Trimurti Textiles, Sindhudurga V. Assistant Commissioner of Income-tax, Circle - 2, Kolhapur

ITA 119/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5065 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 31-12-2018
• Assessment Year: 2002-2003
• Appeal Filed On: 12-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY M VHANBATTE
• Keywords: Depreciation

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.119/PUN/2018 / ASSESSMENT YEAR : 2002-03 TRIMURTI TEXTILES, A/P DODAMARG, TAL. SAWANTWADI, DIST. SINDHUDURGA PAN : AAYPN4818K ....... / APPELLANT ! / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, KOLHAPUR. / RESPONDENT ASSESSEE BY : SHRI SANJAY M. VHANBATTE & SHRI M.K. KULKARNI REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 05.02.2019 / DATE OF PRONOUNCEMENT : 06.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEALS)-2, KOLHAPUR DATED 15.11.2017 FOR THE ASSESSME NT YEAR 2002-03 AS PER FOLLOWING CONCISE GROUNDS OF APPEAL ON RECORD: 1 ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL O F THE ASSESSEE THEREBY CONFIRMING THE ACTION OF THE AO DISALLOWING THE LOS S CLAIMED BY THE 2 ITA NO. 119/PUN/2018 A.Y.2002-03 PARTNERSHIP FIRM HOLDING IT AS BELONGING TO INDIVID UAL AND ALSO CON FIRMING THE DISALLOWANCE OF SET-OFF FROM INCOME DECLARED IN SURVEY ACTION. IT BE ALLOWED TO THE ASSESSEE . 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A O DISALLOWING THE CLAIM OF CARRY FORWARD OF CLAIM OF DEPRECIATION AND NOT ALLO WING THE CLAIM OF SALARY TO PARTNERS. THE CLAIMS BE ALLOWED TO THE APPELLANT FI RM. 2. THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING APP RAISED THE BENCH THAT THE LD. CIT(APPEALS) HAS DECIDED THE APPEAL OF THE AS SESSEE ON THE BASIS OF WRITTEN SUBMISSIONS FILED. HOWEVER, THERE WAS NO PERSONAL APPEARANCE BY THE ASSESSEE. THAT EVEN, THE ASSESSMENT WAS COMPLETED U/S.144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T). THE LD. AR FURTHER INVITED OUR ATTENTION TO PARA 9 OF THE CIT(APPEALS)S ORDE R WHEREIN HE HAS OBSERVED THAT NO EVIDENCE EXCEPT THE P & L ACCOUNT AND BALANCE SHEET OF THE FIRM AS ON 31.03.2001 AND 31.03.2002 HAVE BEEN FILED. HE ALSO OBSERVED THAT P & L ACCOUNT AND BALANCE SHEET AS ON 31.03.2001 ARE U NSIGNED COPIES. THE LD. CIT(APPEALS) THEREIN HAS OBSERVED THAT FROM PERUSAL OF THE BALANCE SHEET AND P & L ACCOUNT FOR 31.03.2001 AND 31.02.2002, THE FIRM IS HAVING TWO PARTNERS VIZ. POOJA NANODKAR AND SHANTABAI NANODKAR. ON THE OTHER HAND, THE HOTEL BUILDING ETC. IS ADMITTEDLY PURCHASED IN THE NAME OF ASHOK NANODKAR WHO IS NOT A PARTNER IN THE FIRM. 2.1 THE LD. AR FURTHER POINTED OUT THAT EVEN BEFORE THE ASSESSING OFFICER, THERE WAS NON-COMPLIANCE BY THE ASSESSEE AND THE ORDE R WAS PASSED U/S.144 OF THE ACT. THEREFORE, IN THE INTEREST OF JUSTICE AND FOR T HE SAKE OF DETAILED VERIFICATION OF THE FACTS IN THIS CASE, THE MATTER MAY BE RE MANDED TO THE FILE OF ASSESSING OFFICER. 3. THE LD. DR, PER CONTRA, PLACED RELIANCE ON THE ORDERS OF SUB-ORDINATE AUTHORITIES AND CONTESTED THE PRAYER OF THE ASSESSEE FOR REMANDIN G THE MATTER 3 ITA NO. 119/PUN/2018 A.Y.2002-03 TO THE FILE OF THE ASSESSING OFFICER BY STATING THAT THE A SSESSEE DOES NOT DESERVE ANY FURTHER CHANCE. SINCE, EVEN AT THE TIME OF F IRST APPELLATE PROCEEDINGS, THERE WAS NO PERSONAL APPEARANCE OF THE AS SESSEE AND IT WAS ONLY THROUGH WRITTEN SUBMISSIONS, THEY HAVE REPRESENTED THE CA SE. 4. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIV AL CONTENTIONS AND HAVE GIVEN CONSIDERABLE THOUGHT ON THE RECORDS AND REL EVANT DOCUMENTS PLACED BEFORE US. THAT FROM THE ORDER OF THE LD. CIT(APPEA LS), IT COMES OUT THAT LOAN AND HOTEL PREMISES ARE IN THE NAME OF ASHOK NA NODKAR WHO IS NOT PARTNER IN THE FIRM AND HAS NO LEGAL RELATION WITH THE FIRM. THEREFORE, FRO M THE BOOKS OF THE ASSESSEE ITSELF, IT IS CLEAR THAT THE ASSET AN D LIABILITY OF AN INDIVIDUAL WHO IS UNRELATED TO THE ASSESSEE HAS BEEN IMPOR TED INTO THE BOOKS AND THE LOSS GENERATED FROM THE SAME IS SET OFF AGAINST THE PROFIT OTHERWISE DECLARED INCLUDING THE SURVEY DECLARATION. THE LOSS IS GENE RATED FROM THE HOTEL WHICH ADMITTEDLY BELONGS TO ASHOK NANODKAR AND TH E LIABILITY ALSO BELONGS TO HIM AND THEREFORE, LOSS FROM THE SAME CANNOT B E ALLOWED IN THE HANDS OF THE FIRM. AS AGAINST THIS OBSERVATION OF THE LD. CIT(APPEALS), THE ASSESSEE HAS ONLY SUBMITTED THE BALANCE SHEET AND BOO KS OF ACCOUNT. IT IS ABSOLUTELY CLEAR THAT THERE HAS NOT BEEN ADJUDICATION OF THE CASE ON MERITS. HENCE, RIGHTS AND LIABILITIES ARE YET TO BE ADJUDICATED. FURTHER, WHEN THE FIRM IS HAVING TWO PARTNERS I.E. POOJA N ANODKAR AND SHANTABAI NANODKAR, HOW THE NAME OF ASHOK NANODKAR COM ES UP AS PURCHASER OF HOTEL BUILDING WHO IS ALSO NOT A PARTNER IN TH E FIRM. THIS FACT NEEDS DETAILED VERIFICATION. 5. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE C ASE, WE SET ASIDE THE ORDER OF LD. CIT(APPEALS) AND REMAND THE MATTER TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUDICATION THROUGH DETAILED VERIFICATION AND PROPER ENQUIRY AS 4 ITA NO. 119/PUN/2018 A.Y.2002-03 TO THE AFORESAID ISSUE AFTER PROVIDING REASONABLE OPPORTUN ITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED ON 06 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 06 TH FEBRUARY, 2019. SB '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, KOLHAPUR. 4. THE PR. CIT-2, KOLHAPUR. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 5 ITA NO. 119/PUN/2018 A.Y.2002-03 DATE 1 DRAFT DICTATED ON 0 5 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 06 .0 2 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER