PRIYANKA CHOPRA, MUMBAI v. ACIT CIR 11(1), MUMBAI

ITA 4045/MUM/2009 | 2004-2005
Pronouncement Date: 10-12-2010 | Result: Allowed

Appeal Details

RSA Number 404519914 RSA 2009
Assessee PAN ACXPC1741V
Bench Mumbai
Appeal Number ITA 4045/MUM/2009
Duration Of Justice 1 year(s) 5 month(s) 10 day(s)
Appellant PRIYANKA CHOPRA, MUMBAI
Respondent ACIT CIR 11(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 10-12-2010
Date Of Final Hearing 23-11-2010
Next Hearing Date 23-11-2010
Assessment Year 2004-2005
Appeal Filed On 30-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI BEFORE SHRI R.S.SYAL ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 4045/MUM/2009 (ASSESSMENT YEAR: 2004-05) PRIYANKA CHOPRA 901 KARAN APARTMENTS 20 LOKHANDWALA COMPLEX ANDHERI(W) MUMBAI-400053 APPELLANT PAN: ACXPC1741 VS ACIT CIR 11(1) CENTRAL CIRCLE 23 MUMBAI. . RESPONDENT ITA NO. 2019/MUM/2010 (ASSESSMENT YEAR: 2004-05) PRIYANKA CHOPRA APPELLANT PAN: ACXPC1741 VS ACIT CIR 11(1) CENTRAL CIRCLE 23 MUMBAI. . RESPONDENT APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI MAYANK PRIYA DARSHI O R D E R PER VIJAY PAL RAO JM ITA NO. 4045/MUM/2009 IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORD ER DATED 16.03.2009 OF THE LEARNED CIT(A) ARISING FRO M THE ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 2 ASSESSMENT ORDER PASSED U/S 143(3) READ WITH SECTIO N 263 OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 20 04-05. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN TH IS APPEAL: 1. THE ASSESSMENT ORDER PASSED BY THE AO IS ILLEGAL AND BAD IN LAW; 2. THE LD. CIT(A) HAS ERRED IN NOT GIVING RELIEF AMOUNTING TO RS.5 00 000 BEING AMOUNT OF LOAN RECEIVED WRONGLY ASSESSED AS INCOME OF THE APPELLANT; 3. THE LD. CIT(A) HAS ERRED IN SUSTAINING ADDITION AMOUNTING TO RS.91 881/- ON ACCOUNT OF CAR INSURAN CE PAID BY THE APPELLANT ON THE GROUND THAT THIS ADDIT ION HAS BEEN MADE FOLLOWING THE DIRECTION OF THE CIT U /S 263 AND THEREFORE THE CIT CANNOT SIT OVER JUDGMENT ON THE DECISION OF THE CIT 3. GROUNDS OF APPEAL NO.1 IS GENERAL IN NATURE AND SINCE NO SPECIFIC MATERIAL WAS BROUGHT ON RECORD TO SUBSTAN TIATE THIS GROUND BEFORE US EXCEPT GROUNDS OF APPEAL NO.2 AND 3. THEREFORE NO SEPARATE ADJUDICATION IS REQUIRED IN RESPECT OF GROUNDS NO.1 AS THE SAME IS DEPENDENT ON THE OUTCOM E OF THE GROUNDS OF APPEAL NO.2 AND 3 AND ACCORDINGLY DISMIS SED AS ACADEMIC IN NATURE. 4. GROUNDS OF APPEAL NO.2 REGARDING RELIEF CLAIMED BY THE ASSESSEE OF RS.5 LAKHS BEING THE AMOUNT OF LOAN REC EIVED WAS WRONGLY ASSESSED AS INCOME OF THE ASSESSEE. ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 3 5. BRIEF FACTS RELATED TO THIS GROUND ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 1.11.2004 SHOWING TO TAL INCOME OF RS.1 00 77 620/-. THE ASSESSMENT WAS COMPLETED U /S 143(3) VIDE ORDER DATED 28.08.2006. SUBSEQUENTLY THE COMMISSIONER OF INCOME TAX PROPOSED TO REVISE THE ASSESSMENT BY ISSUING A SHOW CAUSE NOTICE U/S 263 DATED 3.11.2006. THE COMMISSIONER HAS PROPOSED THE REVIS ION OF THE ASSESSMENT MERELY ON TWO GROUNDS AS UNDER: I) IT IS OBSERVED FROM THE RECORDS THAT THE ASSESSEE HAS TAKEN A LOAN OF RS.30 LAKHS FROM SHR I NAVINCHANDRA DISTRIBUTORS PVT LIMITED AND HAS BEEN USED FOR INVESTMENT IN HOUSE PROPERTY. HOWEVER IT APPEARS FROM THE RECORD THAT ENQUIRIES REGARDING HE GENUINENESS OF THE ABOVE LOAN HAS NOT BEEN MADE; II) IT IS ALSO SEEN FROM THE RECORDS THAT THE ASSESSEE HA ACQUIRE A NEW MERCEDES CAR DURING THE PREVIOUS YEAR ON ACCOUNT OF WHICH AN ADDITION OF RS .35M19 610/- HAS BEEN MADE TO THE FIXED ASSETS UNDER THE HEAD MOTOR CARS. HOWEVER FROM THE DETAILS FURNISHED DURING THE COURSE OF ASSESSMENT IT IS SEEN THAT THE INSURANCE PAID OF RS.91 881/- HAS BEEN CLAIMED AS REVENUE EXPENDITURE AND NOT CAPITALIZED TO THE COT OF ASSET. SINCE EXPENDITUR E INCURRED IN CONNECTION WITH THE ACQUISITION OF THE NEW ASSET TILL IT IS PUT TO USE HAS TO BE CAPITALIZED THE CLAIM OF THE ASSESSEE OF THE INSURANCE PAYMENT AS REVENUE IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE 6. CONSEQUENTLY THE COMMISSIONER HAS PASSED THE REVISION ORDER DATED 19.02.2008 WHEREBY THE ASSESSM ENT WAS SET ASIDE ON THE ISSUE OF LOAN AND INSURANCE & DEP RECIATION ON MOTOR CAR (MERCEDES CAR) WITH THE DIRECTION TO THE AO FOR CARRYING OUT INVESTIGATION INTO THE CASH CREDIT AND TO VERITY THE ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 4 CLAIM OF INSURANCE & DEPRECIATION IN RESPECT OF MER CEDES CAR. SUBSEQUENTLY THE REVISED ASSESSMENT ORDER DATED 3. 12.2008 WAS PASSED AS PER THE DIRECTION OF COMMISSIONER. WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) READ WITH S ECTION 263 OF THE ACT THE AO HAS ACCEPTED THE CLAIM OF RS .30 LAKHS AS LOAN AS WELL AS THE DEPRECIATION ON THE NEW MERCEDE S CAR. HOWEVER THE AO HAS DISALLOWED THE CLAIM OF CAR ISSURANCE OF RS.9 188/- ON THE GROUND THAT INSURANCE COST W HICH INCURRED WITH THE ACQUISITION OF NEW ASSETS BEFORE IT IS PUT TO USE AND THEREFORE THE SAME HAS TO BE CAPITALIZED. 7. AGGRIEVED BY THE ORDER OF THE AO PASSED U/S 143 (3) READ WITH SECTION 263 THE ASSESSEE FILED THE APPEA L BEFORE THE CIT(A) AND CHALLENGED THE NON-ACCEPTANCE OF THE CLA IM OF THE ASSESSEE OF RS.5 LAKHS ADMITTED AS PROFESSIONAL INC OME WHICH IN FACT IS A LOAN ALONG WITH THE DISALLOWANC E OF INSURANCE CLAIM ON MERCEDES CAR. THE CIT(A) DEC LINED TO ACCEPT THE CLAIM OF THE ASSESSEE REGARDING RS. 5 LA KHS BEING LOAN AMOUNT AND NOT INCOME BY FOLLOWING THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ(INDIA) L TD REPORTED IN (2006) 284 ITR 323(SC) AND HELD THAT TH E ASSESSEE CANNOT BE GRANTED THE BENEFIT BY THE FI RST APPELLATE AUTHORITY OF CLAIM WITHOUT FILING THE REVISED RETU RN OF INCOME. 8. BEFORE US THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS MISTAKENLY ADMITTED RS.5 ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 5 LAKHS AS PROFESSIONAL INCOME INSTEAD OF SHOWING AS PART OF THE LOANS. HE HAS SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN CONSEQUENCE TO THE REVISION ORDER PA SSED BY THE CIT U/S 263 THE ASSESSEE HAS SPECIFICALLY MADE A CLAIM AND EXPLAIN THAT THE ASSESSEE HAS TAKEN A LOAN OF RS.35 LAKHS FROM SHRI NARAINDAS MAKHIJA OF NAVCHITRA DISTRIB UTORS P LTD. HE HAS REFERRED THE DETAILS GIVEN BY THE ASSESSEE IN THE LETTER DATED 20.10.2008 AS REPLY TO THE NOTICE ISSUED BY T HE AO DATED 7.10.2008 AND SUBMITTED THAT THE ASSESSEE HAS GIVEN ALL THE DETAILS OF LOANS TAKEN BY THE ASSESSEE ON TOTAL AMOUNT OF RS.35 LAKHS. THESE DETAILS INCLUDED THE CHEQUES D ATES AND AMOUNT ON DIFFERENT DATES AND ALL THEE CHEQUES WERE DEPOSITED BY THE ASSESSEE IN THE UTI BANK ACCOUNT NO.70869. THE AO HAS VERIFIED THE CLAIM OF THE ASSESSEE DURING THE REMAND PROCEEDINGS AS ORDERED BY THE COMMISSIONER. VIDE T HE REMAND REPORT DATED 4.3.2009 THE AO HAS ACCEPTED THE CLAIM OF THE ASSESSEE AS FACTUALLY CORRECT AND VALID ABO UT THE LOAN OF RS.35 LAKHS AND SPECIFICALLY RS.5 LAKHS WAS TR EATED AS REVENUE RECEIPT WHICH WAS IN FACT LOAN. THE LD. AR HAS SUBMITTED THAT THE CIT(A) ISSUED A REMAND ORDER D ATED 3.02.2009 FOR VERIFICATION OF THE CLAIM REGARDING T HE LOAN OF RS.30 LAKHS AND RS.5 LAKHS FROM SHRI NARAINDAS MAK HIJA. THE AO AFTER VERIFICATION HAS ACCEPTED THE CLAIM OF THE ASSESSEE VIDE REMAND REPORT. THEREFORE IN PRINCIPAL THE C IT (A) ACCEPTED THE CLAIM OF THE ASSESSEE BUT THE CIT(A) HAS ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 6 DISALLOWED THE SAME ON TECHNICAL GROUND BY REFERRI NG THE DECISION OF THE HON. SUPREME COURT IN THE CASE OF G OATZ INDIA LIMITED (SUPRA). THE LD. DR HAS SUBMITTED THAT AS PER THE DECISION OF THE HON. SUPREME COURT BAR FOR ENTERTA INING THE CLAIM WITHOUT FILING THE REVISED RETURN IS RESTRICT ED TO THE POWERS OF THE AO AND NOT THE POWERS OF THE APPELLAT E AUTHORITY. THEREFORE THE CIT(A) HAS MISUNDERSTOOD THE DECISION OF THE HON. SUPREME COURT AND ACCORDINGLY TAKEN THE INCORRECT VIEW. HE HAS REFERRED VARIOUS DECISIONS O F THIS TRIBUNAL IN WHICH THIS TRIBUNAL AS WELL AS THE HON . HIGH COURTS HAS CONSIDERED THE DECISION OF THE HON. APEX COURT IN THE CASE OF GOATZ INDIA. THUS THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE CLAIM OF THE ASSESS EE SHOULD HAVE BEEN ALLOWED BY THE CIT(A) WHILE PASSING THE IMPUGNED ORDER. ACCORDINGLY HE HAS PLEADED THAT THE CLAIM OF THE ASSESSEE REGARDING THE LOAN AMOUNT OF RS.5 LAKHS WR ONGLY ADMITTED AS INCOME IN THE RETURN OF INCOME BE ALLO WED BY THIS TRIBUNAL. THE LEARNED AR HAS SUBMITTED THAT THE A SSESSEE HAS FILED THE RECTIFIED INCOME AND EXPENDITURE STAT EMENT AS WELL AS COMPUTATION OF TOTAL INCOME BEFORE THE AO D URING THE PROCEEDINGS U/S 143(3) R.W.S. 263. 9. ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED THAT THE FRESH CLAIM HAS BEEN MADE BY THE ASSESSEE AFTER EXPIRY OF FOUR YEARS FROM THE FILING OF THE ORIGINAL RETURN OF INCOME. ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 7 THEREFORE THE CLAIM OF THE ASSESSEE CANNOT BE ALLO WED IN ABSENCE OF REVISED RETURN AND PARTICULARLY IN THE P ROCEEDINGS U/S 263. HE HAS VEHEMENTLY CONTENDED THAT THE J URISDICTION OF THE AO WHILE PASSING THE ASSESSMENT ORDER IN TE RMS OF THE ORDER PASSED U/S 263 IS LIMITED TO THE ISSUE WHICH WAS A SUBJECT MATTER OF THE ORDER U/S 263 AND THE AO CANN OT ENTERTAIN THE NEW ISSUE WHICH WAS NOT DIRECTED BY THE COMMISSIONER FOR VERIFICATION AND ADJUDICATION. TH US THE LEARNED DR HAS SUBMITTED THAT THIS CLAIM CANNOT BE ALLOWED WITHOUT FILING THE REVISED RETURN. 10. IN REBUTTAL THE LEARNED AR HAS SUBMITTED THAT THE COMMISSIONER OF INCOME TAX WHILE PASSING THE REVIS ION U/S 263 DIRECTED THE AO TO VERIFY THE ISSUE OF LOAN IN SURANCE AND DEPRECIATION THEREFORE THE ENTIRE ISSUE OF LOAN W AS REQUIRED TO BE EXAMINED BY THE AO AND THE CLAIM OF THE ASSE SSEE IS WELL WITHIN THE SCOPE OF DIRECTIONS GIVEN BY THE COMMISSIONER OF INCOME TAX IN THE ORDER DATED 19.02.2008 PASSED U/S 263 OF THE ACT. 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE H AS ADMITTED THE AMOUNT OF RS.5 LAKHS AS PROFESSIONAL INCOME IN THE RETURN OF INCOME WHICH WAS TURNED OUT TO BE A LOAN AMOUNT AS ACCEPTED BY THE A.O. IN THE REMAND REPORT DATED 04. 03.2009. ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 8 IT IS EVIDENT FROM THE IMPUGNED ORDER OF CIT(A) THA T THE CLAIM OF THE ASSESSEE WAS ACCEPTED IN PRINCIPLE IN VIEW O F THE REMAND REPORT OF THE A.O. BUT THE SAME WAS DISALLOW ED ON THE GROUND THAT WITHOUT REVISED RETURN OF INCOME THE SA ME CANNOT BE ALLOWED. THE CIT(A) HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE GOATZ INDIA LIMITED (SUPRA). IT IS TRUE THAT HONBLE SUPREME COURT IN CASE GOATZ INDIA LIMI TED (SUPRA) HELD THAT THE A.O CANNOT ENTERTAIN THE FRES H CLAIM OTHERWISE THAN BY FILING THE REVISED RETURN OF INCO ME. HOWEVER HONBLE SUPREME COURT HAS CLARIFIED THE POSITION IN PARA 4 OF THE SAID DECISION THAT THE MANDATE OF THE DECISION IS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT I MPINGE ON THE POWER OF THE TRIBUNAL UNDER SECTION 254 OF THE ACT. THEREFORE WHEN ON THE MERITS THE REVENUE HAS ACCEP TED THE CLAIM OF THE ASSESSEE THAN WE DO NOT FIND ANY REASO N TO DISALLOW THE SAME ON TECHNICAL GROUND OF LIMITATION OF THE POWER OF THE ASSESSING AUTHORITY. ACCORDINGLY WE A LLOW THE CLAIM OF THE ASSESSEE OF RS.5 LAKHS AS LOAN AMOUNT AND WRONGLY ASSESSED AS INCOME. 13. GROUND NO. 2 OF THE APPEAL IS ALLOWED. 14. GROUND NO.3 REGARDING THE DISALLOWANCE OF CLAI M OF INSURANCE ON MOTOR CAR. THE AO HAS DISALLOWED THE CLAIM OF INSURANCE WHILE PASSING THE ORDER U/S 143(3) RWS 26 3 BY ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 9 TREATING THE SAID EXPENDITURE AS PART OF COST OF TH E ASSETS AND THEREFORE CAPITALIZED THE SAME. IT IS EVIDENT FROM THE REVISION ORDER PASSED U/S 263 THAT THE COMMISSIONER HAS SPEC IFICALLY DIRECTED THE AO TO VERIFY WHETHER CAR WAS USED DURI NG THE YEAR OR NOT AND IN CASE THE CAR WAS USED IN THE FINANCIA L YEAR THE INSURANCE AND THE DEPRECIATION MAY BE ALLOWED. ONC E THE CLAIM OF DEPRECIATION HAS BEEN ALLOWED BY THE AO ON THE BASIS THAT THE CAR WAS USED DURING THE FINANCIAL YEAR THE N THE DISALLOWANCE OF INSURANCE CLAIM IS CONTRARY TO THE VIEW TAKEN BY THE COMMISSIONER WHILE PASSING THE REVISION ORDE R. EVEN OTHERWISE INSURANCE ON THE CAR CANNOT BE TREATED A S PART OF THE COST OF THE ACQUISITION THE INSURANCE IS PAID IN ADVANCE FOR ONE YEAR AT THE TIME OF PURCHASE OF THE CAR AS PER THE REQUIREMENT OF MOTOR VEHICLE ACT. EVEN OTHERWISE TH E INSURANCE PREMIUM IS PAID FOR RISK COVER FOR A PERI OD OF ONE YEAR AND PAID IN ADVANCE AT THE BINGING OF THE YEAR THEREFORE THE PREMIUM IS PAID FOR A FUTURE PERIOD OF ONE YEAR AND CANNOT BE TREATED PART OF COST OF THE VEHICLE. THE A.O. HA S WRONGLY TREATED THE SAME AS EXPENDITURE PRIOR TO USE. AS PE R MOTOR VEHICLE ACT INSURANCE OF VEHICLE FOR THIRD PARTY R ISK REQUIRED BEFORE THE VEHICLE IS BROUGHT ON ROAD/PUBLIC PLACE . THEREFORE INSURANCE PREMIUM PAID ON THE CAR COVERS THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION AND THUS IS A ALLOWABLE REVENUE EXPENDITURE. WE MAY CLARIFY THA T WHILE GRANTING THE DEPRECIATION IF THE INSURANCE AMOUNT HAS BEEN ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 10 INCLUDED IN THE COST OF THE CAR THEN THE SAME SHOU LD BE EXCLUDED FROM THE COST OF THE ASSETS FOR THE PURPOS ES OF GRANTING THE DEPRECIATION IN VIEW OF THE FACT THAT THE INSURANCE CLAIM HAS BEEN ALLOWED. THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 15. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ITA NO. 2019/MUM/2010 THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16.03.2009 OF THE LEARNED CIT(A)-XI MU MBAI FOR THE ASSESSMENT YEAR 2004-05 ARISING FROM THE ASSES SMENT ORDER PASSED U/S 143(3) FOR THE ASSESSMENT YEAR. 16. THERE IS A DELAY OF 240 DAYS IN FILING THE PRE SENT APPEAL. THE ASSESSEE HAS FILED THE APPLICATION FOR CONDONA TION OF DELAY ALONG WITH THE AFFIDAVIT. THE ASSESSEE HAS ALSO FILED THE AFFIDAVIT OF HER REPRESENTATIVE SHRI ANIL SHEK HRI CHARTERED ACCOUNTANT WHO HAD REPRESENTED THE ASSESSEE BEFOR E THE REVENUE AUTHORITIES. 17. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LE ARNED DR AND CAREFULLY PERUSED THE RECORD INCLUDING APPLI CATION OF CONDONATION OF DELAY AS WELL AS AFFIDAVIT IN SUPPOR T THEREOF. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE M AIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THE AS SESSMENT OF ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 11 RS.5 LAKHS AS INCOME IN FACT WHICH IS NOT A PROFE SSIONAL INCOME BUT THE LOAN AMOUNT. THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS BEEN PURSUING THE ISSUE OF DISALLOWANCE OF THE CLAIM OF RS.5 LAK HS WHICH WAS WRONGLY AND INADVERTENTLY ADMITTED AS PROFESSI ONAL INCOME INSTEAD OF SHOWING AS LOAN AMOUNT IN THE PR OCEEDINGS BEFORE THE AO PURSUANCE TO THE ORDER PASSED BY THE CIT UNDER SECTION 263. THE ASSESSEE WAS UNDER BONAFID E BELIEF IN PURSUING THE ISSUE BEFORE THE AO AS WELL AS BEF ORE THE CIT(A) IN THE PROCEEDINGS ARISING FROM THE REVISION ORDER U/S 263. SINCE THERE WAS A MISTAKE IN INCLUDING THE A MOUNT OF RS.5 LAKHS AS PROVISIONAL INCOME AND THE ASSESSEE R EALIZED AFTER THE ORDER PASSED U/S 263 THAT THE SAID AMOUNT OF RS.5 LAKHS IS A LOAN THE ASSESSEE ACCORDINGLY FILED A REVISED STATEMENT OF INCOME BEFORE THE AO WITH A REQUEST TO REDUCE THE PROFESSIONAL RECEIPT BY THE SAID AMOUNT OF RS.5 LAKHS. THE AO DID NOT ACCEPT THE REQUEST OF THE ASSESSEE BY PASSING THE ORDER DATED 3.12.2008 U/S 143(3) R.W.S.263. THE AS SESSEE THEN RAISED ISSUE BEFORE THE CIT(A) AGAINST THE OR DER U/S 143(3) R.W.S.263 BUT THE CIT(A) HAS ALSO REJECTED T HE CLAIM OF THE ASSESSEE IN VIEW OF THE DECISION OF THE HON. S UPREME COURT IN THE CASE OF GOETZ(INDIA) LTD REPORTED IN 2 006 284 ITR 323(SC). THE LEARNED AR HAS SUBMITTED THAT THE ASSESSEE HAS DONE EVERY THING POSSIBLE FOR THE LEGA L PROCEEDINGS AS PER THE ADVICE OF HER REPRESENTATIVE AND ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 12 THEREFORE THE APPEAL AGAINST THE IMPUGNED ORDER WAS NOT FILED BY THE ASSESSEE BECAUSE THE ASSESSEE WAS ADVISED TH AT THIS ISSUE HAS TO BE ADJUDICATED IN THE APPEAL FILED AGA INST THE ORDER OF THE CIT(A) ARISING FROM THE ORDER PASSED U NDER SECTION 143(3) R.W. SECTION 263 OF THE ACT. THUS THE ASSESSEE DID NOT FILE THE APPEAL AGAINST THE ORDER OF THE CIT(A) ARISING FROM THE ORIGINAL ASSESSMENT U/S 143 (3). LATER ON THE ASSESSEE HAS BEEN ADVISED BY THE REPRESENT ATIVE ENGAGED TO APPEAR IN THE APPEAL BEFORE THIS TRIBUN AL IN ITA NO.4045/MUM/2009 THAT THIS PARTICULAR ISSUE REGARDI NG THE AMOUNT OF RS.5 LAKHS WRONGLY INCLUDED IN THE PROFE SSIONAL INCOME SHOULD HAVE ALSO BEEN RAISED IN THE APPEAL TO BE FILED AGAINST THE IMPUGNED ORDER FOR THE SAKE O ABUNDANT PRECAUTION. ACCORDINGLY THE ASSESSEE TOOK THE STEPS AND FILED THE PRESENT APPEAL BUT BY THE THAT TIME THERE WAS A DELAY OF 240 DAYS. THE LEARNED AR HAS SUBMITTED THAT THE DE LAY IN FILING THE PRESENT APPEAL IS DUE TO THE BONAFIDE BE LIEF AND MISTAKE ON THE PART OF THE REPRESENTATIVE OF THE AS SESSEE AND THEREFORE THE DELAY IS DUE TO PURSUING THE ISSUE IN THE OTHER PROCEEDINGS WHICH IS A SUFFICIENT CAUSE FOR CONDONA TION OF THE DELAY. HE HAS RELIED UPON THE FOLLOWING DECISIONS: 1 318 ITR (AT) 356(MUM) DR.MRS.SUDHA S TRIVEDI V/S ITO 2 (39 TTJ 54) (AHD) SAKAR PATEL VIBHAG JUNGLE KAMDAR SAHAKARI MANDLI LTD V/S ITO 3 100 ITD 87 (CHENNAI) PEOPLE EDUCATION AND ECONOMIC DEVELOPMENT SOCIETY V/S ITO ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 13 4 167 ITR 471(SC) COLLECTOR LAND ACQUISITION V/S MST KATJI 5 (1998) 7SCC 123) N BALAKRISHNAN V. M KRSIHNAMURTHY 18. THE LEARNED AR HAS PLEADED THAT THE DELAY WAS NOT BECAUSE OF ANY MALAFIDE OR DELIBERATE INTENTION B UT DUE TO PURSUING THE LEGAL REMEDY IN THE OTHER PROCEEDINGS AND ACTING UNDER THE BONAFIDE BELIEF THAT THE REPRESENTATIVE OF THE ASSESSEE WAS CORRECTLY ADVISING THE ASSESSEE AND SUBSEQUENTLY COUNSEL WHO IS REPRESENTING BEFORE TH IS TRIBUNAL HAS ADVISED TO FILE THE APPEAL. 19. ON THE OTHER HAND THE LEARNED DR HAS VEHEMENTL Y OPPOSED THE CONDONATION OF DELAY AND SUBMITTED THAT THIS IS AN INORDINATE DELAY IN FILING THE APPEAL AND THE ASSES SEE WAS AVAILING ALL PROFESSIONAL SERVICES AVAILABLE TO HER . THEREFORE THE DELAY HAS NOT BEEN PROPERLY EXPLAINED BY THE AS SESSEE. 20. AFTER CONSIDERING THE RIVAL CONTENTIONS AND THE RELEVANT MATERIAL WE FIND THAT THE ASSESSEE WAS AGITATING THE ISSUE OF INCLUSION OF RS.5 LAKHS AS PROFESSIONAL INCOME INS TEAD OF SHOWING AS LOAN IN THE PROCEEDINGS BEFORE THE AO ARISING FROM THE ORDER PASSED BY THE CIT UNDER SECTION 263. THE AO DID NOT ACCEPT THE CLAIM OF THE ASSESSEE WHILE PA SSING THE ASSESSMENT ORDER. SIMILARLY THE CIT(A) HAS ALSO D ECLINED TO ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 14 ACCEPT THE CLAIM OF THE ASSESSEE BY RELYING THE DE CISION OF THE HON. SUPREME COURT IN THE CASE OF GOETZ(INDIA) LTD REPORTED IN 2006 284 ITR 323(SC). WE FURTHER NOTE THAT DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A ) AGAINST THE ORDER PASSED U/S 143(3) R.W.S 263 THE CIT(A) H AS ISSUED A DEMAND ORDER DATED 03.02.2009 FOR VERIFICATION OF T HE CLAIM OF THE ASESEEE REGARDING THE LOAN AMOUNT OF RS..5 LAKH S MISTAKENLY INCLUDED IN THE INCOME AS PROFESSIONAL I NCOME. THE AO IN THE REMAND REPORT DATED 04.03.2009 VERIFI ED THE CLAIM AND FOUND AS VALID. THUS IT IS CLEAR THAT THE ASSESSEE WAS PURSUING THIS ISSUE IN THE ASSESSMENT PROCEED INGS AND APPELLATE PROCEEDINGS ARISING FROM THE ORDER PASSED U/S 263 AND DID NOT RAISE THIS ISSUE BY FILING THE APPEAL A GAINST THE IMPUGNED ORDER ARISING FROM THE ORIGINAL ASSESSMENT ORDER. THE ASSESSEE HAS SUPPORTED HER EXPLANATION BY WAY O F FILING THE AFFIDAVIT AS WELL AS THE AFFIDAVIT OF SHRI ANI L SIKHARI CA. IT IS STATED IN THE AFFIDAVIT BY THE REPRESENTATI VE THAT HE HAS ADVISED THE ASSESSEE TO FILE APPEAL ONLY AGAINST TH E ORDER ARISING FROM THE ORDER U/S 263 PROCEEDINGS AND RAIS E THIS ISSUE. THEREFORE THE ASSESSEE WAS NOT ADVISED TO F ILE THE APPEAL AGAINST THE IMPUGNED ORDER ARISING FROM THE ORIGINAL ASSESSMENT ORDER. IT IS SETTLED LAW THAT WHILE DECI DING THE CONDONATION OF DELAY THE COURT SHOULD TAKE A LENI ENT VIEW. THE MISTAKE ON THE PART OF THE COUNSEL MAY IN CERT AIN CIRCUMSTANCES BE TAKEN INTO ACCOUNT IN DEALING IN DELAY. ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 15 THERE IS NO GENERAL PROPOSITION THAT MISTAKE OF COU NSEL ITSELF IS ALWAYS A SUFFICIENT GROUND. IT IS ALWAYS A QUE STION WHETHER THE EXPLANATION AND REASONS FOR DELAY WAS BONAFIDE OR WAS MERELY DEVISE TO COVER AN ULTERIOR PURPOSE SUCH A S LATCHES ON THE PART OF THE LITIGANT OR AN ATTEMPT TO SAVE LIMITATION IN AN UNDERHAND WAY. NO DOUBT THE ASSESSEE HAS TO B ELIEVE AND REPOSE FAITH IN THEIR REPRESENTATIVE/ADVOCATE A FTER HAVING PAID THE FEE AND GIVEN THE REQUISITE INSTRUCTIONS T O HIS/HER REPRESENTATIVE. A LITIGANT MAY BE JUSTIFIED IN BE LIEVING THAT HIS/HER REPRESENTATIVE WOULD DISCHARGE HIS PROFES SIONAL OBLIGATION. THEREFORE IN THE CASE WHERE IT IS BROU GHT ON RECORD THAT THE PARTY HAS DONE EVERYTHING IN ITS POWER WHI CH IS NECESSARY FOR LEGAL PROCEEDINGS THE COURT SHOULD B E LIBERAL IN CONSIDERING THE SUFFICIENT CAUSE AND SHOULD LIEN IN FAVOUR OF SUCH PARTY. HOWEVER THE LITIGANT DOES NOT STAND TO BENEFIT BY FILING AN APPEAL AT A BELATED STAGE. WHENEVER SU BSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE OPPOSED TO EACH OTHER CAUSE OF SUBSTANTIAL JUSTICE HAS TO BE PREFERRED. C OURT SHOULD TAKE JUSTICE ORIENTED APPROACH WHILE DECIDING THE A PPLICATION FOR CONDONATION OF DELAY . IT DOES NOT MEAN A LIT IGANT HAS LICENSE TO APPROACH THE COURT AT ITS WILL. 21. IN THE CASE OF N BALAKRISHNAN V/S M KRISHNAMUR THY REPORTED IN (1998) 7 SCC 123 VIDE PARAGRAPHS 9 AND 13 HAVE HELD AS UNDER : ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 16 9. IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A MATTER OF DISCRETION OF THE COURT SECTION 5 OF THE LIMITATION ACT DOES NOT SAY THAT SUCH DISCRETION CA N BE EXERCISED ONLY IF THE DELAY IS WITHIN A CERTAIN LIMIT. LENGTH OF DELAY IS NO MATTER ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. SOMETIMES DELAY OF THE SHORTEST RANGE MAY BE UNCONDONABLE DUE TO WANT OF ACCEPTABLE EXPLANATION WHEREAS IN CERTAIN OTHER CASES DELAY OF VERY LONG RANGE CAN BE CONDONED AS THE EXPLANATION THEREOF IS SATISFACTORY. ONCE THE C OURT ACCEPTS THE EXPLANATION AS SUFFICIENT IT IS THE RES ULT OF POSITIVE EXERCISE OF DISCRETION AND NORMALLY THE SUPERIOR COURT SHOULD NOT DISTURB SUCH FINDING MUC H LESS IN REVERSIONAL JURISDICTION UNLESS THE EXERCI SE OF DISCRETION WAS ON WHOLE UNTENABLE GROUNDS OR ARBITRARY OR PERVERSE. BUT IT IS A DIFFERENT MATTER WHEN THE FIRST CUT REFUSES TO CONDONE THE DELAY. IN SUCH CASES THE SUPERIOR CUT WOULD BE FREE TO CONSIDER T HE CAUSE SHOWN FOR THE DELAY AFRESH AND IT IS OPEN TO SUCH SUPERIOR COURT TO COME TO ITS OWN FINDING EVEN UNTRAMMELED BY THE CONCLUSION OF THE LOWER COURT. 13. IT MUST BE REMEMBERED THAT IN EVERY CASE OF DELAY THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO TUR N DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS N OT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REASONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME T HEN THE COURT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COULD SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETHER. IT MUST B E BORNE IN MIND THAT HE IS A LOOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELINE THAT WHEN COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICANT THE COURT SHALL COMPENSATE THE OPPOSITE PARTY FOR HIS LOSS. 22. FROM THE FACTS AND CIRCUMSTANCE OF THE CASE A S WELL AS FROM THE RECORD WE FIND THAT THE ASSESSEE HAS EXP LAINED SUFFICIENT AND REASONABLE CAUSE FOR NOT TAKING STEP S WITHIN THE ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 17 TIME PRESCRIBED FOR FILING THE APPEAL. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THIS IS FIT CASE FOR CONDONATI ON OF DELAY PARTICULARLY WHEN THE ASSESSEE HAS ALREADY RAISED T HIS ISSUE IN ANOTHER APPEAL ARISING FROM THE PROCEEDINGS U/S 26 3. THEREFORE WE ARE SATISFIED WITH THE EXPLANATION GI VEN BY THE ASSESSEE THAT THERE IS NO MALAFIDE OR WILLFUL MOTIV E ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN TH E TIME. ACCORDINGLY THE DELAY IS CONDONED. 23. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN T HIS APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN PASSING THE APPELLANT ORDER WHICH IS INVALID AND B AD IN LAW: 2. THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSMENT OF RS.5 LAKHS AS PROFESSIONAL RECEIPT WA S NOT IN ACCORDANCE WITH LAW. THE LD. CIT(A) FURTHER OUGHT TO HAVE HELD THAT THE AO WAS NOT JUSTIFIED IN NOT REDUCING THE PROFESSIONAL INCOME BY THE SAID AMOUNT OF RS.5 LAKHS 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCES OF VARIOUS EXPENDITUR E AGGREGATING TO RS.5 72 637/- 4. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN SETTING ASIDE THE ISSUE RELATING TO DEPRECIATION O N CAR TO THE FILE OF THE AO. THE LD. CIT(A) OUGHT TO HA VE ADJUDICATED THE ISSUE AND ALLOWED THE CLAIM AS IT WAS IN ACCORDANCE WITH LAW AND ALL THE FACTS WERE AVAILABLE BEFORE HIM. 5. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND ALTER OR DELETE ALL OR ANY OF THE FORGOING GROUNDS OF APPEAL ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 18 24. AT THE TIME OF HEARING THE LEARNED AR OF THE A SSESSEE HAS STATED THAT THE ASSESSEE DOES NOT PRESS THE GRO UNDS OF APPEAL NO.1 3 4 AND 5 AND THE SAME MAY BE DISMISSED AS NOT PRESSED. 25. THE LD. DR HAS NO OBJECTION IF THESE GROUNDS A RE DISMISSED AS NOT PRESSED. 26. ACCORDINGLY WE DISMISS GROUNDS OF APPEAL NO.1 3 4 AND 5 BEING NOT PRESSED. 27. AS REGARDS GROUNDS OF APPEAL NO.2 SINCE WE HA VE DECIDED THIS ISSUE WHILE DEALING WITH THE ASSESSEE S APPEAL IN ITA NO.4045/MUM/2009 IN FAVOUR OF THE ASSESSEE THE REFORE THE APPEAL OF THE ASSESSEE QUA THIS ISSUE BECOMES INFRUCTUOUS. ACCORDINGLY WE DISMISS THE GROUND NO. 2 OF THE APPEAL OF THE ASSESSEE BEING INFRUCTUOUS. 28. IN SUM AND SUBSTANCE THE APPEAL BEARING ITA NO. 4045/MUM/2009 IS ALLOWED AND APPEAL BEING ITA NO. 2019/MUM/2010 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 10.12.2010 SD SD (R.S.SYAL) (VIJ AY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 10 TH DEC 2010 SRL:291110 ITA NO. 4045/MUM/2009 ITA NO. 2019/MUM/2010 19 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI