AGA Publications Ltd., Hyderabad V. Dy.CIT, Circle-1(1), Hyderabad

ITA 1297/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82583 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1297/HYD/2014 ASSESSMENT YEAR 2010-2011 AGA PUBLICATIONS LTD., HYDERABAD. PAN AABCA8511G VS. DCIT, CIRCLE 1(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. P. RAVISESHAGIRI RAO FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 26.11.2014 DATE OF PRONOUNCEMENT : 28.11.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS ASSESSEES APPEAL AGAINST THE EX-PARTE ORDERS OF LD. CIT(A)-II, HYDERABAD DATED 13.05.2014 . ASSESSEE HAS RAISED 20 GROUNDS RUN INTO 7 PAGES ON VARIOUS DISALLOWANCES MADE BY A.O. IN THE ASSESSMENT ORDER MOSTLY UNDER SECTION 40(A)(IA) LIKE EXPENDITURE ON SERVICE S , MARKETING COMMISSION, PRINTING CHARGES, ADVERTISEMENT COMMISS ION, RENTS, TRANSPORTATION, COURIER CHARGES PAID. 2. BRIEFLY STATED, ASSESSEE COMPANY FILED ITS RETU RN OF INCOME DECLARING LOSS OF RS.3,98,333. ASSESSEE IS P UBLISHER OF NATIONAL NEWS PAPER IN TELUGU BY NAME VAARTHA AND H AD INCURRED HUGE EXPENDITURE TOWARDS PRINTING CHARGES, MARKETING COMMISSION, ADVERTISEMENT COMMISSION, TRA NSPORT CHARGES ETC., WHEN A.O. VERIFIED THE BOOKS, HE FOUN D THAT MANY 2 ITA.NO.1297/HYD/2014 AGA PUBLICATION LTD., HYDERABAD. OF THESE TRANSACTIONS ATTRACTED TDS PROVISIONS AND ASSESSEE HAS NOT DEDUCTED ANY TAX. SINCE, SIMILAR DISALLOWAN CES ARE ALSO MADE IN EARLIER YEARS, A.O. PRIMA FACIE, FOLLOWING THE IDENTICAL FACTS THAT EXISTED IN A.Y. 2008-09 DISALLOWED ALL T HE AMOUNTS. HE ALSO NOTED DOWN THAT IN SOME ISSUES, ITAT HAS CA NCELLED THE PENALTIES AND DELETED INTEREST UNDER SECTION 20 1(1A) ON SIMILAR ISSUES WAY BACK IN A.Y. 1996-97 TO 1999-200 0. IT WAS ASSESSEES CONTENTION THAT MOST OF THE AMOUNTS ARE PAID TO SISTER CONCERNS AND THEY WERE CONSTITUTED TO OVERCO ME THE BACHAWAT AWARD RECOMMENDATIONS FOR HIGHER WAGES. BU T A.O. CONSIDERING THAT THOSE SISTER CONCERNS ARE INDEPEND ENT ENTITIES, DISALLOWED THE AMOUNTS INVOKING THE PROVI SIONS OF SECTION 40(A)(IA). IN THE PROCESS, THE LOSS WAS CON VERTED TO INCOME AND ASSESSED AT RS.18,90,17,720. 3. BEFORE THE LD. CIT(A), ASSESSEE CONTENDED VARIO US ISSUES. LD. CIT(A) GAVE THREE OPPORTUNITIES ON 11.0 4.2014, 29.04.2014 AND 13.05.2014. IN ALL THE THREE OCCASIO NS IN THE MONTH OF APRIL AND MAY, ASSESSEE SOUGHT ADJOURNMENT S, SOME ON THE REASON THAT THE CHARTERED ACCOUNTANT WHO HAS TO ASSIST WAS OUT OF STATION AND ALSO ON THE REASON THAT THE DETAILS IN SUPPORT OF THE CONTENTIONS ARE UNDER PREPARATION. S INCE THE CASE WAS ALREADY POSTED THREE TIMES, THE LD. CIT(A) WITHOUT DECIDING THE ISSUE ON MERITS, DISMISSED THE APPEAL ON THE REASON THAT ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL. ASSESSEE IN ADDITION TO SEEKING AN OPPORTUNITY BEFO RE LD. CIT(A), ALSO FILED ADDITIONAL EVIDENCE IN SUPPORT O F CONTENTIONS. 4. WITHOUT GOING INTO THE MERITS OF VARIOUS CONTENTIONS, WE ARE OF THE OPINION THAT THE ORDER O F LD. CIT(A) CANNOT BE SUSTAINED. FIRST OF ALL, LD. CIT(A) HAS N O POWER TO DISMISS THE APPEAL ON THE REASON THAT ASSESSEE IS N OT 3 ITA.NO.1297/HYD/2014 AGA PUBLICATION LTD., HYDERABAD. INTERESTED IN PURSUING THE APPEAL. LD. CIT(A) HAS T O DECIDE THE ISSUES ON MERITS CONSIDERING THE FACTS ON RECORD AN D PASS ORDERS, IF ANY BASED ON EARLIER YEARS, AS SIMILAR A DDITIONS WERE ALSO MAED IN EARLIER YEARS. SINCE, LD. CIT(A) REJEC TED THE ADJOURNMENT SOUGHT AND DISMISSED THE APPEAL, PRINCI PLES OF NATURAL JUSTICE REQUIRE THAT ASSESSEE SHOULD BE GIV EN AN OPPORTUITY TO JUSTIFY THE CLAIMS. SINCE ASSESSEE IS ALSO FILING ADDITIONAL EVIDENCE IN SUPPORT OF VARIOUS PAYMENTS MADE, WE ARE OF THE OPINION THAT THE ISSUE REQUIRES RE-EXAMI NATION BY A.O. THEREFORE, GIVING OPPORTUNITY TO ASSESSEE TO J USTIFY VARIOUS CLAIMS MADE, THE ORDER OF A.O. AND LD. CIT(A) ARE S ET ASIDE AND ISSUE OF ASSESSMENT IS RESTORED TO THE FILE OF A.O. TO DO ACCORDING TO LAW AND FACTS OF THE CASE. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH NOVEMBER, 2014 VBP/- COPY TO 1. AGA PUBLICATIONS LTD., HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA S ELEGANCE, H.NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. DCIT, CIRCLE 1(1), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 3. CIT(A)-II, HYDERABAD 4. CIT-I, HYDERABAD 5. D.R. ITAT B BENCH, HYDERABAD.