Income Tax Officer, Kanpur V. M/s Somani Iron & Steels Ltd., Kanpur

ITA 125/LKW/2014

• Counselvise Citation: 12523714 RSA 2014
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-12-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 28-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.125/LKW/2014 ASSESSMENT YEAR:1997 - 98 M/S SOMANI IRON & STEEL LTD., 51/27, NAYAGANJ, KANPUR. PAN:AABCS9127N VS INCOME TAX OFFICER, WARD - 6(2), KANPUR. (RESPONDENT) (APPELLANT) SHRI ALOK MITRA, D. R. APPELLANT BY NONE RESPONDENT BY 01/10/2014 DATE OF HEARING 10 /1 2 /2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, KANPUR DATED 25/11/2013 FOR THE ASSESSMENT YEAR 19997 - 98. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS.1,14,633/ - WITHOUT APPRECIATING THE FACTS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT FURNISH ANY COGENT EVIDENCE TO SUBSTANTIATE ITS CLAIM OVER PRIOR EXPENSES EVEN AFTER PROPER OPPORTUNITIES HAD BEEN PROVIDED. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO FOLLOW THE ORDER OF HON'BLE ITAT GIVING RELIEF OF RS.4,73,490/ - UNDER THE HEAD TELEPHONE, REPAIRS &. REPAIRS TO PLANT & MACHINERY WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE COULD NOT PRODUCE AN Y DOCUMENTARY EVIDENCE OR MATERIAL FACTS REGARDING THESE EXPENSES NOR JUSTIFIED THE DISPROPORTIONATE INCREASE UNDER THESE HEADS IN COMPARISON TO LAST YEAR. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO FOLLOW THE ORDER OF HON'BLE' I.T.A.T. GI VING RELIEF OF 2 RS.17,95,532/ - UNDER THE HEAD OF CONVERSION CHARGES WITHOUT APPRECIATING THE FACTS THAT THE ITAT IN ITS ORDER DATED 16.11.2007 ITSELF ADMITTED THAT THE ASSESSEE WAS REQUIRED TO JUSTIFY THE PAYMENTS VIZ - A - VIS PREVAILING RATE AND SERVICES REND ERED, HOWEVER, THE ASSESSEE DID NOT GIVE THE COST OF CONVERSION CHARGES, BY BOTH THE PARTIES NAMELY RHL PROFILES LTD. AND USHA UDYOG AND ALSO DID NOT FURNISH EVEN THE PRELIMINARY DETAILS BEFORE THE AO. 4. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN GIVING RELIEF OF RS.17,95,532/ - UNDER THE HEAD OF CONVERSION CHARGES WITHOUT APPRECIATING THE FACTS THAT THE PARTIES RHL PROFILES LTD. AND USHA UDYOG TO WHOM THE CONVERSION CHARGES PAID ARE DIRECTLY OR INDIRECTLY CONTROLLED BY THE DIRECTORS OF THE ASSESSEE COMPAN Y. 5. THE ORDER OF THE CIT (A), KANPUR BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF THE AO BE RESTORED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE APPOINTED DATE OF HEARING INSPITE OF NOTICE AND HENCE, WE PROCEED TO DECIDE THIS APPEAL OF THE REVENUE EX - PARTE QUA THE ASSESSEE . 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONS IDERED THE SUBMISSIONS OF LEARNED D.R. OF THE REVENUE, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IT IS NOTED BY ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT ON TWO ISSUES , THE MATTER WAS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION VIDE ITS ORDER DATED 16/11/2007 IN I.T.A. NO.179/LKW/2000. THOSE TWO ISSUES ARE REGARDING ADDITION OF RS.60,85,882/ - MADE ON ACCOUNT OF CESSATION OF LIABILITY AND THE SE COND ISSUE IS REGARDING CLAIM OF DEDUCTION OF EXPENSES AGGREGATING TO RS.1,14,633/ - . IN ASSESSMENT ORDER , THE ASSESSING OFFICER MADE BOTH THESE ADDITIONS AGAIN. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), THE FIRST ISSUE REGARDING A DDITION OF RS.60,85,882/ - WAS DECIDED AGAINST THE ASSESSEE AND THEREFORE, THIS ISSUE IS NOT A PART OF THE REVENUES APPEAL BEFORE US. HENCE, THE ONLY RELIEF WHICH COULD HAVE BEEN ALLOWED BY THE CIT(A) IS REGARDING THE ADDITION MADE BY THE ASSESSING OFFICE R AGAIN OF RS.1,14,633/ - . WE ALSO FIND 3 THAT IN THE STATEMENTS OF FACTS, FILED BY THE ASSESSEE BEFORE CIT(A) ALSO, IT IS NOTED BY THE ASSESSEE ALSO THAT TWO ISSUES WERE RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER I.E. THE ISSUE REGAR DING ADDITION OF RS.60,85,882/ - AND RS.1,14,633/ - AND THERE IS NO MENTION OF ANY OTHER ISSUE, WHICH HAVE BEEN RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER BUT IN THE GROUNDS OF APPEAL, RAISED BY THE ASSESSEE BEFORE THE CIT(A), IN ADDI TION TO THESE TWO ISSUES, SOME OTHER GROUNDS WERE ALSO RAISED BEFORE CIT(A) AND THESE ARE ALSO DECIDED BY CIT(A) IN FAVOUR OF THE ASSESSEE ALTHOUGH THE FIRST ISSUE REGARDING ADDITION OF RS.60,85,882/ - WAS DECIDED BY THE CIT(A) AGAINST THE ASSESSEE. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) COULD NOT HAVE DECIDED ANY OTHER ISSUE EXCEPT THE ISSUE REGARDING ADDITION OF RS.60,85,882/ - AND RS.1,14,633/ - . SINCE THE ISSUE REGARDING ADDITION OF RS.60,85,882/ - HAS BEEN DECIDED BY CIT(A) A GAINST THE ASSESSEE AND THERE IS NO APPEAL BY THE ASSESSEE BEFORE US, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) ON THIS ISSUE. REGARDING THE DELETION OF THE ADDITION OF RS.1,14,633/ - , WE FIND THAT AS PER PARA 6 OF THE ASSESSMENT ORDER, IT IS NO TED BY THE ASSESSING OFFICER THAT THIS ISSUE WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE THAT THIS MUCH AMOUNT WAS ADDED BY THE ASSESSEE ITSELF IN THE COMPUTATION OF INCOME BUT A CLEAR FINDING IS GIVEN BY THE ASSESSING OFFICER THAT AS PER THE COMPUTATION OF INCOME FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME, NO SUCH ADDITION WAS MADE BY THE ASSESSEE IN THE COMPUTATION OF INCOME AND THEREFORE, THIS ISSUE WAS DECIDED BY THE ASSESSING OFFICER AGAINST TH E ASSESSEE. THERE IS NO FINDING OF CIT(A) ON THIS ASPECT THAT THE ASSESSING OFFICER IS NOT CORRECT TO SAY THAT THE MATTER WAS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER ONLY IN RESPECT OF THIS ASPECT THAT THE ASSESSEE HAD ALREADY A DDED THIS AMOUNT IN COMPUTATION OF INCOME. INSTEAD OF THIS , CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT THE ASSESSEE HAS BROUGHT EVIDENCE ON RECORD TO SHOW THAT THESE EXPENSES I.E. EPF/ESI PAYMENT, TELEPHONE BILL, RENTAL 4 CHARG ES AND BROKERAGE, WHICH HAD BEEN SHOWN AS PAYABLE WERE DULY PAID SUBSEQUENTLY. IN THE ABSENCE OF ANY FINDING OF THE CIT(A) TO POINT OUT ANY MISTAKE IN THE ASSESSMENT ORDER THAT THE ISSUE WAS RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR LIMITED PUR POSE TO EXAMINE THIS CLAIM OF THE ASSESSEE THAT THE AMOUNT IN QUESTION OF RS.1,14,633/ - WAS ALREADY ADDED BY THE ASSESSEE IN I TS COMPUTATION, NO OTHER BASIS A S GIVEN BY CIT(A) TO DELETE THIS ADDITION IS JUSTIFIED AND THEREFORE, THE SAME IS NOT SUSTAINABLE. THEREFORE, ON THIS ISSUE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. 6. REGARDING VARIOUS OTHER RELIEF ALLOWED BY CIT(A), WE ARE OF THE CONSIDERED OPINION THAT WHEN IN THE IMPUGNED ORDER DATED 17/12/2008 PASSED BY THE AS SESSING OFFICER U/S 254/143(3), THE ONLY ISSUE DECIDED BY THE ASSESSING OFFICER IS REGARDING THE ADDITION OF RS.60,85,882/ - AND RS. 1,14,633/ - , THE CIT(A) WAS NOT JUSTIFIED IN GRANTING ANY OTHER RELIEF TO THE ASSESSEE BECAUSE THOSE ISSUES HAVE ALREADY ATTAI NED FINALITY BECAUSE THOSE ISSUES WERE NOT RESTORED TO THE FILE OF THE ASSESSING OFFICER BY THE TRIBUNAL IN FIRST ROUND . HENCE, ON THIS ISSUES ALSO, WE SET ASIDE THE ORDER OF CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10 /1 2 /2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR