Income Tax Appellate Tribunal - Mumbai
Vijay Raghunath Biwalkar, Mumbai vs Assessee on 30 November, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "F", MUMBAI
BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND
SHRI SANJAY GARG, JUDICIAL MEMBER
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
ORDER
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 appeal."
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/2012Mr. 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.