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From the Courts »
  Vatsala Shenoy vs. JCIT (Supreme Court)
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 ITO vs. Vikram A. Pradhan (ITAT Mumbai)

Income Tax Officer Ward-25(3)(1), C-11, Pratyakshakar Bhavan Bandra Kurla Complex Mumbai 400 051 Vs. Shri Mukesh K. Gaglani 202-E, Shubh Shanti Complex, M.G. Road, Dahanukar Wadi Kandivali (W), Mumbai 400067
June, 03rd 2015
    ,  , , 
      IN THE INCOME TAX APPELLATE TRIBUNAL
           MUMBAI BENCHES "G", MUMBAI


              ,                          
        .  . ,  ,  
     Before Shri Joginder Singh, Judicial Member, and
          Shri N.K. Billaiya, Accountant Member


               ITA NO.9126/Mum/2010
              Assessment Year: 2005-06


Income Tax Officer               Shri Mukesh K. Gaglani
Ward-25(3)(1),             /     202-E, Shubh Shanti Complex,
C-11, Pratyakshakar Bhavan       M.G. Road, Dahanukar Wadi
Bandra Kurla Complex       Vs.   Kandivali (W), Mumbai 400067
Mumbai 400 051
    ( /Revenue)                      ( /Assessee)
                                        P.A. No.AEFPG7132G


               ITA NO.9127/Mum/2010
              Assessment Year: 2005-06


Income Tax Officer               Shri Manish K. Gaglani
Ward-25(3)(1),             /     202-E, Shubh Shanti Complex,
C-11, Pratyakshakar Bhavan       M.G. Road, Dahanukar Wadi
Bandra Kurla Complex       Vs.   Kandivali (W), Mumbai 400067
Mumbai 400 051
    ( /Revenue)                      ( /Assessee)
                                        P.A. No.AFDPG7133H
                            2              Shri Manish K. Gaglani
                                           Shri Mukesh K. Gaglani


               ITA NO.820/Mum/2011
              Assessment Year: 2005-06

Shri Manish K. Gaglani             Income Tax Officer
202-E, Shubh Shanti Complex, /     Ward-25(3)(1),
M.G. Road, Dahanukar Wadi          C-11, Pratyakshakar Bhavan
Kandivali (W), Mumbai 400067 Vs.   Bandra Kurla Complex
                                   Mumbai 400 051
    ( /Assessee)                         ( /Revenue)
                                          P.A ­ AEDPG7133H

               ITA NO.821/Mum/2011
              Assessment Year: 2005-06

Shri Manish K. Gaglani             Income Tax Officer
202-E, Shubh Shanti Complex, /     Ward-25(3)(1),
M.G. Road, Dahanukar Wadi          C-11, Pratyakshakar Bhavan
Kandivali (W), Mumbai 400067 Vs.   Bandra Kurla Complex
                                   Mumbai 400 051
    ( /Assessee)                         ( /Revenue)
                                          P.A ­ AEDPG7133H

               ITA NO.822/Mum/2011
              Assessment Year: 2005-06

Shri Mukesh K. Gaglani             Income Tax Officer
202-E, Shubh Shanti Complex, /     Ward-25(3)(1),
M.G. Road, Dahanukar Wadi          C-11, Pratyakshakar Bhavan
Kandivali (W), Mumbai 400067 Vs.   Bandra Kurla Complex
                                   Mumbai 400 051
    ( /Assessee)                         ( /Revenue)
                                          P.A ­ AEFPG7132G

               ITA NO.823/Mum/2011
              Assessment Year: 2005-06

Shri Mukesh K. Gaglani             Income Tax Officer
202-E, Shubh Shanti Complex, /     Ward-25(3)(1),
M.G. Road, Dahanukar Wadi          C-11, Pratyakshakar Bhavan
Kandivali (W), Mumbai 400067 Vs.   Bandra Kurla Complex
                                   Mumbai 400 051
    ( /Assessee)                         ( /Revenue)
                                3                 Shri Manish K. Gaglani
                                                  Shri Mukesh K. Gaglani

                                                   P.A ­ AEFPG7132G

    / Assessee by                    Shri S.C. Tiwari a/w
                                     Ms. Priyanka J. Maru
    / Revenue by                     Shri Premanand J.


    / Date of Hearing                        01/06/2015

    /Date of Order:                          01 /06/2015


                           / O R D E R

Per Joginder Singh (Judicial Member)


     These appeals are by different assessees as well as by the
Revenue for the assessment year 2005-06, directed against the
impugned orders of the learned first appellate authority,
Mumbai.





     First we shall take up the appeal of the Revenue (ITA
no.9126/Mum./2010 and ITA no.9127/Mum./2010), wherein
the Revenue is aggrieved with the direction to the Assessing
Officer to estimate the net profit @ 5% on the credit entries
treating the same as business income of the assessee as against
the estimated profit @ 15% by the A.O. without appreciating the
fact that the assessee did not produce any books of accounts,
bills and vouchers during the assessment proceedings or
remand    proceedings.    Further,     deletion   of    addition     of
Rs.6,60,250, made u/s 68 of the Income Tax Act, 1961
(hereinafter "the Act") amounting to Rs.6,60,250, has been
challenged.
                                 4             Shri Manish K. Gaglani
                                               Shri Mukesh K. Gaglani

2.   The crux of the arguments advanced by Shri Parmanand
J., learned D.R., is identical to the ground raised by asserting
that neither the list of beneficiaries nor the necessary details
were filed by the assessee, thus, there is no valid reason for
estimating the net profit @ 5% of the credit entries. So far as
deleting the addition made u/s 68 of the Act is concerned, the
learned D.R. explained that neither during the assessment
proceedings nor during the remand proceedings, the assessee
co-relate the withdrawals and deposits and intentionally avoided
filing of any evidence before the A.O.

3.   On the other hand, Shri S.C. Tiwari, along with Ms.
Priyanka J. Maru, defended the conclusion arrived at in the
impugned order by contending that necessary details were filed
before the learned Commissioner of Income Tax (Appeals) and
the learned A.O. made the addition at his own whims and
fancies.

4.   We have considered the rival submissions and perused the
material available on record. If the observation made in the
assessment order, leading to addition made to the total income,
conclusion drawn in the impugned order, material available on
record, assertions made by the ld. respective counsels, if kept in
juxtaposition and analyzed, we find that un-cotorvertedly,
during the assessment stage, the assessee did not file the list of
beneficiaries, thus, the assessee did not discharge the onus cast
upon them. It is also noted that in the absence of necessary
details and non-appearance by the assessee, the assessment
was framed u/s 144 r/w section 147 of the Act. The assessee
did not established the genuineness of purchases claimed to be
                                  5                Shri Manish K. Gaglani
                                                   Shri Mukesh K. Gaglani

made from Megha Impex and on verification of the return filed
by Shri Mukesh Gaglani, it was found that only the commission
income was disclosed and there was no business receipts. The
totality of the facts clearly indicates that practically, no lawful
business was carried out by the assessee during the relevant
time. The learned Commissioner of Income Tax (Appeals)
estimated the net profit merely based on his subjective approach
and did not controvert the findings contained in the assessment
order. No valid reason was assigned in adopting the net profit @
5% against 15% estimated by the A.O. Therefore, in the interest
of justice and keeping in view the principles of natural justice,
neither party should aggrieve, we remand both these appeals to
the file of the learned A.O. to examine the claim of the assessee
afresh for which due opportunity of being heard be provided to
the assessees with further liberty to furnish evidence, if any, in
support of their claim. Consequently, both these appeals are
allowed for statistical purposes only.

5.   In ITA no.820/Mum./2012, direction to the A.O. to
estimate the net profit @ 5% at credit in the bank account has
been challenged against 1% offered by the assessee. In view of
our above findings, this appeal is also remanded back to the file
of the A.O. for fresh adjudication in accordance with law. The
assessee be given opportunity of being heard with further liberty
to furnish evidence, if any, in support of his claim. Thus, this
appeal is also allowed for statistical purposes.

6.   ITA   no.821,   822    and       823/Mum./2011,      pertain     to
imposition of penalty u/s 271(1)(b) of the Act. The crux of
arguments advanced by the learned Counsel for the assessee
                                 6              Shri Manish K. Gaglani
                                                Shri Mukesh K. Gaglani

was that a small delay in filing the appeal before the learned
Commissioner of Income Tax (Appeals) was not condoned and
there is no adjudication of these appeals on merit. On the other
hand, the learned D.R. contended that the assessee did not
explain the delay, therefore, the impugned orders were defenced.




7.   We have considered the rival submissions and perused the
material available on record. Broadly, we find that there was
delay of one month in filing these appeals before the learned first
appellate authority. The assessee filed the application for
condonation of delay but that could not be filed within the
prescribed time due to hospitalization of a family member. The
learned Commissioner of Income Tax (Appeals) has mentioned
identical reasoning / facts in his order and did not admit the
appeals on the ground that the name of the family member was
not mentioned in the condonation petition and further no
medical certificate was filed. Thus, the delay was not condoned.
Without going into much deliberation, we direct the learned first
appellate authority to decide these appeals on merit. If the
learned   Commissioner of Income        Tax   (Appeals)   was    not
convinced with the factum of ailment nothing prevented him to
direct the assessee to file the necessary details, therefore,
keeping in view the principles of natural justice and fair play,
fresh adjudication is required for which the assessee be given
opportunity of being heard with further liberty to furnish
evidence, if any, to substantiate his claim. These appeals of the
assessee are also allowed for statistical purposes.
                                          7         Shri Manish K. Gaglani
                                                    Shri Mukesh K. Gaglani


      Finally, the appeals of the Revenue as well as of the
assessee are allowed for statistical purposes.

      This order was pronounced in the open Court in the
presence of learned Representatives from both the sides at the
conclusion of the hearing on 1st June 2015.


                    Sd/­                                   Sd/­
             (N.K. Billaiya)                        (Joginder Singh)
   / ACCOUNTANT MEMBER                          / JUDICIAL MEMBER



  Mumbai;  Dated : 01/06/2015

Shekhar, P.S/..   ./Pradeep Chowdhuury
    /Copy of the Order forwarded to :
1.    / The Appellant
2.    / The Respondent.
3.     () / The CIT, Mumbai.
4.      / CIT(A)-              , Mumbai
5.    ,   ,            / DR,
     ITAT, Mumbai
6.     / Guard file.
                                                     / BY ORDER,
                //True Copy//
                                   /  (Dy./Asstt. Registrar)
                                      ,   / ITAT, Mumbai

 
 
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