NAJMUDDIN TURAB SHAIWALA,MUMBAI vs. ITO 20(2)(3), MUMBAI

The main grounds filed with original Form 36 as well as additional grounds of appeal

1. The Learned CIT Appeals-31 has erred in law and on the facts of the case in sustaining the order of Assessing Officer without applying the provisions of Section 44AF of the Income Tax Act, 1961.

Facts leading to the same are that the assessee being resident individual engaged as scrap merchant under proprietorship concern namely S.M.Scrap Merchants was assessed for impugned AY u/s 143(3) on 30/12/2011 at Rs.25,48,930/- after certain additions / disallowances as against returned income of Rs.1,44,430/- filed by the assessee on 31/03/2010. The assessee has suffered following quantum additions, which are the subject matter of this appeal:- Sl.No. Items Amount (Rs.) 1. Unexplained expenditure on purchase of car 2,45,207/- 2. Disallowance u/s 40A(3) 10,32,400/- 3. Unexplained expenditure u/s 69C 5,08,002/- 4. On account of discrepancy in purchases u/s 69C 2,01,892/- ITA.No.2736/Mum/2014 Najmuddin Turab Shaiwala Assessment Year-2009-10 5. On account of discrepancy in Form 26AS 4,16,999/- TOTAL 24,04,500/- The Ld. DR has placed reliance on the findings of lower authorities.

Heard and perused relevant material on record. Upon perusal of the quantum assessment order and the order of Ld. first appellate authority, we find that the assessee, prima facie, has suffered additions mainly due to purchases made in cash in violation of Section 40A(3), discrepancies in the customers’ ledger accounts obtained by Ld. AO pursuant to notices u/s 133(6) vis-à-vis ledger accounts submitted by the assessee, discrepancies in figures reflected in Form 26AS and finally due to non submission of documentary evidences qua car loan taken by the assessee during impugned AY. 5. We also notice that the assessee, in Ground No. 1 has raised a plea that the provisions of Section 44AF have not been applied to the assessee. It appears that this is altogether a new claim before us which was never raised before the lower authorities. We also notice that the Section-44AF starts with non-obstante clause which overrides the provisions of Section 28 to 43C. Therefore, on the facts and circumstances of the case, we deem it fit to restore the matter back to the file of Ld. AO for fresh adjudication in terms of new plea raised by the assessee. The assessee, in turn, is directed to substantiate his claim in this regard forthwith failing which Ld. AO shall be at liberty to decide the matter on the basis of material available on record. Resultantly, Ground No. 1 of assessee’s appeal stands allowed for statistical purposes which make other grounds infructuous.