One Plus Fashion Pvt. Ltd., (Formerly known as Two Plus Fashion Pvt. Ltd.,), Kolkata V. ITO, Ward - 1(1), , Kolkata

CO 99/KOL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9083 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 19-08-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 14-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR GUPTA ACA
• Assessee Lawyers: SANKAR HALDER
• Keywords: Principle of natural justice; Tax effect
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.855/KOL/2017 ( / ASSESSMENT YEAR:2007-08) ITO, WARD-1(1), KOLKATA VS. M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLUS FASHION PVT. LTD.) 6D, PARK PLAZA, 71, PARK STREET, KOLKATA-700016. ./ ./PAN/GIR NO.: AACCT 3458 L (APPELLANT) .. (RESPONDENT) C.O. NO. 99/KOL/2018 (ARISING OUT OF ./ITA NO.855/KOL/2017 ( / ASSESSMENT YEAR:2007-08) M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLUS FASHION PVT. LTD.) 6D, PARK PLAZA, 71, PARK STREET, KOLKATA-700016. VS. ITO, WARD-1(1), KOLKATA ./ ./PAN/GIR NO.: AACCT 3458 L (CROSS OBJECTOR) .. (RESPONDENT) APPELLANT BY : SHRI SANKAR HALDER, JCIT, SR. DR RESPONDENT BY : SHRI SUMIT KUMAR GUPTA, ACA / DATE OF HEARING : 19/08/2019 /DATE OF PRONOUNCEMENT : 01/10/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2007-08 , ARE DIRECTED AGAINST THE ORDER M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLUS F ASHION PVT. LTD.) ITA NO.855/KOL/2017& C.O. NO. 99/KOL/2018 ASSESSMENT YEAR:2007-08 PAGE | 2 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL)-1 5, KOLKATA, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE AS SESSING OFFICER U/S 144 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 22/ 12/2009. 2. THE APPEAL FILED BY THE REVENUE FOR A.Y. 2007-08 , IS BARRED BY LIMITATION BY 5 DAYS. THE REVENUE FILED A PETITION FOR CONDONATION OF DELAY. WE HAVE HEARD BOTH THE PARTIES ON THIS PRELIMINARY ISSUE AND HAVING RE GARD TO THE REASONS GIVEN IN THE PETITION FOR CONDONATION OF DELAY. WE CONDONE THE D ELAY AND ADMIT THE APPEAL OF REVENUE FOR HEARING. 3. IN THE REVENUES APPEAL IN I.T.A. NO. 855/KOL/20 17, THE UNDISPUTED FACT IS THAT THE TAX EFFECT IS BELOW THE MONETARY LIMIT OF RS.50 ,00,000/- FIXED BY THE CBDT VIDE CIRCULAR NO.17/2019, F. NO. 279/MISC. 142/2007 -ITJ(PT.), DT. 8 TH AUGUST, 2019. THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED I N LIMINE IN TERMS OF THE CIRCULAR ISSUED BY THE CBDT MENTIONED HEREINABOVE. 4. NOW WE SHALL TAKE ASSESSEES CROSS OBJECTION IN C.O. NO. 99/KOL/2018 FOR A.Y. 2007-08. GROUNDS OF APPEAL RAISED BY THE ASSESSEE I N CROSS OBJECTION ARE AS FOLLOWS: 1. FOR THAT THE ASSESSMENT ORDER IS VOID AB INITIO, OPPOSED TO REQUIREMENT OF AND BAD IN LAW. 2. FOR THE DETERMINATION OF TAXABLE INCOME BY THE L OWER AUTHORITIES IS VOID AB INITIO OPPOSED TO THE REQUIREMENT OF LAW AND NOT TE NABLE IN LAW. 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 13,72,211/- UNDER THE HEAD OF OTHER INCOME AND IS NOT TENABLE I N LAW AS WELL AS IN FACTS. 4. FOR THAT THE ADDITION OF RS. 60,54,694/- UNDER T HE HEAD LIABILITIES BY THE LD. CIT(A) IS NEITHER TENABLE IN LAW NOR IN FACTS. 5. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE FACTORY RENT OF RS. 82,122/-. 6. FOR THAT THE CONFIRMING OF RS. 6,14,063/- UNDER THE HEAD CLEARING AND FORWARDING EXPENSES BY APPLYING SECTION U/S 40(A)(I A) OF THE ACT IS UNJUSTIFIED AND UNCALLED FOR. 7. FOR THAT OTHER GROUNDS MAY BE URGED AT THE TIME OF HEARING. M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLUS F ASHION PVT. LTD.) ITA NO.855/KOL/2017& C.O. NO. 99/KOL/2018 ASSESSMENT YEAR:2007-08 PAGE | 3 5. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE INFORMS THE BENCH THAT THE ASSESSEE DOES NOT WANT TO PRESS CROSS OBJE CTION GROUND NO. 1, 2 , 3 & 6 THEREFORE, WE DISMISS THEM AS NOT PRESSED. 6. NOW WE SHALL TAKE GROUND NOS. 4 AND 5 RAISED BY THE ASSESSEE IN CROSS OBJECTION, WHICH RELATES TO ADDITION OF RS. 60,54,694/-, AND A DDITION ON ACCOUNT OF FACTORY RENT OF RS. 82,122/- RESPECTIVELY. 7. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE FAIRLY SUBMITTED THAT THE MATTER RELATING TO FACTORY RENT TO THE TUNE OF RS. 82,122/- AND ADDITION OF RS. 60,54,694/- UNDER THE HEAD LIABILITIES SHOULD BE RE MITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AS THE LD. CIT(A) HAS NOT CONSIDERED THE FACTS IN PROPER PERSPECTIVE. WE NOTE THAT IN THE BA LANCE SHEET, ASSESSEE HAD SHOWN CURRENT LIABILITY AND PROVISION OF RS. 1,17,87,666/ -. AS DETAILS WERE NOT SUBMITTED REGARDING THESE CURRENT LIABILITY, THEREFORE, THESE WERE CONSIDERED AS BOGUS LIABILITIES AND ADDITION WERE MADE. DURING APPEAL P ROCEEDINGS, ASSESSEE SUBMITTED PARTY WISE DETAILS OF THIS LIABILITY; THAT IS, LIAB ILITIES STAND IN THE NAMES OF 26 PARTIES. DURING REMAND PROCEEDINGS ASSESSEE DID NOT FURNISH COMPLETE DETAILS. ASSESSING OFFICER HAS MENTIONED THAT COPIES OF BILL S OF ONLY 11 PARTIES WERE FILED. BUT LEDGER ACCOUNTS, TRANSACTIONS DETAILS OR PAN OF THESE PARTIES WERE NOT FURNISHED. HENCE, ASSESSING OFFICER HAS CONSIDERED ENTIRE CURRENT LIABILITIES TO BE BOGUS IN NATURE. IN APPEAL PROCEEDINGS, ASSESSEES A.R. HAVE FILED SOME DETAILS ABOUT 11 PARTIES. BUT ONLY IN FEW CASES COPY OF BIL LS AND PROOF REGARDING PAYMENT HAVE BEEN FILED. PERUSAL OF THE BILLS AND THE SUBSE QUENT PAYMENTS MADE, ESTABLISH THAT TRANSACTIONS WITH THE FOLLOWING PARTIES ARE GE NUINE. SL. NO. NAME AMOUNT (IN RS.) 1. A.L. SHETHI 37,950/- 2. CAPITAL APPAREL TECH. PVT. LTD. 56,19,945/- 3. CORRUGATED PRODUCT 10,096/- 4. JONTEX INTERNATIONAL 27,888 5. SHYAM SEL LTD. 7,808/- 6. B.R. LEBELS 29,015/- TOTAL 57,32,702/- M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLUS F ASHION PVT. LTD.) ITA NO.855/KOL/2017& C.O. NO. 99/KOL/2018 ASSESSMENT YEAR:2007-08 PAGE | 4 THEREFORE, THE LD. CIT(A) CONFIRMED THE BALANCE AD DITION OF RS. 60,54,696/- (11787888/- - 57,32,702/-). 8. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THR OUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THE LD. COUNSEL INFORMS THE BENCH THAT ASSESSEE COULD NOT FURNISH T HE EXPLANATIONS AND EVIDENCES IN RESPECT OF LIABILITIES, AS THE EVIDENCES WERE NO T IN THE POSSESSION OF THE ASSESSEE. THAT IS DUE TO CIRCUMSTANCES BEYOND HIS CONTROL, TH E ASSESSEE COULD NOT FURNISH EVIDENCES / EXPLANATIONS BEFORE ASSESSING OFFICER / LD. CIT(A). IF AN OPPORTUNITY IS GIVEN THE ASSESSEE IS READY TO MAKE COMPLIANCE. THE REFORE, THE LD. COUNSEL PRAYED THE BENCH THAT MATTER SHOULD BE REMITTED BACK TO TH E FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION OF THIS ISSUE. REGARDING CROSS O BJECTION NO. 5 WHICH RELATES FACTORY RENT TO THE TUNE OF RS. 82,122/-. WE NOTE T HAT ASSESSING OFFICER HAS NOT ADJUDICATED THE ISSUE, AS THE ASSESSEE COULD NOT FI LE ANY DETAILS BEFORE HIM. DURING THE APPELLATE PROCEEDINGS, ALSO THE ASSESSEE HAS N OT SUBMITTED ANY DETAILS. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE ASSESSMENT STAGE AND APPELLATE STAGE THE ASSESSEE COULD NOT FILE DETAILS DUE TO CIRCUMSTANCES BEYOND HIS CONTROL, AND NOW THE ASSESSEE IS READY TO FILE REQU IRED DETAILS THEREFORE THIS ISSUE NEEDS TO BE REMITTED BACK TO THE FILE OF THE ASSESS ING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AT THE TIME OF ASSESSME NT PROCEEDINGS AND DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE DID NOT HAVE IN HIS POSSESSION, THE INFORMATION AND DOCUMENTS RELATING TO THESE TWO ADDITIONS THERE FORE HE COULD NOT FILE DOCUMENTS AND EVIDENCES DURING THE APPELLATE PROCEE DINGS. HOWEVER, NOW THE ASSESSEE GOT DETAILS/EVIDENCES IN RESPECT OF FACTOR Y RENT AND LIABILITIES AND READY TO FURNISH THE DETAILS AND EVIDENCES BEFORE THE ASSESS ING OFFICER THEREFORE THESE TWO ISSUES SHOULD BE REMITTED BACK TO THE FILE OF THE A SSESSING OFFICER FOR FRESH VERIFICATION. WE NOTE THAT THE LD. D.R. FOR THE REV ENUE HAS FAIRLY AGREED WITH THE PROPOSITION OF THE LD. COUNSEL FOR THE ASSESSEE. CO NSIDERING THE FACTUAL POSITION AS NARRATED ABOVE AND TAKING INTO ACCOUNT THE PRINCIPL ES OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PLEAD HIS M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLUS F ASHION PVT. LTD.) ITA NO.855/KOL/2017& C.O. NO. 99/KOL/2018 ASSESSMENT YEAR:2007-08 PAGE | 5 CASE BEFORE ASSESSING OFFICER. THEREFORE WE SET ASI DE THE ORDER OF THE LD. CIT(A) AND REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION NOS. 4 AND 5 OF THE ASSESSEE ARE ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 01.10.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 01/10/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-1(1), KOLKATA 2. M/S ONE PLUS FASHION PVT. LTD. (FORMERLY TWO PLU S FASHION PVT. LTD.) 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES