Deepak Petrochem Ltd., Baroda V. The Addl.CIT.,(Asstt.),Spl.Range-1, Baroda

ITA 1040/AHD/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0486 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-11-2009
• Assessment Year: 1998-1999
• Appeal Filed On: 19-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S SANDHU
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D, AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JM AND SHRI DC AGARWAL, AM I.T.A. NO.1040/A/2008 (ASSESSMENT YEAR 1998-99) DEEPAK PETROCHEM LTD VS ADDL CIT (ASST) 303, BN CAMBERS SR-1, BARODA R.C. DUTT ROAD, ALKAPURI BARODA 390 005 PAN : AAACD7462L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI URVASHI SHODHAN RESPONDENT BY: SHRI BS SANDHU O R D E R D.C. AGARWAL : THIS APPEAL FILED BY THE ASSESSEE I S DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-VI, BARODA FOR THE ASSESSMENT YEAR 1998-99. 2. THE GROUNDS TAKEN BY THE ASSESSEE READ AS FOLLOW S: 1. THE LEARNED CIT (APPEALS) ERRED IN PASSING THE APPELLATE ORDER WITHOUT GIVING PROPERLY OPPORTUNITY TO THE AP PELLANT. 2. THE LEARNED CIT (APPEALS) ERRED IN PASSING THE O RDER ON 31.10.2007 FOR NON ATTENDANCE OF HEARING ON 24.10.2 007. 3. THE COUNSEL FOR THE APPELLANT COULD NOT APPEAR B EFORE THE CIT (APPEALS) DUE TO PRE-OCCUPATION WITH TAX AUDIT, RETURNS ETC. 4. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE BOOK RESULTS OF THE APPELLANT WAS LIABLE TO BE REJECTED AND FURTHER ERRED IN CONFIRMING THE ESTIMATION OF PROFI TS AT 20% OF THE SALES AS AGAINST BOOK LOSS OF RS.4,87,333/- DISCLOSED BY THE APPELLANT. 5. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.45,67,679/- ON ACCOUNT OF ESTIMATION OF NET P ROFIT. ITA 1040/A/2008 2 6. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING DISALLOWANCE ON ACCOUNT OF ALLEGED EXCESS CLAIM OF DEPRECIATION ON STORAGE TANK OF RS.12,500/-. 7. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING DISALLOWANCE OF ALLEGED EXCESS CLAIM OF DEPRECIATIO N OF RS.6177/- ON ELECTRONIC TYPEWRITER. 8. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING TH E ADDITION OF RS.56,94,000/- U/S 68 OF THE ACT. 9. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING TH E ADDITION ON ACCOUNT OF EXCISE DUTY ON CLOSING STOCK OF RS.6,62,568/-. 10. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING DISALLOWANCE OF RS. 75,300/- OUT OF INTEREST CLAIME D BY THE APPELLANT. 3. THE ASSESSEE, A COMPANY, IS DEALING IN PRODUCTIO N OF INDUSTRIAL SOLVENTS. IT HAS FILED ITS RETURN OF INCOME ON 30- 11-1998 SHOWING LOSS OF RS.81,43,926 THE ASSESSING OFFICER, IN HIS EXPART E ORDER U/S 144 DATED 08- 01-2001 HAS, HOWEVER, DETERMINED A PROFIT OF RS.29, 52,082. AMONGST VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER, THE MAJOR ITEMS WERE (I) ON ACCOUNT OF ESTIMATION OF GROSS PROFIT BY REJECTING THE BOOK RESULTS U/S 145; (II) ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY UNEX PLAINED; AND (III) VALUATION OF FINISHED STOCK. THE APPEAL FILED BEFO RE THE FIRST APPELLATE AUTHORITY WAS ALSO DECIDED EX PARTE. THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) RECORDS THAT AS MANY AS 15 OPPORTUNIT IES WERE PROVIDED TO THE ASSESSEE; HOWEVER, ALMOST ALL THE SAME EITHER REMAI NED NOT COMPLIED WITH OR SOUGHT ADJOURNMENTS. ONCE THE AUTHORISED REPRESENT ATIVE OF THE ASSESSEE ATTENDED AND FILED CERTAIN INFORMATION CALLED FOR. THIS LEAD THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO PASS HIS AP PELLATE ORDER EXPARTE. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED THIS APPE AL BEFORE US. 4. THE MAIN SUBSTANTIVE GROUND RAISED BY THE ASSESS EE, INTER-ALIA, PERTAINS TO PRINCIPLES OF NATURAL JUSTICE. THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITS THAT VOLUMINOUS PAPER BOOK WAS SUBMITTED BE FORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND THE ORDER PASSED BY THE FIRST ITA 1040/A/2008 3 APPELLATE AUTHORITY IS WITHOUT PROVIDING ADEQUATE O PPORTUNITY OF BEING HEARD AND THEREFORE, THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) IS VOID AB INITIO. THUS, HE SUBMITS THAT THE ASSESSEE MAY BE GIVEN ANOTHER OPPORTUNITY OF BEING HEARD TO EXPLAIN ITS C ASE. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY SERIO US OBJECTION IN PROVIDING ANOTHER OPPORTUNITY TO THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE ARE SATISFIED THAT AS A MATTER OF SUBSTANTIAL JUSTICE, THE ASSESSEE DESERVES ANOTHER OPPORTUNITY OF BEING HEARD. THE MATTER IS ACCORDINGLY SET ASIDE TO THE FILE OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH ADJU DICATION IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO COMPLY WITH THE REQUISITION OF THE CIT(A) PROMPTLY. THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IS HEREBY DIRECTED THAT EVEN IF THERE IS NO COMPLIANCE , HE SHALL PASS A SPEAKING ORDER ON MERITS AFTER CONSIDERING THE MATERIAL COLL ECTED BY THE ASSESSING OFFICER AS ALSO THE LEGAL POSITION ON THE ISSUE. S INCE WE HAVE SET ASIDE THE ISSUE ON THE LEGAL GROUND OF NATURAL JUSTICE, THE G ROUNDS ON MERITS WERE NOT CONSIDERED TO BE GONE INTO. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. 7. ORDER PRONOUNCED ON 13 TH DAY OF NOVEMBER, 2009. SD/- SD/- (MAHAVIR SINGH) (D.C. AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DT : 13 TH NOVEMBER, 2009 PK/- ITA 1040/A/2008 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-(A) 4. THE CIT 5. THE DR, D BENCH /TRUE COPY/ DY. REGISTRAR / ASST.REGISTRAR ITAT, AHMEDABAD BENCHES