BALAJI TRADING CORPORATION, MUMBAI v. ACIT -17 (1), MUMBAI

ITA 5198/MUM/2019 | 2015-2016
Pronouncement Date: 19-03-2021 | Result: Partly Allowed

Appeal Details

RSA Number 519819914 RSA 2019
Assessee PAN AAIFB2537M
Bench Mumbai
Appeal Number ITA 5198/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 11 day(s)
Appellant BALAJI TRADING CORPORATION, MUMBAI
Respondent ACIT -17 (1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 19-03-2021
Last Hearing Date 04-03-2021
First Hearing Date 04-03-2021
Assessment Year 2015-2016
Appeal Filed On 07-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI VIKAS AWASTHY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5198/MUM/2019 ASSESSMENT YEAR: 2015-16 BALAJI TRADING CORPORATION 311 3 RD FLOOR SUJATA CHAMBERS ABHAYCHAND GANDHI MARG OPP KATHA BAZAR NR. MASJID (W) STATION MUMBAI-400 009. VS. COMMISSIONER OF INCOME TAX- 17(1) ROOM NO. 117 AAYAKAR BHAVAN M.K. ROAD MUMBAI-400020. PAN NO. AAIFB 2537 M APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MR. SANJAY J. SETHI DR DATE OF HEARING : 04/03/2021 DATE OF PRONOUNCEMENT : 19/03/2021 ORDER PER N.K. PRADHAN A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2015-16. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-28 MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX A CT 1961 (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 04.03.2021 NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE BENCH ON THE ABOVE DATE. AS THERE IS NON-COMPLIANCE BY THE ASSES SEE WE ARE PROCEEDING BALAJI TRADING ITA NO. 5198/M/2019 2 TO DISPOSE OFF THIS APPEAL AFTER EXAMINING THE MATE RIALS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATI VE (DR). 2. THE GROUND OF APPEAL FILED BY THE ASSESSEE READS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE IN COME TAX OFFICER HAS ERRED IN CONSIDERING THE AMOUNT OF STAMP DUTY PAID ON SHOP A ND ADDED TO TOTAL TAXABLE INCOME. THE AMOUNT OF STAMP DUTY WAS PAID BY THE AS SESSEE AT THE TIME OF TRANSFERRED OF SHOP TO RETIRED PARTNER (MR. GANESH SHALIGRAM PATIL A RETIRING PARTNER). TOTAL STAMP DUTY PAID ON TRANSFER PROPERT Y WAS RS.5 16 900/- OUT OF THIS STAMP DUTY WAS RS.2 62 500/- AND REGISTRATION FEES WAS RS.30 000/- WAS PAID AT THE TIME OF TRANSFER OF GANESH SHALIGRAM PATIL (RET IRING PARTNER) AND BALANCE STAMP DUTY WAS PAID AS IT WAS PENDING FOR PAYMENT A T THE TIME OF PROPERTY PURCHASE BY ORIGINAL OWNER (SIRAJ TRADERS FORM WHOM BALAJI TRADING CORPORATION HAS PURCHASE THE PROPERTY). AT THE TIME OF TRANSFERRING THE PROPERTY TO RETIRING PARTNER (I.E MR. GANESH PATIL) REGISTR AR OF PROPERTY TOLD THAT STAMP DUTY AND REGISTRATION OF FEES IS STILL NOT PAID BY OUR P REVIOUS OWNER (I.E SIRAJ TRADERS) SO TO GET THE CLEAR TITLE WE HAD PAID THE REGISTRATION FEES WHICH IS PENDING. FIRM (I.E BALAJI TRADING CORPORATION) HAS PURCHASE THE PROPERTY FORM SIRAJ TRADERS AND SIRAJ TRADER HAS PURCHASED THE PR OPERTY FORM MR. ZAINUDDIN JIWAJI KATHAWALA. WHEN MR. ZAINUDDIN KATH AWALA HAS SOLD THE PROPERTY TO M/S. SIRAJ TRADERS AT THAT TIME STAMP D UTY AND REGISTRATION FEES WAS NOT PAID SO AT THE TIME OF TRANSFER OF PROPERTY TO RETIRING PARTNER FIRM (I.E BALAJI TRADING CORPORATION ) HAS BORN ALL THE STA MP DUTY AND REGISTRATION FEES. HENCE WE HAD CLAIM STAMP DUTY AND REGISTRATION FEES AS COST OF TRANSFER THE PROPERTY AT THE TIME OF CALCULATION OF CAPI TAL GAIN. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2015- 16 ON 28.09.2015 DECLARING TOTAL INCOME OF RS.21 21 610/-. THE ASSES SEE HAS SHOWN SALE PRICE OF A SHOP AT RS.51 97 500/-. THE DISPUTE HERE IS TH E CLAIM MADE BY THE ASSESSEE IN ITS COMPUTATION OF INCOME THAT THE COST OF SELLING THE SAID SHOP BALAJI TRADING ITA NO. 5198/M/2019 3 WAS RS.5 00 400/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO JUSTIFY ITS CLAIM WITH DOCUME NTARY EVIDENCE. IN RESPONSE TO IT THE ASSESSEE VIDE LETTER DATED 27.12.2017 EXPLAINED THAT THIS AMOUNT WAS SPENT BY THE ASSESSEE ON ACCOUNT OF STAM P DUTY OF THE PREVIOUS OWNER AS IT WAS NOT PAID AT THE TIME OF ACQUIRING T HE PROPERTY. THEREUPON THE AO ASKED THE ASSESSEE TO PRODUCE DOCUMENTARY EV IDENCE TO SUBSTANTIATE ITS ABOVE CLAIM. NOTING THAT THE ASSESSEE FAILED TO FILE THE RELEVANT DOCUMENTARY EVIDENCE IN THE FORM OF BANK ACCOUNT ST ATEMENT AND CHALLANS THE AO MADE A DISALLOWANCE OF RS.5 00 400/- UNDER T HE HEAD SHORT TERM CAPITAL GAIN. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) VIDE ORDER DATED 24.04.2019 CONFIRMED THE ABOVE DISALLOWANCE MADE BY THE AO BY OBSERVING THAT : 5.4 ACCORDING TO THE AO THE AMOUNT OF RS.5 00 400 /- BEING AGGREGATE OF VARIOUS AMOUNT OF STAMP DUTY WAS TO BE DISALLOWED SINCE NO DOCUMENTARY EVIDENCE WAS ADDUCED BY THE APPELLANT BEFORE HIM. I N THE APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED COPIES OF CHALLANS IN SUPPO RT OF THE CLAIM. HOWEVER I FIND THAT NONE OF THE CHALLANS SHOW PAYMENT MADE BY THE APPELLANT FIRM RATHER THE CHALLANS ARE IN VARIOUS DIFFERENT NAMES. FOR TH E APPELLANT TO SHOW THAT THE IMPUGNED DISALLOWANCE AS ABOVE IS ERRONEOUS IT HAS TO LEAD EVIDENCE IN THE FORM OF CHALLANS DRAWN IN THE NAME OF THE APPELLANT FIRM SO AS TO PROVE THAT THE PAYMENT HAS INDEED MADE BY THE APPELLANT. CONTRARY TO THIS THE RECORD SHOWS THAT THE PAYMENTS ARE NOT MADE BY THE APPELLANT FIR M BUT RATHER BY DIFFERENT PERSONS. 5.5. THEREFORE NEITHER THE PAYMENT BY THE APPELLAN T FIRM NOR THE PROXIMATE LINK WITH THE STCG CAN BE ESTABLISHED AS PER ABOVE DISCUSSION. HENCE I FIND THAT AS SUCH THERE IS NO LOGICAL JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE AO. ACCORDINGLY THE DISALLOWANCE OF RS.5 00 400/- IS U PHELD. BALAJI TRADING ITA NO. 5198/M/2019 4 5. THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. DURING THE COURSE OF APPEAL HE ARING BEFORE THE LD. CIT(A) THE ASSESSEE HAD SUBMITTED (PARA 5.1 OF THE IMPUGNED ORDER) THAT THE FOLLOWING STAMP DUTY AMOUNT THROUGH CHALLANS WA S PAID : SR. NO. DATE NAME AMOUNT REMARKS 1. 11/12/2014 GANESH SHALIGRAM PATIL 30 000/ - BANK OF BARODA 2. 11/12/2014 GANESH SHALIGRAM PATIL 2 62 500/ - 3. 11/12/2014 GANESH SHALIGRAM PATIL 300/ - CASH 4. 29/01/2015 SIRAJ TRADERS 1 49 400/ - TRF. TO GANESH PATIL RS.4 00 000/- ON 21.01.2015 29/01/2015 SIRAJ TRADERS 74 700/ - TOTAL 5 16 900/ - THUS THE CONTENTIOUS ISSUE IN THE PRESENT CASE CAN BE RESOLVED ONCE THE ASSESSEE FILES EVIDENCE THAT IT HAS PAID STAMP DUTY. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THE ABOVE ISSU E AND RESTORE THE MATTER TO THE FILE OF THE AO TO PASS AN ORDER AFRESH AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRE CT THE ASSESSEE TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. 7. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/2021. SD/- SD/- (VIKAS AWASTHY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 19/03/2021 RAHUL SHARMA SR. P.S. BALAJI TRADING ITA NO. 5198/M/2019 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT MUMBAI