ING Vysya Financial Services Limited, Bangalore V. DCIT, Bangalore

ITA 1028/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5550 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 24-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI N.BARATHVAJA SANKAR, VICE-PRESIDENT AND BEFORE GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.1028(BANG)/2010 (ASSESSMENT YEAR: 2004-05) ING VYSYA FINANCIAL SERVICES LTD., ING VYSYA HOUSE, BLOCK I, RIGHT WING I FLOOR, NO.22, MG ROAD, BANGALORE. PAN NO.AAACT 8127C VS. APPELLANT DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 11(4), BANGALORE. RESPONDENT APPELLANT BY: SHRI S.ANANTHAN. RESPONDENT BY : SHRI G.V.GOPALA RAO. O R D E R PER GEORGE GEORGE K, JM: THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 28-6-2010. THE RELEVANT AS SESSMENT YEAR IS 2004-05. 2. THE ASSESSEE, IN THIS APPEAL, HAS RAISED THREE I SSUES VIZ., I) EXPENSES DISALLOWED - B .90,79,641/- II) DISALLOWANCE OF COMMISSION REPRESENTING INCOME PERTAINING TO PRIOR YEARS - B .10,45,501/- III) COMPUTATION OF MINIMUM ALTERNATIVE TAX U/S. 115JB ITA 1028(BANG)/2010 PAGE 2 OF 5 2.1 BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE- COMPANY IS ENGAGED IN MARKETING AND DISTRIBUTION OF VARIOUS FINANCIAL PRODUCTS/SERVICES SUCH AS INSURANCE, MUTU AL FUNDS ETC.. FOR THE CONCERNED ASSESSMENT YEAR RETURN OF INCOME WAS FILED ON 28-10-2004 DECLARING INCOME OF B .3,69,44,172/- UNDER THE PROVISIONS OF SEC.115JB OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT']. THE TOTAL I NCOME AS PER THE NORMAL PROVISIONS OF THE ACT BEFORE SET OFF OF UNABSORBED DEPRECIATION WAS B .3,85,80,247/-. THE UNABSORBED DEPRECIATION REMAINING AFTER SET OFF WAS B. 98,25,683/- WHICH WAS CARRIED FORWARD TO THE SUBSEQUENT ASSESSMENT YEAR VIZ., 200 5-06. 2.2 THE RETURN WAS SELECTED FOR SCRUTINY BY ISSUAN CE OF NOTICE U/S 143(2) OF THE ACT AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT BY ORDER DATED 29-12-2006 DET ERMINING THE TOTAL INCOME AT B .3,79,89,673/- UNDER THE PROVISIONS OF SEC.115JB OF THE ACT. THE AO DETERMINED THE TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE ACT BEFORE SET O FF OF UNABSORBED DEPRECIATION AT B 4,87,05,389. THE AO MADE THE FOLLOWING DISALLOWANCES/ADJUSTMENTS: I) EXPENSES DISALLOWED - B .90,79,641/- II) INSURANCE COMMISSION BEING PRIOR PERIOD INCOME OFFERED FOR TAX IN AY 2003-04 - B .10,45,501/- 3. ON APPEAL AGAINST THE AFORESAID DISALLOWANCES/ADJUSTMENTS, THE CIT(A), AFTER CALLIN G FOR REMAND REPORT FROM THE AO, DISMISSED THE APPEAL FILED BY T HE ASSESSEE ITA 1028(BANG)/2010 PAGE 3 OF 5 AND CONFIRMED THE ORDER OF ASSESSMENT. AGGRIEVED B Y THE DISMISSAL OF APPEAL BY THE FIRST APPELLATE AUTHORIT Y, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE AO , WHILE SUBMITTING HIS REMAND REPORT DATED 27-4-2010 HAD MADE THE FOLLOWING REMARKS WITH REGARD TO THE DISALLOWAN CE OF EXPENDITURE: IN RESPONSE TO THE SAME AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FURNISHED RELEVANT DETAIL S INCLUDING BOOKS OF ACCOUNTS, BILLS AND VOUCHERS, APPOINTMENT LETTERS OF THE EMPLOYEES. THE SAME ARE VERIFIED ON TEST CHECK BASIS AND FOUND TO BE IN ORD ER. AS REGARDS THE ADDITION OF B .10,45,000/-, THE AO HAD MENTIONED IN THE REMAND REPORT THAT THE SAME INCOME HAS ALREA DY BEEN OFFERED TO TAX FOR ASSESSMENT YEAR 2003-04 BOTH UND ER THE NORMAL PROVISIONS AND UNDER THE MAT PROVISIONS. IT WAS SUBMITTED THAT THE REMAND REPORT OF THE AO DATED 27 -4-2010 WAS FURNISHED TO THE ASSESSEE FOR HIS REBUTTAL/REJO INDER. HOWEVER, IN THE IMPUGNED ORDER THE CIT(A) IN PARA.4 .1 AND 8.2 HAS EXTRACTED THE REMAND REPORT OF THE AO WHICH WAS NEVER BEEN PUT TO THE ASSESSEE FOR HIS REBUTTAL AND THE I MPUGNED ORDER OF THE CIT(A) IS BASED ON THE ABOVE SAID REMA ND REPORT OF THE AO. THEREFORE, IT WAS PLEADED THAT IN THE INTE REST OF JUSTICE THE MATTER MAY BE REMITTED BACK TO THE CIT(A) SO TH AT THE REMAND REPORT ON WHICH THE CIT(A) HAS PLACED RELIAN CE COULD BE ITA 1028(BANG)/2010 PAGE 4 OF 5 FURNISHED TO THE ASSESSEE FOR HIS REBUTTAL/REJOINDE R AND THEREAFTER FRESH ORDER COULD BE MADE BY THE CIT(A). LEARNED DR ALSO FAIRLY SUBMITTED THAT THE REMAND R EPORT ON WHICH THE CIT(A) HAS PLACED RELIANCE HAS NOT BEE N PUT TO THE ASSESSEE FOR HIS OBJECTIONS. THEREFORE, IN THE INT ERESTS OF JUSTICE, THE MATTER SHOULD BE REMITTED TO THE CIT(A ) FOR FRESH CONSIDERATION. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THE CIT(A) HAS EXTRACT ED REMAND REPORT OF THE AO, IN PARA.4.1 AND 8.2 OF HIS ORDER. THE REMAND REPORT OF THE AO DATED 27-4-2010 WHICH IS PLACED ON RECORD BY THE ASSESSEE IS COMPLETELY IN FAVOUR OF THE ASSESSE E IN RESPECT OF THE ISSUES HE IS IN APPEAL BEFORE US. THE CIT(A) , HOWEVER, HAS NOT TAKEN COGNIZANCE OF THE REMAND REPORT DATED 27-4-2010. MOREOVER IT IS NOW PLEADED THAT THE REM AND REPORT ON WHICH THE CIT(A) HAS PLACED RELIANCE, WAS NEVER PUT TO THE ASSESSEE FOR HIS REBUTTAL. THEREFORE, THIS MATTER NEEDS FRESH EXAMINATION BY THE FIRST APPELLATE AUTHORITY AND IS ACCORDINGLY RESTORED TO THE FILE OF THE CIT(A). HE SHALL PROVID E TO THE ASSESSEE THE REMAND REPORT ON WHICH HE HAS PLACED R ELIANCE AND CALL FOR ASSESSEES OBJECTIONS. THEREAFTER HE SHALL PASS FRESH ORDERS. THE MATTER MAY BE DISPOSED OF AS EXPEDITIO USLY AS POSSIBLE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA 1028(BANG)/2010 PAGE 5 OF 5 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2011. SD/- SD/- (N.BARATHVAJA SANKAR) VICE PRESIDENT (GEORGE GEORGE K) JUDICIAL MEMBER PLACE : BANGALORE DATED: 29 TH JUNE, 2011. EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE