Sharon Solutions Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1511/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96146 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 26-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: K BALASUBR AMANIAN
• Keywords: Opportunity of being heard

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO .1511/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) M/S. SHARON SOLUTIONS LTD. 520, M.K.N. ROAD, ALANDUR, CHENNAI-600 016. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-6(1) CHENNAI. PAN: AAFCS8729J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. K.BALASUBRAMANIAN, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 1 ST SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 23 RD SEPTEMBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-15, CHE NNAI DATED 20.01.2015 FOR THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT HIGH COURT OF MADRAS APPOINTED PROVISIONAL OFFICIAL LIQUIDATOR TO MANAGE THE AFFAI RS OF THE APPELLANT COMPANY AT THE RELEVANT TIME WHO DID NOT PURSUE THE APPEAL FILED BY THE APPELLANT. AUTHORITIES BELOW ERRED IN DISALLOWING LIQUIDATED D AMAGES OF ` 1,36,68,263/- CLAIMED BY ASSESSEE IN SPITE OF THE FACT THAT ASSESSING OFFICER IN PARA 2.5 OF THE ORDER AGR EED THAT THIS CLAIM IS ALLOWABLE DEDUCTION AND THAT IN TERMS OF AGREEMENT ASSESSEE IS LIABLE TO PAY LIQUIDATED DAMA GES. 2 ITA NO.1511/MDS/2015 AUTHORITIES BELOW ERRED IN DISALLOWING THE ABOVE CL AIM FOR WANT OF EVIDENCE THOUGH THE FACT REMAINS THAT PURCH ASERS HAVE DEDUCTED LIQUIDATED DAMAGES FROM THE PAYMENTS DUE TO THE ASSESSEE. AUTHORITIES BELOW ERRED IN TREATING ` 43,71,255/- AS OTHER INCOME FOR THE PURPOSES OF COMPUTATION OF DEDUCTION U/S.80IB. 3. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITS THAT THERE WAS NO REPRESENTATION ON BEHALF OF THE ASSESS EE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE RE ASON THAT THE COMPANY WAS UNDER LIQUIDATION AND THE HON BLE HIGH COURT OF MADRAS APPOINTED PROVISIONAL OFFICIAL LIQ UIDATOR TO MANAGE THE AFFAIRS OF THE ASSESSEE COMPANY AT THE R ELEVANT TIME, WHO DID NOT PURSUE THE APPEAL BEFORE THE COMM ISSIONER OF INCOME TAX (APPEALS). COUNSEL FOR THE ASSESSEE S UBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) DECIDED T HE ISSUES ON MERITS BASED ON THE AVAILABLE INFORMATION STATING THAT THERE WAS NO EVIDENCE FOR THE CLAIMS MADE BY T HE ASSESSEE IN ITS APPEAL. COUNSEL FOR THE ASSESSEE SU BMITS THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE LOWER AUTHORITIES TO SUBSTANTIATE THE CLAIMS OF THE ASSES SEE SINCE THE ASSESSEE COULD NOT ENGAGE AUTHORIZED REPRESENTA TIVE AS THE ASSESSEE COMPANY WAS UNDER LIQUIDATION AND IN T HE PROCESS OF APPOINTING OFFICIAL LIQUIDATOR. REFERRIN G TO THE 3 ITA NO.1511/MDS/2015 ASSESSMENT ORDER, COUNSEL FOR THE ASSESSEE SUBMITS THAT IN FACT THE ASSESSEE BEFORE THE ASSESSING OFFICER IN RESPECT OF LIQUIDATED DAMAGES SUBMITTED THAT LETTERS AND REMIN DERS HAVE BEEN SENT TO PARTIES BUT NO CONFIRMATIONS HAVE BEEN RECEIVED. FURTHER, THE COUNSEL REFERRING TO PARA 2. 5 OF THE ASSESSMENT ORDER SUBMITS THAT ASSESSING OFFICER HIM SELF ADMITS THAT CLAIM FOR LIQUIDATED DAMAGE IS ALLOWABL E DEDUCTION PROVIDED THERE IS AN EVIDENCE TO PROVE TH AT CLIENTS HAVE CHARGED SUCH DAMAGES FROM THE ASSESSEE. COUNS EL FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE IS HAVING AL L THE EVIDENCES AND CAN SUBSTANTIATE THE CLAIMS BEFORE TH E LOWER AUTHORITIES. 4. DEPARTMENTAL REPRESENTATIVE HAS NO SERIOUS OBJEC TION IN SENDING BACK THE ISSUES TO THE LOWER AUTHORITIES . 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) DISPOSED O FF THE APPEAL ON MERITS AS NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE. IT IS THE SUBMISSION O F THE ASSESSEE THAT COMPANY WAS UNDER LIQUIDATION AND IN THE PROCESS OF APPOINTING OFFICIAL LIQUIDATOR THUS AUTH ORIZED 4 ITA NO.1511/MDS/2015 REPRESENTATIVE COULD NOT BE ENGAGED BY THE ASSESSEE COMPANY. ON HEARING BOTH THE PARTIES, WE ARE OF TH E CONSIDERED VIEW THAT THE MATTER HAS TO BE DECIDED A FRESH BY THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER GIVI NG ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE , AS THE OFFICIAL LIQUIDATOR IS NOW INTERESTED IN PROSECUTIN G THE APPEAL. THUS, WE SET ASIDE THE IMPUGNED ORDER AND REMIT TH E MATTER BACK TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHO SHALL DECIDE THE ISSUES IN ACCORDANCE WITH LAW, AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2015. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 23 RD SEPTEMBER, 2015 SOMU 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .