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Sumit A. Basu Room No. 205, Dheeraj Enclave, W. E. Highways, Borivali, Mumbai-400 006 Vs. ITO-25(2)(3), Pratyakshakar Bhavan, Bandra Kurla Complex, Bandra E),Mumbai-400 051
January, 16th 2015

          ,        ,                                    

                     ./I.T.A. No.6166/Mum/2011
                    (   / Assessment Year: 2008-09)
Sumit A. Basu                                      ITO-25(2)(3),
Room No. 205, Dheeraj Enclave,            /        Pratyakshakar Bhavan,
W. E. Highways, Borivali,                 Vs.      Bandra Kurla Complex, Bandra (E),
Mumbai-400 006                                     Mumbai-400 051
     . /  . /PAN/GIR No. AFBPB 9295 C
         ( /Appellant)                       :            (     / Respondent)

         / Appellant by                      :    Shri Sumit Basu

           /Respondent by                    :    Shri Love Kumar

                          /                  :    14.01.2015
                    Date of Hearing
                     Date of Order           :    15.01.2015

                                    / O R D E R
Per Sanjay Arora, A. M.:
       This is an Appeal by the Assessee directed against the Order by the Commissioner
of Income Tax (Appeals)-35, Mumbai (`CIT(A)' for short) dated 11.07.2011, dismissing
the Assessee's appeal contesting its assessment u/s.144 of the Income Tax Act, 1961
(`the Act' hereinafter) for the assessment year (A.Y.) 2008-09 vide order dated

2.     We have heard the parties, and perused the material on record. We observe that the
assessment in the instant case stands made at an income of Rs.32.79 lacs, as against the
returned income of Rs.6.42 lacs. The principal additions are toward contract receipts
(Rs.17.65 lacs) and disallowance of purchase/expenses charged to the trading account
                                                    ITA No. 6166/Mum/2011 (A.Y. 2008-09)
                                                                       Sumit A. Basu vs. ITO

(Rs.5.76 lacs). The contract receipts were added on the basis of the Annual Information
Report (AIR); it being not known whether the same stood included by the assessee in his
disclosed turnover of Rs.404.53 lacs, i.e., as a clearing and forwarding (C & F) agent, or
not. The disallowance of purchase/trading expenses is by disturbing the assessee's gross
profit rate of 4.57%, assessing it at 6%. As a reading of the assessment order would show,
there is no definite information or material and, thus, basis with the Revenue to show or
even indicate that the assessee had not disclosed the turnover finding mention in the AIR.
Rather, in-as-much as the tax stands deducted at source thereon, and presumably claimed,
the same can only be expected to be accounted for. Again, the question would be, if the
gross receipt, or only the gross margin thereon, i.e., assuming it to be undisclosed, is
liable to be brought to tax as income. Similarly, there is no reference to the assessee's
gross profit rate for the earlier or subsequent years, or any other comparable case, to
justify the enhanced rate of 6%. Again, the addition on account of undisclosed turnover,
in-as-much as the entire receipt stands assessed as income, would also positively impact
the gross profit ratio. In our view, these facts and circumstances are reasons sufficient and
compelling enough for the ld. CIT(A) to have, in the interest of justice, condoned the
delay of 40 days in the filing of the appeal by the assessee before him. As explained in
Collector, Land Acquisition vs. Mst. Katiji and others [1987] 167 ITR 471 (SC), when
substantial justice and technical considerations are pitted against each other, the cause of
substantial justice deserves to be preferred, for the other side cannot claim to have a
vested right in injustice being done because of a non-deliberate delay. That is, in the
absence of laches, which we do not observe in the instant case, the condonation of delay
should almost always be guided or decided on the anvil of the cause of justice, which we
observe as impelling in the instant case. The ld. CIT(A), therefore, in the exercise of his
judicial discretion ought to have in our view condoned the said delay. We, accordingly,
allowing the assessee's Ground # 3 before us, challenging the same, restore the matter
back to the file of the ld. CIT(A) to decide the assessee's appeal on merits, i.e., in
accordance with the law and after hearing the parties before him. We decide accordingly.
ITA No. 6166/Mum/2011 (A.Y. 2008-09) Sumit A. Basu vs. ITO 3. In the result, the assessee's appeal is allowed on the afore-said terms. Order pronounced in the open court on January 14, 2015 Sd/- Sd/- (Joginder Singh) (Sanjay Arora) / Judicial Member / Accountant Member Mumbai; Dated : 15.01.2015 . ../Roshani, Sr. PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent 3. () / The CIT(A) 4. / CIT - concerned 5. , , / DR, ITAT, Mumbai 6. / Guard File / BY ORDER, / (Dy./Asstt. Registrar) , / ITAT, Mumbai
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