ANKIT GEMS PRIVATE LIMITED (AS SUCCESSOR TO ANKIT GEMS),BANDRA (EAST) vs. CIRCLE 5(1)(1), MUMBAI, CHURCHGATE, MUMBAI
Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWALAssessment Year: 2012-13
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A)- 51, Mumbai vide order no. ITBA/APL/S/250/2023-24/1058630314(1), dated 11.12.2023 passed against the assessment order by ACIT, Circle19(1), Mumbai, u/s. 143(3) r.w.s 147 of the Income-tax Act (hereinafter referred to as the “Act”), dated 15.12.2019 for Assessment Year 2012-13. 2. Grounds taken by the assessee are reproduced as under:
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"1) The NFAC failed to appreciate that since the Appellant did not make any purchases or any other transaction from the entity 'Millenium Concern', the question of making the addition in the hands of the Appellant did not arise.
2) The NFAC erred in observing that the Appellant was one of the real importers on whose behalf diamonds were imported by the Bhanwarlal Jain group and diamonds were handed over out of books to the Appellant.
3) The NFAC erred in upholding the order of the AO on the basis of conjecture &
surmise and without any material to show that the Appellant had made any purchases out of its books. Therefore, the addition is bad in law.
4) The NFAC failed to appreciate that the Appellant cannot be required to prove a negative that it did not purchase any goods from the Bhanwarlal Jain group, and hence, in the absence of material to show that the Appellant had in fact done so, no addition could be made in the hands of the Appellant. The Appellant states that the above Grounds of Appeal are in addition to, in the alternative and without prejudice to each other and further craves leave to add, amend, delete or alter any Grounds of Appeal."
1. Assessee has raised as many as four grounds, all of which pertain to addition made in respect of alleged bogus purchases from one entity called Millennium Concern, for which the claim of the assessee is that it has never made any purchase of any goods from this entity in the year under consideration and hence, assessee cannot be made to prove a negative.
At the outset, we take note of the fact that there is a delay of 427 days in filing the present appeal before the Tribunal, for which petition for condonation of delay along with affidavit is placed on record. From the perusal of the application for condonation of delay, it is brought out that one of the employee of the assessee, Shri Nikunj Dinesh Sawadiya was operating the email account which was registered for the purpose of income tax compliances. Owing to certain medical issues at the end of the employee, the email which was received, inadvertently got missed to be taken care of, for the purpose of filing the appeal. Later, when the penalty notice for imposition of penalty u/s. 271(1)(c) was issued, assessee came to know about the passing of the impugned first
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appellate order and thereafter, took all the requisite steps to comply with the same and filed the appeal with the aforesaid delay. Assessee has placed on record an affidavit of the employee along with his medical records.
1. Assessee has also placed on record the notice which was issued for the purpose of imposition of penalty to justify the submission made by it. We have perused the material and given our thoughtful consideration to the same. It is a settled principle of law that ordinarily a litigant does not gain anything by delaying the filing of an appeal. In the present case also, assessee does not gain any advantage by delaying the filing of this present appeal. It is also a settled principle of law that an adjudication on merits which decides the issue substantively ought to be preferred over a rejection of appeal on technical grounds. Also, no loss shall be caused to the revenue, if the delay in filing the present appeal is condoned and it is decided on merits. According to the assessee, it will suffer an irreparable harm and injury, if the delay in filing the present appeal is not condoned.
2. Case of the assessee is fortified by the decision of Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag and others vs. Master, Katiji and others, [1987] SCR-2 387 (SC). Considering the overall factual matrix and the decision of the Hon'ble Supreme Court as well as the settled principle of law as stated above, we find it appropriate to condone the delay in filing the present appeal and take it up for adjudication on merits.
Brief facts of the case are that assessee was a partnership firm carrying on business of import, manufacturing, trading of cut and polished diamonds during the year under consideration. Assessee filed
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its return of income on 28.11.2012, reporting total income at Rs.2,40,31,330/-. Assessee in the state of partnership firm existed only from 01.04.2011 to 26.04.2011 after which it got converted into a private limited company. Documentary evidences in respect of conversion of status of assessee from a partnership firm into a private limited company are placed on record in the form of incorporation issued by the