to the file of the Ld. CIT(A) for fresh adjudication on merits. after giving due to opportunity to the assessee of being heard. We further direct to assessee to submit relevant details document, evidence if any in support of the case before the Ld. CIT(A). 7. In result the appeal of the assessee allowed for statical purpose. Order pronounced in the open court on 14/ 07 /2025. Sd/- Sd/- (Dr. A.L. SAINI) (DINESH MOHAN SINHA) ACCOUNT MEMBER JUDICAL MEMBER Rajkot Ǒदनांक/ Date: 14 / 07/2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "