ITO 2(3)(1), MUMBAI V. SHREE VINDHYA CAST COATERS P. LTD, MUMBAI

ITA 1567/MUM/2012

• Counselvise Citation: 156719914 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 12-09-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 06-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C SRINIVAS REDDY
• Assessee Lawyers: N O N E
• Keywords: Depreciation; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 1567/MUM/2012 ASSESSMENT YEAR : 2003-04 ACIT - 2(3)) ROOM NO.552, 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. M/S. SHREE VINDHYA CAST COATERS PVT. LTD. INDIAN MERCHANT CHAMBERS, 3 RD FLOOR, 14-R KAMANI ROAD MUMBAI-400 001. PAN NO.AAACS 8089 A (APPELLANT) (RESPONDENT) ASSESSEE BY : NO NE REVENUE BY : SHRI C. SRINIVAS REDDY DATE OF HEARING : 12/09/2013 DATE OF PRONOUNCEMENT : 17 / 0 9 /2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) DATED 22.12.2011. REVENUE HAS RAISED THE FOLLOWING GROUND S WHICH IS MATERIAL FOR THE ISSUE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSE SSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUMERATED BELOW: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN ALLOWING RELIEF IN EXPENSES ON DG S ET AND ADDITION ON ACCOUNT OF SHARE CAPITAL, ON THE BASIS OF ADDITIONA L INFORMATION FURNISHED BY THE ASSESSEE IN CONTRAVENTION TO THE P ROVISIONS OF RULE 46A OF THE I.T. RULES. ITA NO.1567/M/12 A.Y.03-04 2 2. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASID E AND THAT OF AO RESTORED. 2. WHEN THE CASE WAS POSTED EARLIER ON 13.03.13, NO NE APPEARED ON BEHALF OF ASSESSEE. THEREFORE, A NOTICE BY RPAD WAS ISSUED POSITING THE CASE ON 12/09/2013. THIS RPAD WAS SERVED ON THE ASS ESSEE ON 08/06/2013 AND ACKNOWLEDGEMENT ON RECORD. HOWEVER, NONE APPEARED AGAIN. HENCE THE CASE WAS DECIDED EXPARTE RESPONDENT. WE ARE ALSO NOT INFORMED WHETHER ANY ASSESSEES CROSS APPEAL IS PEN DING. 3. THE ISSUE IN REVENUE APPEAL IS NOT ON MERITS BUT ON ALLOWING ADDITIONAL EVIDENCE U/S. 46A WITHOUT GIVING ANY OPP ORTUNITY TO THE ASSESSING OFFICER. 4. THE ORDER OF THE LD. CIT(A) IS AS UNDER : 2. IN COURSE OF APPEAL PROCEEDINGS, THE CASE WAS F IXED ON A MANY DATES STARTING FROM 24.04.2008 TO 22.12.2011. THE A PPELLANT FURNISHED CERTAIN DETAILS WHICH WERE FORWARDED TO A O VIDE THIS OFFICE LETTER DATED 31.06.2010. IN THE REMAND REPORT DATED 09.04.2011, THE AO STATED THAT THE ASSESSEE WAS ASKED TO FILE VARIO US DETAILS AND THE APPELLANT DID NOT FURNISH DETAILS ASKED FOR BY THE AO. IN COURSE OF APPEAL PROCEEDINGS, THE APPELLANT FURNISHED 38TH ANNUAL REPORT & ACCOUNT OF SHREE VINDYA PAPER MILLS LTD. AND SHRI JITENDRA LAHOTI, CA STATED THAT WHATEVER PAPER WAS REQUIRED TO BE FU RNISHED HAS BEEN FILED. THE APPELLANT WAS ASKED TO FURNISH THE DETAILS ASKED BY THE AO AND CA STATED ON 22.12.2011 THAT WHATEVER PA PERS WERE REQUIRED TO BE FURNISHED HAVE BEEN SUBMITTED AND NO FURTHER SUBMISSION WOULD BE FILED AS THE FACTORY IS CLOSED AND THERE ARE NO STAFF AND THE FACTORY HAS BEEN ATTACHED BY IDBI. THE APPELLANT ALSO FAILED TO PROVIDE CONFIRMATION FROM THE CREDIT ORS AND AO IN THE REMAND REPORT HAS AGAIN REITERATED THAT AS THE APPE LLANT HAS FAILED TO PROVE THE CREDITORS, THIS BEING CESSATION OF TRA DE LIABILITY, THE ADDITION MAY BE SUSTAINED U/S.41(1)(A) WITH RESPECT TO CREDITORS OF RS.43,74,475/-. THE APPELLANT HAS NOT GIVEN ANY REA SON AS TO WHY ACCRUED INTEREST IS RESTRICTED TO RS.1,13,91,556/- OUT OF RS.1,29,19,682/-, THEREFORE, THE ADDITION OF RS.15, 28,126/- U/S.43B IS VALID. THE EXPENDITURE ON DIGGING BOREWELL REMAI N UNPROVED THEREFORE DEPRECIATION OF RS.14,950/- WAS CORRECTLY DISALLOWED BY ITA NO.1567/M/12 A.Y.03-04 3 THE AO. WITH RESPECT TO UNSECURED LOANS, EVEN IN RE MAND PROCEEDINGS OR IN COURSE OF APPEAL PROCEEDINGS THE APPELLANT HAS FAILED TO ESTABLISH THE CREDITWORTHINESS AND GENUIN ENESS, THEREFORE, THE DISALLOWANCE OF UNSECURED LOANS IS FOUND TO BE VALID. 2.1 THE DG SET EXPENSES OF RS.10,50,000/-- WERE MAD E BY CHEQUE AND THE APPELLANT HAS FURNISHED COPY OF AGREEMENT W ITH M/S.TRANSPOWER. THE ADDITION OF RS.10,50,000/- IS, THEREFORE, FOUND TO BE NOT WARRANTED. SO FAR AS ADDITION IN SHARE CA PITAL IS CONCERNED, THE ADVANCE WAS GIVEN BY THE HOLDING COMPANY SHREE VINDHYA PAPER MILLS LTD. AND AT PAGE 16 OF THE 30TH ANNUAL REPORT & ACCOUNTS 2002-03 OF SHREE VINDYA PAPER MILLS, THE A MOUNT OF RS.4,51,85,753/- IS SHOWN FOR ALLOTMENT OF EQUITY S HARE TO SUBSIDIARY COMPANY SVCC. AT PAGE 14 OF THE ANNUAL A CCOUNT, IN THE LIST OF INVESTMENTS, IT IS SHOWN THAT THE SHARES OF THE APPELLANT COMPANY WHICH WERE SHOWN AS ON 31.03.2000 AT RS.4,5 00/- AND THE SAME STANDS AT RS.4,97,400/- AS ON 31.03.2001. THUS, THE ACCRETION OF SHARE CAPITAL OF RS. 4,88,500/- STANDS EXPLAINED AND THE ADDITION IS THEREFORE RESTRICTED TO RS.4,400/-. 5. WE ARE UNABLE TO UNDERSTAND THE GRIEVANCE OF THE REVENUE. THE LD. CIT(A) HAS REMANDED THE MATTER, ASSESSING OFFICER E XAMINED THE MATERIAL FILED AND SENT A REMAND REPORT ON 9.04.2011. WHATEV ER INFORMATION WAS AVAILABLE WITH THE ASSESSEE WAS FURNISHED. ASSESSEE EXPRESSED ITS INABILITY TO PROVIDE ANY MORE INFORMATION. LD. CIT( A) ACCORDINGLY CONFIRMED/DELETED THE ADDITIONS ON MERITS TO THE EX TENT INFORMATION WAS FURNISHED. WE DO NOT SEE ANY MERIT IN REVENUE GROUN DS AND ACCORDINGLY REJECTED. 6. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2013. SD/- SD/- (SANJAY GARG ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 17/09/2013. JV. ITA NO.1567/M/12 A.Y.03-04 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.