M.P.R.O.P.Infrastructures(P) Limited, Rajahmundry V. The Assistant Commissioner of Income Tax, Circle-2(1), Rajahmundry

ITA 127/VIZ/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2530 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 19-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Keywords: Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 1 2 7 /VIZ/2019 ( / ASSESSMENT YEAR : 20 1 4 - 1 5 ) M/S MPROP INFRASTRUCTURES (P) LTD. 69 - 31 - 15/1 OPPOSITE FCI GODOWNS RAJAHMUNDRY [PAN : A AGCM8702N ] VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 2(1) RAJAHMUNDRY ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI , AR / RESPONDENT BY : S HRI D.K.SONOWAL , CIT DR / DATE OF HEARING : 1 8 . 0 6 . 201 9 / DATE OF PRONOUNCEMENT : 2 1 .06 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], RAJAMAHENDRAVARAM VIDE ITA NO.10003/2017 - 18/CIT(A)/RJY DATED 31.12.2018 FOR THE ASSESSMENT YEAR (A.Y.) 2014 - 15. 2 I.T.A. NO . 1 2 7 /VIZ/2019 M/S MPROP INFRASTRUCTURE (P) LTD., RAJAHMUNDRY 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ADDITION OF RS.11,68,704/ - MADE BY THE ASSESSING OFFICER (AO) WHICH WAS SET OFF AGAINST THE EXPENDITURE DEBITED TO P&L ACCOUNT. THE AO HELD THAT THE EXPENDITURE IS CAPITAL EXPENDITURE WHICH REQUIRED TO BE CAPITALIZED SINCE THE BUSINESS HAS NOT BEEN COMMENCED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. THE AO FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/S TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. COMMISSIONER OF INCOME TAX REPORTED I N 141 CTR SC 387 (1997). 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND DID NOT RESPOND TO THE NOTICES ISSUED BY THE LD.CIT(A). H ENCE THE LD.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE FOR NON - PROSECUTION. 4. AGAIN ST THE ORDER OF THE CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.AR ARGUED THAT THE LD.CIT(A) IS NOT PERMITTED TO DISPOSE THE APPEAL FOR NON - PROSECUTION AND ARGUED THAT THE LD.CIT(A) HAS TO DECIDE THE APPEAL O N MERITS. LD.AR FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE CIT(A) FOR THE REASONS BEYOND I T S CONTROL AND THE FACTS ARE AVAILABLE WITH THE LD.CIT(A) AND T HE 3 I.T.A. NO . 1 2 7 /VIZ/2019 M/S MPROP INFRASTRUCTURE (P) LTD., RAJAHMUNDRY LD.CIT(A) OUGHT TO HAVE DISPOSED THE APPEAL ON MERITS. HENCE, REQUESTED TO REM IT THE MATTER BACK TO THE FILE OF THE CIT(A) TO DECIDE THE APPEAL ON MERITS. 5. ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE ORDER OF THE LD.CIT(A). THE LD.CIT(A) DISMISSED THE APPEAL FOR NON - PROSECUTION WITHOUT GOING INTO THE MERITS OF THE CASE. THE LD.CIT(A) OUGHT TO HAVE PASSED THE ORDER ON MERITS AS PER THE AVAILABLE RECORD. THEREFORE, IN THE INTEREST OF JUSTICE, WE REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT(A) AND DIRECT THE CIT(A) TO ADJUDICATE THE APPEAL ON MERITS AFTER GIVING OPPORTUNITY TO THE ASSESSEE. THE LD.AR HAS BEEN DIRECTED TO COMPLY WITH THE NOTICES WITHOUT FAIL. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOS E. 4 I.T.A. NO . 1 2 7 /VIZ/2019 M/S MPROP INFRASTRUCTURE (P) LTD., RAJAHMUNDRY ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE 2019. S D / - S D / - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 21 .06.2019 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - M/S MPROP INFRASTRUCTURES (P) LTD. , 69 - 31 - 15/1 OPPOSITE FCI GODOWNS, RAJAHMUNDRY 2. / THE REVENUE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 2(1) RAJAHMUNDRY 3. THE PR. COMMISSIONER OF INCOME TAX , RAJAMAHENDRAVARAM 4. THE COMMISSIONER OF TAX (APPEALS) , RAJAMAHENDRAVARAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM