AKSHAR SKYWARDS CONSTRUTION,MUMBAI vs. ASST COMM OF INCOME TAX, CIRCLE-28(1), MUMBAI

This appeal by assessee is directed against the order of Ld. CIT (A)-51, Mumbai dated 18.01.2023 u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y. 2017-18. The assessee has raised the following grounds of appeal:-

4. In the facts and circumstances of the case Id. AO erred in law and on facts in making disallowance of stamp duty and registration expenses of Rs.4,70,000/- stating that the appellant firm failed to substantiate the claim of expenditure with appropriate evidence, even though the same is incurred to obtain loan from financial institution.

2. The brief facts of the case are that assessee is a partnership firm filed its return of income on 06-11-2017 declaring total income at Rs. 2,04,58,367/-. The case was selected for scrutiny under CASS and notice u/s. 143(2) of the act was issued dated 10-08-2018. Assessee firm engaged in the business of builder/developer. During the assessment proceeding it was observed by AO that assessee firm paid stamp duty of Rs 2, 23,100/- on behalf of the buyer of the flat and assessee incurred Rs 15, 00,000/- towards stamp duty, registration charges on documents for procuring loan from State Bank of India but assessee is not able to substantiate Rs 4.7 lakhs by any evidence hence, disallowed as result of this total disallowance of Rs 6, 93,100/- was made. Assessee being aggrieved with this order of AO preferred an appeal before the Ld. CIT (A) with a delay of 177 days. The Ld. CIT (A) without going on the merits of the matter dismissed the appeal as the same was filed delayed and explanation of delay furnished by assessee is not satisfactory. Assessee being further aggrieved with this order of Ld. CIT (A) preferred this appeal before us.

3. We have gone through the order of AO, order of Ld. CIT (A) and submissions of the assessee along with the case laws relied upon. As a matter was dismissed by the Ld. CIT(A) without discussing the merits of the case as he found matter time barred and not explained satisfactorily hence, first of all we are adjudicating on the matter of condonation of delay based on the explanations submitted by the assessee and documents available on record. In this regard we have gone through the chronology of events as exhibited vide page-3 of the paper-book. In addition to this we are gone through exhibit-A vide page no-15 to 21 of the paper-book. It is found that disallowances made as mentioned (supra) can be explained and disallowance can be reversed by filing an application u/s. 154. In this case, assessee received assessment order on 22-07-2019 and rectification request made on 21-07-2019 and again on 16-01-2020. Till date no order u/s. 154 is being passed by the AO. Because of this impression assessee missed the deadline of filing the appeal before the Ld. CIT (A). In this case dead line to file the appeal u/s. 246A was 21-08-2019. On 31-01-2020 AO passed penalty order u/s. 270A and then assessee filed an appeal before the Ld. CIT (A) on 14-02- 2020. This resulted in delay of 177 days. We have gone through various communications by assessee before AO during the assessment proceedings vide exhibit no. E-1 to E-11 which clearly demonstrates that the assessee is quite punctual and responding to the department and never missed any deadline for any compliance. This delay of 177 days also is inadvertent and misinterpretation of the procedural law. In that situation we find sufficient cause to condone this delay of 177 days.