Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH, PUNE
आदेश / ORDER PER ANIL CHATURVEDI, AM
This appeal of the assessee is emanating out of the order of Commissioner of Income Tax (Appeal)-I, Pune dated 21.12.2011 for the assessment year 2008- 09. 2. The relevant facts as culled out from the material on record are as under:-
2 ITA No.1907/PUN/2014 A.Y.2008-09
Assessee is an individual stated to be having manufacturing of electronic
appliances. The assessee filed his return of income for A.Y 2008-09 on
30.09.2008 declaring total income of Rs.6,46,710/-. The case of assessee was
selected for scrutiny and thereafter, assessment was framed u/s. 143(3) of the
Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide order dated
24.12.2010 determining total income of Rs.1,30,25,111/-. Aggrieved by the order
of Assessing Officer, Assessee filed appeal before CIT(A) who vide order dated
21.12.2011 ( in appeal no.PN/CIT(A)-I/DCIT/AN Cir.AN/174/10-11) dismissed
the appeal of Assessee. Aggrieved by the order of CIT(A), Assessee filed appeal
before Tribunal. The Tribunal vide order dated 15.12.2016 in ITA
No.1907/PUN/2014 dismissed the appeal of Assessee. Aggrieved by the order of
Tribunal, Assessee filed Miscellaneous Application (M/A) wherein it was
contented that appeal was dismissed by Co-ordinate Bench on account on non
prosecution and non appearance of the assessee. Reasons for non appearance
were submitted by assessee. After considering the submissions made on behalf of
Assessee the order in ITA No.1907/PUN/2014 was recalled vide Miscellaneous
Application No. 51/PUN/2017 order dated 27.10.2017 and thus, the appeal is
now before.
The case file reveals that there was delay of 1052 days in filing the present
appeal. Mrs. Manju Madhusudan Dhoot, Legal heir of Late Madhusudan
Banshilal Dhoot has filed an affidavit dated 08.10.2014 wherein inter alia it is
submitted that Madhusudan Banshilal Dhoot, the husband of Mrs. Manju
Madhusudan Dhoot was looking after the business. He expired on 08.05.2012.
Prior to his death, he was having many health issues and was hospitalized for a
period of almost one year and therefore, he could not attend to any of his
business nor could appear before CIT(A). It is further submitted that none of her
3 ITA No.1907/PUN/2014 A.Y.2008-09
family members were aware of his business happenings and it was only when the
Income Tax Department started to pressurize for the demand, she could look into
the matter and she realized that after his death entire business activity has come
to an halt and it was very difficult to get even the required documents. Thereafter,
after taking advice of some legal consultants, she filed the appeal. In these
circumstances, delay had occurred in filing the present appeal and the delay was
not due to any mala-fide intentions. She therefore, prayed that the delay occurred
in filing the present appeal be condoned.
The Ld. AR for the assessee took us to the contention of affidavit and
submitted in view of the submissions made by Legal heir of assessee and
considering the facts and circumstances; delay in filing appeal may be condoned.
The Ld. DR did not seriously objected to the prayer for condonation of delay in
filing of appeal.
We have heard the rival submissions on the issue of condonation of delay.
The assessee has in the sworn affidavit spelt out the reasons which lead to the
delay in filing the present appeal. In view of the settled law that when substantial
justice and technicalities are pitted against each other, then the cause of
substantial justice deserves to be preferred and after considering the averments
made in the affidavit and in the interest of justice, we condone the delay and
admit the appeal for hearing.
Grounds raised by assessee reads as under:
“1. On the facts and in the circumstances of the case and in law the Learned CIT (A) I, erred in rejecting the appeal by passing ex-parte order by following judgment of 38 ITO 320 (Del) CIT Vis. Multiplan India limited, without considering the fact that such powers are not vested with first appellate authority.
4 ITA No.1907/PUN/2014 A.Y.2008-09
On the facts and in the circumstances of the case and in law, the Lower Authorities have erred in making an addition of Rs.1,23,78,401/- by invoking provisions of section 68 of the Income Tax Act, 1961 thereby made an addition of entire sundry creditors transacted during the year by merely verifying only 8 parties out of the total sundry creditors. 3. The appellant craves for to leave, add, alter, modify, delete above ground of appeal before or at the time hearing, in the interest of natural justice.”
During the course of assessment proceedings, Assessing Officer noted that
the balance sheet as at 31/03/2008 showed closing stock of Rs.3,72,62,824/-,
sundry creditors of Rs.3,92,78,090/- and the total turnover of Rs. 3,52,21,512/-.
The Assessing Officer noted that sundry creditors exceeded the total turnover and
it raised suspicion about the genuineness of sundry creditors shown in the
balance sheet. The assessee was asked to file copies of account extracts,
confirmation letters, copies of return of income etc of the creditors. Assessing
Officer noted that Assessee filed a part list of the creditors and the list did not
contain their addresses. The Assessing Officer, thereafter, deputed one Inspector
to carry out verification with some of the creditors. The Assessing Officer noted
that the Inspector visited eight creditors of Aurangabad and reported that out of
eight persons, seven creditors confirmed that they did not have any transaction
whatsoever with assessee. The finding of Inspector was informed to the assessee.
The Assessing Officer noted that no satisfactory explanation was furnished by
assessee. He, therefore, considered the increased sundry creditors for the year of
Rs.1,23,78,401/- as unexplained cash credits and made its addition u/s.68 of
the Act.
Aggrieved by the order of Assessing Officer, assessee carried the matter
before CIT(A) who in ex-parte order dated 21/12/2011 confirmed the addition
made by Assessing Officer. Aggrieved by the order of CIT(A), the assessee is in
appeal before us.
5 ITA No.1907/PUN/2014 A.Y.2008-09
Before us, the Ld. AR reiterated the submissions made before Assessing
Officer and CIT(A). It was also submitted that due to the reasons stated in the
affidavit filed for condonation of delay of present appeal and due to bad health of
the Assessee, necessary details could not be furnished before CIT(A). He further
submitted that Madhusudan Banshilal Dhoot expired on 08.05.2012 and after
his death business has closed. He also submitted that in earlier year and
subsequent year 10% of the total purchases have been disallowed whereas in the
current year an entire purchase of Rs.1.24 Crore have been disallowed. He
therefore, submitted that in the totality of facts and circumstances, reasonable
and sympathetic view may be taken as in earlier and subsequent years, the
addition be restricted to 10% of purchase. The Ld. DR on the other hand
supported the order of Assessing Officer.
We have heard the rival submissions and perused the material on record.
The issue in the present case is with respect to addition of sundry creditors’
amounting to Rs.1,23,78,401/- u/s. 68 of the Act. Before us, Legal heir of Shri
Manju Madhusudan Dhoot has filed an affidavit wherein it is inter alia submitted
that Madhusudan Banshilal Dhoot was under treatment since 2010-2011
because of which he could not furnish necessary documents/details before
Authorities below and he expired on 08.05.2012 and after his death, business is
closed. Before us, Ld. AR submitted that in the earlier year and subsequent year,
additions on account of unexplained creditors u/s. 68 has been made to the
extent of 10% of purchases. The aforesaid contention of the Ld. AR and legal heir
of the Assessee has not been controverted by Revenue. We also find that CIT(A)
has passed an ex-parte order. In a normal situation, we would have remitted the
issue back to the file of CIT(A) to pass a de-novo speaking order. However, in the
peculiar facts of the present case, we are of the view that remitting the mater
6 ITA No.1907/PUN/2014 A.Y.2008-09
back to CIT(A) would result into multiplicity of proceedings. Considering the peculiar facts of the present case, we are of the view that in the present case to prevent multiplicity of proceedings, interest of justice shall be met if the addition is restricted to 10% of the total purchases of Rs.1,23,78,401/-. We, accordingly, uphold the addition to the extent of Rs.12,37,840/- as against the addition of Rs.1,23,78,401/- made by Assessing Officer and confirmed by CIT(A). Thus, ground raised by Assessee is partly allowed.
In the result, appeal of the assessee is partly allowed. 11.
Order pronounced on this 10th day of April, 2018.
Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER
पुणे / Pune; �दनांक / Dated : 10th April, 2018 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-1, Pune. 4. The CIT-1, Pune. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy //
आदेशानुसार / BY ORDER,
�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.