SHRI GIRISHKUMAR RAMNIKLAL DOSHI,,SURENDRANAGAR vs. THE INCOME TAX OFFICER, WARD-2,, SURENDRANAGAR

The appeal filed by the assessee, for Assessment Year 2011-12, is barred by limitation by 469 days. The assessee has moved a petition requesting the Bench to condone the delay.

We have heard both the parties on this preliminary issue and noted that the assessee was hospitalized from 28.04.2017 to 23.05.2017 and thereafter, the assessee was also admitted to Intensive Care Unit (ICU) for some weeks and then ultimately, the assessee had died on 12.12.2018. The Ld. Counsel for the assessee has submitted the relevant medical papers and the death certificate of the assessee, before the Bench. We find that the circumstances narrated in the affidavit for condonation of delay, have clearly explained the sufficient cause. A perusal of the affidavit gives us an impression of existence of mitigating circumstances to enable us to exercise our discretion in favour of the assessee. We are of the considered opinion that in the interest of justice, the delay deserves to be condoned. We, accordingly, condone the delay.

So far merits of the case are concerned, the relevant material facts of the assessee`s case, are as follows. The assessee had filed his return of income for assessment year (A.Y.) 2011-12, on 20.09.2011, declaring total income at Rs. NIL. The return of income, was processed u/s 143(1) of the Act. Later on, the assessee`s case was taken up for scrutiny assessment and notice u/s 143(2) of the Act, was issued on 27/09/2012 and duly served upon the assessee, on 28/09/2012. Subsequently, notice u/s 142(1) of the Act, along with questionnaire was issued on 17/06/2013 and duly served upon the assessee. During the assessment year, under consideration, the assessee has engaged in the business of trading/processing activity of tea (leaves), cotton (bales) and consignment agent.

After verification of assessee's reply and previous case records, the assessing officer noticed that there was no debtors have been shown in the Name of Kahan Exim Pvt. Ltd and Moneycare Fin. & Leasing P. Ltd. during the previous year, that is, Financial Year, (F.Y.) 2009-10. Therefore, the assessee was asked vide order sheet entry dated 25/02/2014 & 24/03/2014, as to why capital introduced of Rs. 1,69,18,800/- should not be added to total income of the assessee.

In response to the above, the assessee has changed his previous reply and furnished written submission before the assessing officer on 18/03/2014, the same is reproduced as under:

However, assessing officer did not accept the above reply of the assessee, on account of following reasons:

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the learner, CIT A, who has confirmed the action of the assessing officer. The ld. CIT(A) held that assessing officer has narrated the facts and reached on a conclusion that there was NIL balance before 31/03/2009 of the Bank account of Shri Neetish R Doshi. However, amount of Rs.1,66,77,783/- was deposited on 31/03/2009 by Shri Neetish R Doshi in the bank account of assessee receiving Rs. 1,04,00,000/- from Moneycare finance & leasing Itd and Rs.64,77,783/- from Kahan Exim Private Limited on 31/03/2009 and on the same date, the assessee has given Rs. 1,04,00,000/- to Moneycare finance & leasing Itd and Rs.64,77,783/- to Kahan Exim Private Limited but the said transaction has not reflected in books of accounts maintained for Financial Year ( F.Y.)2008-09, therefore, ld CIT (A) confirmed the addition made by the assessing officer.

Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before us.

On the other hand, Ld. DR for the Revenue submitted that the assessee has introduced new capital to the tune of Rs.1,69,18,800/-, and in assessee’s case once the loan was given by brother and then the loan was taken back by the brother, with the help of the Private Limited Company. Therefore, Ld. DR pointed out that both the entities, where the unaccounted transactions were routed, were Private Limited Companies and a Private Limited Company cannot give a gift to another Private Limited Company and, hence, the transaction done by the assessee is an unaccounted money of the assessee. Therefore, the assessing officer was justified in making the addition and, hence, the Ld. DR for the Revenue contended that the addition made by the assessing officer may be sustained.

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. The Ld. Counsel for the assessee, submitted before us that neither the assessing officer nor the CIT(A) has appreciated the facts of the assessee`s case and accounting entries involved in the transaction. The ld. Counsel for the assessee submitted that assessee has raised the following ground No.2 before the Tribunal, wherein it is specially mentioned that facts were not appreciated by the lower authorities in right perspective, the said ground No.2 reads as follows:

We note that the assessee has received capital of Rs.1,68,77,783/- from his credit balance in the case of Kahan Exim Ltd. and Moneycare Fin. & Leasing Pvt. Ltd. but after verification of pervious year case records it is noticed that there was no debtors balance in the name of Kahan Exim Ltd. and Moneycare Fin. & Leasing Pvt. Ltd. in his audited books of accounts during the previous year i.e. F.Y.2009-10.The assessee has stated that the said capital was received from his saving bank account, vide SB A/c oriental Bank of Commerce and Kotak Mahindra Bank A/c and the said amount was deposited by Kahan Exim Pvt. Ltd and Money Care Fin, and lea. Ltd. However, the assessee has not shown the said account in his books of account and the said amount claimed as deposited by Kahan Exim Pvt. ltd, and Money Care Fin. and lea. Ltd have also not been reflected as debtors in his books of accounts maintained in pervious year i.e. AY. 2009-10. The assessee has stated that Rs.1,68,77,783/-, received from his brother, Neetish R Doshi, who was NRI and he transferred fund from his NRE A/C in F.Y. 2008-09 and from that assessee gave to Kahan Exim Private Limited and Moneycare finance and leasing ltd, as deposit. However, verification of saving bank account's statement of the assessee and his brother it reveals that the assessee has received the said amount on 31/03/2009 in his saving bank account from Bank account of Shri Neetish R Doshi, the assessee has given Rs.1,04,000/-, to Moneycare finainace and leasing ltd and Rs 64,77,783/- to Kahan Exim Pvt. Ltd, on the same date, that is, 31.03.2009. It was noticed by the assessing officer that there was NIL balance before 31/03/2009 of the Bank account of Shri Neetish R Doshi. However, Rs.1,66,77,783/- was deposited on 31/03/2009 by Shri Neetish R Doshi in the bank account of assessee receiving Rs.1,04,00,000/- from Moneycare finance & leasing Itd and Rs.64,77,783/- from Kahan Exim Private Limited on 31/03/2009 and on the same date, the assessee has given Rs. 1,04,00,000/- to Moneycare finance & leasing Itd and Rs.64,77,783/- to Kahan Exim Private Limited but the said transaction has not reflected in books of accounts maintained for Financial Year ( F.Y.)2008-09. We find that the above facts and evidences were examined by the assessing officer as well as by the ld. CIT(A), during the appellate proceedings. Therefore, based on this factual position, narrated above, the addition of Rs. 1,68,77,783/-, should be sustained in the hands of the assessee, as the assessee, has himself could not explain the transaction, with supporting evidences. Hence, this appeal deserves to be dismissed by upholding the order passed by the CIT(A) and it is dismissed.