MRS. MANJU MADHUSUDAN DHOOT,AHMEDNAGAR vs. INCOME-TAX OFFICER,

आदेश / ORDER PER ANIL CHATURVEDI, AM

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.

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.

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.

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.

“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

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.

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

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.

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.