Case Law Details
Smt Vimladevi Parasmal Jain Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai ruled in favor of Smt. Vimladevi Parasmal Jain, allowing her appeal against an order by the National Faceless Appeal Centre (CIT(A)) related to the assessment year 2014-15. The case involved a delayed appeal, which was condoned based on judicial principles favoring substantial justice over procedural technicalities. The primary issue concerned an addition made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, alleging that the assessee had unaccounted income from the sale of shares. However, the assessee contended that she incurred a loss of ₹37,932 instead of the claimed capital gain of ₹10,12,375. Supporting documents, including transaction statements from Nirmal Bang Securities, were submitted to substantiate the loss.
After reviewing the evidence, the ITAT found that no amount of ₹10,12,375 was credited in the books of accounts, making Section 68 inapplicable. Additionally, the tribunal noted that the CIT(A) incorrectly invoked Section 69A instead of Section 68, further weakening the case against the assessee. Citing relevant case laws, including CIT vs. Bhaichand N. Gandhi and Anand Ram Raitani vs. CIT, the ITAT concluded that the tax addition was unjustified and directed its deletion. The appeal was thus allowed, and the ruling reaffirmed the necessity for tax authorities to base additions on properly examined financial records and legal provisions.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order 06.02.2024, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (‘Ld. CIT(A)’) for the assessment year 2014-15.
2. There is a delay in filing the appeal, and in this regard, the assessee has requested for the condonation of delay and the reasons given are supported by an affidavit.
3. After having heard the counsels for both the parties and going through the contents of the application for seeking condonation of delay and also taking into consideration the principles as laid down by Hon’ble Supreme Court in the case of Land Acquisition Collector Mst. Katiji & Ors., [1987] AIR 1353 (SC) wherein it has been held that where substantial justice is pitted against technicalities of non deliberate delay, then in that eventuality the cause of substantial justice is to be preferred.
4. Thus, considering these principles and also taking into account that the application for seeking condonation of delay is supported by an Whereas, on the contrary no affidavit has been filed by the department to rebut or controvert the facts, contained in the affidavit filed by the assessee. Therefore the contention of the affidavit filed by the assessee went un-rebutted. Considering the totality of facts and legal preposition as discussed above, the delay in filing the appeals stands condoned.
5. Ground 1 & 2 raised by the assessee relates to challenging the order of Ld. CIT(A) in confirming the additions made by the AO. Therefore I have decided to take up both these grounds jointly and dispose of the same through the present consolidated order.
6. I have heard the counsels for both the parties and have also perused the material placed on record, judgement cited before me and the orders passed by the revenue authorities.
7. As per the facts of the present case, assessee has shown exempt income under section 10(38) of the Act of 10,12,375/- in his return of income from sale of shares of M/s DMC Education, however, AO was of the view that income chargeable to tax has escaped assessment. Therefore, initiated proceedings under section 148 of the Act .
8. AR drawn my attention to the fact that the assessee has not earned long term capital gain rather on the contrary made loss of Rs. 37,932/- and in this regard referred to page number 11 and 12 of the paper book which contains statement of purchases and sales of shares of DMC international Ltd and statement with effect from 01.04.2010 to 31.03.2011 of Nirmal Bang securities Private Limited through which shares were purchased and sold.
9. After analyzing the documents placed on record I found that assessee suffered loss of 37,932/- instead of gain.
Even otherwise the assessee has not maintained books of account and credit of Rs.10,12,375/- has not been found credited in the books of accounts. Therefore in my view, the provisions of section 68 of the act are not applicable where the assessee has not maintained books of accounts and the same is not found credited in the books of accounts. For this proposition, I rely upon the following case laws:
1. Cit Vs Bhaichand N Gandhi, 141 ITR 67 (BOM)
2. Anand Ram Raitani CIT, 223 ITR 544
3. Smt Shanti Devi CIT, 171 ITR 532
4. Smt Manasi Mahendra Pitkar, ITA 4223 of 2015
5. ITO Kamal Kumar Mishra ITA No. 398/LKW/2012.
10. I also found that no amount 10,12,375/- has been found credited in the books of account, therefore, no addition could have been made under section 68 of the act by the Ld.AO. Even otherwise Ld. CIT(A) while dealing with the appeal of the assessee adjudicated the provisions of section 69A instead Sec. 68 of the Act. Therefore the impugned order of CIT(A) is contrary to the provisions of law. Thus, the order of Ld. CIT(A) is not sustainable and consequently as discussed above the additions made by the AO are directed to be deleted.
11. In the result the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 28.01.2025.
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