E-comEnable Pvt.Ltd., Baroda V. The Income tax Officer,Ward-1(2), Baroda

ITA 1353/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60319 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-05-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NO.1353/AHD/2011 A. Y. 2001-02 E-COMENABLE PVT. LTD. 210 ARUNDEEP COMPLEX, RACE COURSE, GOTRI ROAD BARODA PAN-AAACE8567D APPELLANT VS. ITO, WARD-1(2), AAYAKAR BHAVAN, RACE COURSE, VADODARA RESPONDENT DEPARTMENT BY : SHRI VINOD TANWANI, SR. D.R. ASSESSEE BY : SHRI BHAVIN MARFATIA, A.R. DATE OF HEARING : 08.05.2012 DATE OF PRONOUNCEMENT : 08.05.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS ASSESSEES APPEAL AGAINST THE EXPARTE ORDER OF LD. CIT(A)-1, BARODA DATED 17.02.2011 PASSED IN APPEAL NO.CAB-1/2 9/04-05. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL:- 1. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN PASSI NG THE ORDER EXPARTE. 2. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONF IRMING THE ACTION OF AO IN MAKING AN ADDITION OF RS.8,00,000/- BEING EXP ENSES INCURRED ON ESOP (EMPLOYEES STOCK OPTION PLAN) AND TREATED BY THE APPELLANT AS DEFERRED REVENUE EXPENDITURE IN CONNECTION WITH GEN ERALLY ACCEPTED ITA NO.1353/AHD/2011 , A.Y. 2001-02 2 ACCOUNTING PRACTICES ON THE GROUND THAT THE SAID EX PENSES ARE BOGUS EXPENSES. 3. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFI RMING THE ACTION OF AO IN DISALLOWING DEPRECIATION AMOUNTING TO RS.1,11 ,86,334 ON TECHNICAL KNOW HOW ON THE GROUND THAT THE APPELLANT HAS NOT P AID TAX U/S 195 OF THE INCOME TAX ACT, 1961, DESPITE THE FACT THAT THE TAX THEREON IS ALREADY PAID. 4. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFI RMING THE ACTION OF AO IN DISALLOWING CONSULTANCY FEES OF RS.3,30,000. THE LD. CIT(A) FURTHER ERRED IN FACT IN STATING THAT THE APPELLANT HAD NOT PRODUCED ANY EVIDENCE REGARDING THE CLAIM OF THE SAID EXPENSES DESPITE TH E FACT THAT NO EXPLANATION WAS CALLED FOR AT THE TIME OF ASSESSMEN T PROCEEDINGS. 5. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFI RMING THE ACTION OF AO IN DISALLOWING RS.1,58,250/- OUT OF MISCELLANEOU S EXPENSES ON THE GROUND THAT THE SAID EXPENSES ARE CAPITAL IN NATURE . 6. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFI RMING THE ACTION OF AO IN MAKING A DISALLOWANCE OF RS.14,99,850 BEING D ISCOUNT ALLOWED BY THE APPELLANT WITHOUT GIVING ANY COGENT REASONS AND PURELY BASED ON ASSUMPTIONS, SURMISES AND CONJECTURES. 7. THE LD. CIT(A) ERRED IN FACT AND IN LAW IN CONFI RMING THE ACTION OF AO IN INITIATING PENALTY PROCEEDINGS U/S 271(1) OF INCOME TAX ACT, 1961. 3. AT THE TIME OF HEARING, AT THE OUTSET, LD. COUN SEL OF THE ASSESSEE SUBMITTED THAT THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED BY THE LD. CIT(A) BY PASSING AN EXPARTE ORDER. IT WAS FURTHER ARGUED THAT SINCE THE COMPANY WAS CLOSED, THE ASSESSEE DID NOT RECEIVE ANY NOTICE FOR HEARING, ISSUED BY THE OFFICE OF THE LD. CIT(A). THIS FACT IS ALSO BORNE OUT FRO M THE FACT THAT WHEN LD. CIT(A) ASKED FOR THE REMAND REPORT FROM THE A.O. ON THE WR ITTEN SUBMISSIONS FILED BY THE ASSESSEE ALONG WITH APPEAL MEMO, THE A.O. HAS M ENTIONED ITS REPORT TO LD. CIT(A) THAT COMPANY WAS CLOSED AND THEREFORE NOTICE S WERE RETURNED BY THE POSTAL AUTHORITIES. HE, THEREFORE, PRAYED THAT IN THE INTEREST OF NATURAL JUSTICE AND FAIR PLAY, THE MATTER MAY KINDLY BE RESTORED BA CK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE ON THE ISSUES INVOLVED IN THIS APPEAL. HE ALSO GAVE AN UNDERTAKING TO COOPERATE WITH THE APPEAL PROCEEDINGS BEFORE LD. CI T(A). LD. D.R. DID NOT ITA NO.1353/AHD/2011 , A.Y. 2001-02 3 OBJECT TO THIS PRAYER OF THE LD. COUNSEL OF THE ASS ESSEE. THEREFORE, IN THE INTEREST OF NATURAL JUSTICE AND FAIR PLAY, THE MATT ER IS RESTORED BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION AFTER PROVIDING S UFFICIENT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALS O DIRECTED TO COOPERATE WITH THE APPEAL PROCEEDINGS BEFORE LD. CIT(A). 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. . SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JU DICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. - 08/05/2012 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. !' / CONCERNED CIT 4. !' - / CIT (A) 5. #$% , & , / DR, ITAT, AHMEDABAD 6. %'( )* / GUARD FILE. BY ORDER/ , + / , & ,