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Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘D’
Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED
आदेश/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
Assessee is in appeal before the Tribunal against order of ld.CIT(A)-4, Ahmedabad dated 11.7.2016 passed for the Asstt.Year 2010-11.
Registry has pointed out that appeal filed by the assessee is time barred by 65 days. In order to explain the delay, the assessee has filed an application for condonation of delay as well as affidavit deposed on 28.11.2016. In the affidavit, assessee has deposed that the ld.CIT(A)
ITA No.3138/Ahd/2016 2 has decided his appeal on 11.7.2016 and the order was served on 27.7.2016. His father was old and admitted to the hospital. He was suffering from heart problem and angiography was done in between 24.6.2016 to 27.6.2016. Simultaneously, wife and daughter were not keeping good health. Daughter was diagnosed with dengue and admitted in hospital, and on account of bad health of family members, he could not file appeal within time. It became time barred by 65 days.
The ld.DR, on the other hand contended that this is general explanation at the end of the assessee. Angiography was done prior to the service of order passed by the ld.CIT(A). Similarly, wife was fallen ill in the month of August, 2016. Thus, there was no specific explanation at the end of the assessee.
We have duly considered rival submissions and gone through the record carefully. The contentions of the assessee are that three members of the family were not keeping good health during that period. He was preoccupied in taking their care. Atmosphere in the family was not so conducive which can give him free time to pay attention towards other issues. Therefore, he could not prosecute his income-tax proceedings and delay has happened in filing the appeal. Considering the above circumstances, and non-availability of any proof that a deliberate attempt at the end of the assessee to file appeal, after expiry of limitation, as a matter of strategy, we are of the view that a bona fide mistake has happened at the end of the assessee. Therefore, we condone the delay in filing the appeal and proceed to decide the appeal on merit.
The assessee has raised an additional ground of appeal, vide which he has challenged reopening of the assessment. Apart from challenging reopening of the assessment, the assessee is impugning addition of Rs.11,86,871/- which was made by the AO by disallowance of future and option loss claimed by the assessee.
ITA No.3138/Ahd/2016 3
Brief facts of the case are that the assessee has filed his return of income on 15.10.2010 declaring total income at Rs.22,98,080/-. This return was processed under section 143(1) of the Income Tax Act. Thereafter, the AO had issued notice under section 148 of the Act on 16.5.2013 after recording reasons for reopening under section 147 of the Act. The reasons recorded by the AO read as under:
“3. Reasons for reopening the case u/s 147 of the IT. Act was as under :-
"Shri Pravinbhai Ambalal Patel having PAN No. AGEPP13Q1P, The assessee has sold out property bearing Survey No. 202 at Village Sughad (Dist, Gandhinagar), vide sale deed registered on 30,06.2009 i.e. in FY. 2009-10 relevant to A, Y. 2010-11 and received Ms, 36,04,795/- as a co-seller with Shri Satishkumar Ambalal Patel, Ahmedabad.
As per records, the assessee has filed his return of Income for A.Y, 2010-11 on 15.10.2010 vide acknowledgment No. 172097880151010 (e-filing) declaring total income of Rs. 22,98,080/~.
Therefore, / have reason to believe that the income chargeable to tax has escaped from assessment within the meaning of section 147 of the IT. Act and assessment of the assessee is required to be re- opened"
After hearing the assessee, ld.AO has passed re-assessment order on 27.3.2015. He made an addition of Rs.11,86,871/-. The discussion made by the AO on this addition reads as under:
“3.4. On verification of the details submitted and on perusal of P & L Account, it is seen that assessee has debited Misc. expenses of Rs. 11,86,871/-, the A.R, of the assessee was asked to give explanation and evidence regarding the expenses debited.
3.5. In response to the same assessee has not provided any evidences in support of his claim and it is found that in the instant case exact practice has been followed as it was followed in the case of his brother. Hence, it is cleared that misc. expenses shown of Rs. 11,86,871/- is nothing but the ingenuine transactions of the F & O
ITA No.3138/Ahd/2016 4 Loss which was never occurred in actual. Therefore, Rs. 11,86,871/- on account of ingenuine F & O Loss has been disallowed and added to the total income of the assessee. Penalty proceedings u7s. 271(1)(c) r.w.s. 274 of the Income Tax Act are initiated for furnishing inaccurate particulars of income thereby concealment of income.”
Appeal to the ld.CIT(A) did not bring any relief to the assessee.
The ld.counsel for the assessee submitted that reasons recorded by the AO did not spell out any specific issue which suggests escapement of a particular item of income. The AO has made reference with regard to the property sold by the assessee. Thus, an impression can be concluded from such narration that proper capital gain ought not to have been calculated by the assessee. However, the ld.AO has not made any addition on account of income escaped for sale of the property. On the strength of Hon’ble Gujarat High Court’s decision in the case of CIT Vs. Mohmed Juned Dadani, 355 ITR 172 (Guj) he submitted that if any addition was not made on an issue for which assessment was reopened, then no other issue can be adjudicated by the AO. He also made reference to the decision of Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. CIT, 336 ITR 136 and decision of Hon’ble Bombay High Court in the case of CIT Vs. Jet Airways (I) Ltd., 195 taxmann 177 (Bom). On the other hand, the ld.DR relied upon the orders of the Revenue authorities.
We have duly considered rival contentions and gone through the record carefully. A perusal of the reasons extracted (supra) would indicate that the ld.AO has not made out any specific issue on which it can be ascertained that the income has escaped assessment. He has just narrated facts with regard to the sale of property. Thereafter, he has narrated fact of filing of the return. He has nowhere mentioned which income or under which head income has escaped from assessment. The reasons are totally vague. He has made addition on account of misc. expenses claimed by the assessee, but no reference
ITA No.3138/Ahd/2016 5 qua this head is being made in the reasons. The Hon’ble jurisdictional High Court has concurred with the interpretation made by Hon’ble Bombay high Court and Hon’ble Delhi High Court in the case of Jet Airways (supra) and Ranbaxy Laboratories (supra). The expression “and also’ employed in section147 is to be construed that if an addition is being made qua an item of income for which assessment was reopened only then any other addition could be made, if found during the course of reassessment proceedings. In other words “and also” would suggest first addition would be made on the item for which assessment has been reopened. In addition to that, if any other income found to be escaped during re-assessment proceedings, then that income will also be added. If no addition is being made on the item for which assessment was reopened, then no other addition is possible. In the present case, firstly, we are not satisfied that sufficient reasons were existing for reopening the assessment, because, the AO has not specified which income has escaped the assessment. Even if for the sake of arguments, it is assumed that reference is to be made to sale of property as an item which can be said that income has escaped assessment, then no addition was made on this item, therefore, no disallowance or addition can be made on other issues. Respectfully following judgment of Hon’ble jurisdictional High Court, we quash the reassessment order.
In the result, appeal of the assessee is allowed.
Order pronounced in the Court on 15th January, 2019 at Ahmedabad.
Sd/- Sd- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 15/01/2019