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 Attachment on Cash Credit of Assessee under GST Act: Delhi HC directs Bank to Comply Instructions to Vacate

Mr. Vijay Raghunath Biwalkar, B6/1/10 Doodhsagar Chs.,Ciba Road, Goregaon (East), Mumbai 400 063 Vs. ACIT, Circle 15(3),Room No.122, 1st Floor, Matru Mandir, Grant Road, Mumbai - 400007
December, 01st 2015
                         MUMBAI BENCH "F", MUMBAI


                                 ITA No.4759/M/2012
                               Assessment Year: 2007-08

           Mr. Vijay Raghunath Biwalkar,       ACIT, Circle 15(3),
           B6/1/10 Doodhsagar Chs.,            Room No.122, 1st Floor,
           Ciba Road,                      Vs. Matru Mandir,
           Goregaon (East),                    Grant Road,
           Mumbai ­ 400 063                    Mumbai - 400007
           PAN: AAIPB 3804F
                (Appellant)                         (Respondent)

      Present for:
      Assessee by                   : Shri Nitesh Joshi, A.R. & Shri Vipul K. Mody, A.R.
      Revenue by                    : Ms. Amrita Singh, D.R.

      Date of Hearing               : 20.08.2015
      Date of Pronouncement         : 30.11.2015


Per Sanjay Garg, Judicial Member:

      The present appeal has been preferred by the assessee against the order
dated 17.04.2012 of the Commissioner of Income Tax (Appeals) [hereinafter
referred to as the CIT(A)] relevant to assessment year 2007-08.

2.    The assessee has taken the following grounds of appeal:
      "1.    The learned Commissioner of Income-tax (Appeals) erred in
      upholding the order o f the Assessi ng Officer di sal lo wi ng busi ness
      loss of Rs.2,50,000/- on sale of fruits.

      It is submitted that the appellant had furnished full and complete details of the sale
      and purchase of fruits. Hence, there is no reason for the learned Commissioner of
      Income-tax (Appeals) to uphold the disallowance.

      2.       The learned Commissioner of Income-tax (Appeals) erred in upholding
                                         2                                ITA No.4759/M/2012
                                                                  Mr. Vijay Raghunath Biwalkar

      the order of the Assessing Officer treating compensation of Rs.1,42,000/- for
      alternate accommodation as revenue receipt instead of capital receipt.

      It is submitted that the amount received on the alternate accommodation is
      capital in nature and not exigible to tax.

      The conclusion arrived at by the learned Commissioner of Income-tax
      (Appeals) and by the Assessing Officer is arbitrary and contrary to the law.

      3.     The Appellant reserves the right to add to, alter or amend the grounds of

3.    Ground No.1 relates to the disallowance of business loss of
Rs.2,50,000/- on sale of mangoes. The assessee purchased the mangoes for
Rs.8,50,000/- from one Avdhut Kale.            The payment was made through
ckeques/banking channel. The assessee sold the said mangoes to M/s. Jaimeel
Export for Rs.6 lakhs and hence suffered a loss of Rs.2,50,000/-.                      The
Assessing Officer (hereinafter referred to as the AO) disallowed the said loss
observing that the assessee could not file the necessary evidence/confirmations
from the parties regarding the said loss. During the appellate proceedings
before the Ld. CIT(A), the assessee filed additional evidences upon which a
remand report was called upon from the AO. The AO issued notices under
section section 133(6) to the party from which the mangoes were purchased
and also to the party to whom the mangoes were sold. The notice issued to
Avdhut Kale from whom the mangoes were purchased was received back
unserved. Whereas, the notice issued to M/s. Jaimeel Export to whom the
mangoes were sold was served but the said party did not comply with the
notice. The AO under such circumstances reported that the addition is to be
confirmed and the Ld. CIT(A) acted accordingly.

4.    The Ld. A.R. has invited our attention to the bill-cum-receipt said to be
issued by Avdhut Kale stating that he had sold the mangoes to the assessee for
                                        3                               ITA No.4759/M/2012
                                                                Mr. Vijay Raghunath Biwalkar

a sum of Rs.8,50,000/-. It is admitted fact on the file that the payment of
Rs.8,50,000/- was paid by the assessee through different cheques for the
amount of Rs.4 lakhs, Rs.3 lakhs and Rs.1.50 lakhs respectively. The Ld. A.R.
of the assessee has brought our attention to the invoice issued by the assessee
to M/s. Jaimeel Export for the above said mangoes for a lump sum amount of
Rs.9,25,000/-. The Ld. A.R. has further invited our attention to the letter dated
15.07.06 issued by M/s. Jaimeel Export showing the payment of Rs.6 lakhs by
way of two different cheques to the assessee. It has also been mentioned that
since there was a discrepancy found in the quality of mangoes, hence the less
payment was made to the assessee. We find from the record that the assessee
has submitted the documents which he was supposed to submit to prove the
loss in mangoes. Moreover, the nature of the product being perishable in
nature and also the export of which depends upon the very quality/species of
the mangoes, it is quite probable that the assessee might not have received the
billed amount and had suffered a loss of Rs.2,50,000/-. We therefore do not
find any justification on the part of lower authorities in rejecting the claim of
loss of the assessee and the same is therefore set aside.

5.    Ground No.2 is relating to the treatment of compensation of
Rs.1,42,000/- received by the assessee for alternate accommodation.
Admittedly, the said amount was received by the assessee on account of
compensation from builder who was reconstructing the building of the society
where the assessee was a member. The lower authorities have treated the same
as revenue expenditure only on the ground that the assessee had not used the
said compensation for an alternative accommodation. We are of the view that
it is not the use of the compensation amount but it is the nature of the receipt in
the hands of the assessee which, in our view, is capital in nature and not a
revenue nature. This ground is accordingly allowed in favour of the assessee.
                                              4                               ITA No.4759/M/2012
                                                                      Mr. Vijay Raghunath Biwalkar

6.       In the result, the appeal of the assessee is hereby allowed.

                  Order pronounced in the open court on 30.11.2015.

          Sd/-                                                  Sd/-
  (D. Karunakara Rao)                                      (Sanjay Garg)
ACCOUNTANT MEMBER                                       JUDICIAL MEMBER

Mumbai, Dated: 30.11.2015.
* Kishore, Sr. P.S.

Copy to: The Appellant
        The Respondent
        The CIT, Concerned, Mumbai
        The CIT (A) Concerned, Mumbai
        The DR Concerned Bench
//True Copy//                             [

                                                  By Order

                                 Dy/Asstt. Registrar, ITAT, Mumbai.
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