LOYAL MOTORS PVT LTD, MUMBAI V. D.C.I.T. CIRCLE 9(2), MUMBAI

ITA 1648/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6572 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 07-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Principle of natural justice; Additional evidence; Non passing of speaking order
• Section: 68; 144

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL MUMBAI - I BENCH MUMBAI . . , / ! ! ! ! , '# '# '# '# BEFORE S/SH. H.L.KARWA,PRESIDENT & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 1648/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR 2007-08 LOYAL MOTORS PVT. LTD. 5 JOLLY BHAVAN NO.2, GROUND FLOOR 7, NEW MARINE LINES, CHURCHGATE, MUMBAI- 400020 VS. DCIT CIRCLE 9(2), MUMBAI. PAN: AAACL7111Q ( &' / APPELLANT) ( ()&' / RESPONDENT) &' * / APPELLANT BY : NONE ()&' + * / RESPONDENT BY : SHRI RAVI PRAKASH $ $ $ $ + ++ + ,- ,- ,- ,- / DATE OF HEARING : 07-05-2014 ./% + ,- / DATE OF PRONOUNCEMENT : 07- 05- 2014 $ $ $ $ , 1961 + ++ + 254 )1( ,0, ,0, ,0, ,0, '1 '1 '1 '1 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM: CHALLENGING THE ORDER DATED 15.12.2010 OF THE CIT(A )-20,MUMBAI, ASSESSEE-COMPANY HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.0.ON FACTS AND CIRCUMSTANCES OF THE CASE AND: IN LAW, LD. CIT(A) ERRED IN NOT ADJUDICATING THE CASE ON MERITS FOR WANT OF PROSECUTION AND OUGHT TO HAVE CONSIDERED APPELLANTS ADJOURNMENT APPLICATIONS AND ERRED IN NOT ALLOWING ADEQUATE OPP ORTUNITY OF BEING HEARD; 2.0.ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. A.O ERRED IN MAKING ADDITION U/S.68 OF RS.6,36,91 8/- IN RESPECT OF UNSECURED LOAN INTRODU CED DURING THE YEAR; 3.0.ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. A.O ERRED IN MAKING DISALLOWANCE OF DEPRECIATION U/S.32 OF RS.40,933/- IN RESPECT OF AD DITION TO FIXED ASSETS MADE DURING THE YEAR; 4.0A HUMBLE PRAYER IS MADE TO ADMIT THE ADDITIONAL EVIDENCE ULR.46A BEING CONFIRMATION OF ACCOUNT, BILLS OF FIXED ASSETS AND OTHER DOCUMENTAR Y EVIDENCE AS IT GOES TO THE ROOT OF THE CASE. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND /OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2 .ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF TWO WH EELERS AND ACCESSORIES,FILED ITS RETURN OF INCOME ON 30.10.2007DECLARING A TOTAL INCOME OF RS. 33.68 LAKHS.ASSESSING OFFICER(AO)FINALISED THE ASSESSMENT U/S 144 OF THE ACT ON 24.12.2009 DET ERMINING THE INCOME OF THE ASSESSEE AT RS. 40.49 LAKHS.WHILE PASSING THE ORDER,AO HAD MADE ADD ITION U/S. 68 OF THE ACT (RS. 6.36 LAKHS) BESIDES DISALLOWING DEPRECIATION OF RS. 40,933/-. 3 .ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY (FAA).AS PER THE FAA APPEAL WAS FIXED FOR HEARING FROM TIME TO TIME. AFTER ADJO URNING THE MATTER AT THE REQUEST OF THE ASSESSEE, A LAST OCCASION OF HEARING WAS GIVEN TO THE COMPANY .BUT,NOBODY APPEARED ON BEHALF OF THE ASSESSEE NOR WAS ANY ADJOURNMENT SOUGHT. IN THESE C IRCUMSTANCES,FAA HELD THAT ASSESSEE WAS NOT INTERESTED IN PROSECUTING THE APPEAL. RESULTANTLY,H E DISMISSED THE APPEAL FILED BY THE ASSESSEE. 2 ITA NO. 1648/M/2011 LOYAL MOTORS PVT. LTD. 4 .BEFORE US,AUTHORISED REPRESENTATIVE (AR)SUBMITTED THAT DISMISSAL OF THE APPEAL,FILED BY THE ASSESSEE,BY THE FAA,WITHOUT ASSIGNING ANY REASON WA S NOT AS PER THE PROVISIONS OF THE ACT.HE RELIED UPON THE ORDER OF AHMEDABAD TRIBUNAL DELIVER ED IN THE CASE OF GUJARAT THEMIS BIOSYN LTD.(74ITD339).DEPARTMENTAL REPRESENTATIVE(DR) LEFT THE MATTER TO THE DISCRETION OF THE BENCH. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT FAA HAD NOT DECIDED THE APPEAL ON MERITS.PROVISIONS OF SECT ION 250(6) ENVISAGE THAT APPEAL SHOULD BE PASSED BY SPEAKING ORDER.EVEN IN CASE OF NON COOPER ATION FROM THE ASSESSEE,FAA HAS TO PASS THE ORDER ON MERITS ON THE BASIS OF AVAILABLE MATERIAL. BUT,DISMISSING AN APPEAL FOR NON APPEARANCE OF THE ASSESSEE HAS NOT BEEN APPROVED BY THE COURTS.NO T PROSECUTING AN APPEAL SHOULD NOT RESULT IN NON SPEAKING ORDER OR DISMISSAL OF THE APPEAL.IN TH E CASE OF BUILDWELL ASSAM (P.) LTD. (133 ITR 736)HONBLE ASSAM HIGH COURT HAS HELD AS UNDER: SECTION 250(6) OF THE I.T. ACT, 1961, PRESCRIBES T HE MANNER OF DISPOSAL OF AN APPEAL. AN ORDER MUST BE IN WRITING CONTAINING THE POINTS FOR DETERM INATION AND DECISION.THE OBJECT IS OBVIOUS. IT ENABLES A PARTY TO KNOW THE PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF FORMULATION OF POINTS FOR DECISION OR WANT OF CLARI TY IN DECISION PUTS A PARTY IN A QUANDARY. A DECISION AGAINST A PARTY ENABLES HIM TO GO UP IN AP PEAL.A DECISION BY ITS VERY NATURE MUST BE FIRM AND SHOULD NOT BE VAGUE AND UNCLEAR. WE WOULD ALSO LIKE TO REPRODUCE THE ORDER OF THE GU JARAT THEMIS BIOSYN LTD.(SUPRA)THAT READS AS UNDER : 3.WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCU MSTANCES OF THE CASE AS WELL AS SUBMISSIONS MADE BEFORE US.THE IMPUGNED ORDER PASSED BY THE CIT (A) IS CLEARLY VIOLATIVE OF THE EXPRESS PROVISIONS OF SECTION 250(6), WHICH PROVIDES THAT T HE APPELLATE ORDERS OF THE CIT(A) ARE TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE A UTHORITY THEREON AND THE REASONS FOR SUCH DECISION.THE UNDERLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE APPELLATE TRIBUNAL.SPEAKING ORDER WOULD OBVI OUSLY ENABLE A PARTY TO KNOW PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF TH E FORMULATION OF THE POINT FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDOUBTEDLY PUTS A PARTY I N QUANDARY.SECTION 250(6) EXPRESSLY EMBODIES THE PRINCIPLES OF NATURAL JUSTICE AND SUCH A PROVIS ION IS CLEARLY MANDATORY IN NATURE. THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPEALS) IN VIOLATION OF THE PROVISIONS OF SECTION 250(6) CANNOT, THEREFORE, BE SUSTAINED. REGARDING T HE DECISIONS OF THE DELHI BENCH OF THE TRIBUNAL IN MULTIPLAN INDIA (P.) LTD.'S CASE (SUPRA) CITED B Y THE LD. CIT(A),WE FIND THAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE.SECTION254 REFERRING TO THE ORDERS OF THE TRIBUNAL CONFERS PLENARY JURISDICTION ON THE TRIBUNAL IN THE MATTER OF PASSI NG ORDERS UNDER SECTION 254(1). THERE IS NO SUCH EXPRESS STIPULATION IN SECTION 254 AS CONTAINED UND ER THE PROVISIONS OF SECTION 250(6) RELATING TO THE ORDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, RELIANCE PLACED BY THE CIT(A) ON MULTIPLAN INDIA (P.) LTD.'S CASE (SUPRA) IS ENTIRELY MISPLACED. SIM ILARLY, THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR (SUPRA) CITED BY THE LD. CIT(A) IS DISTINGUI SHABLE AND DOES NOT SUPPORT THE VIEW TAKEN BY THE CIT(A). RESPECTFULLY FOLLOWING THE SAME,IN THE INTEREST OF JUSTICE,WE ARE RESTORING BACK THE MATTER TO THE FILE OF THE FAA FOR FRESH ADJUDICATION OF ALL THE I SSUE,RAISED BY THE ASSESSEE BEFORE HIM,BY A SPEAKING ORDER.HE IS DIRECTED TO AFFORD A REASONABL E OPPORTUNITY OF HEARING TO THE ASSESSEE.WE ALSO DIRECT THE ASSESSEE-COMPANY TO EXTENT FULL COO PERATION TO THE FAA. AS A RESULT, APPEAL FILED BY THE ASSESSEE -COMPANY IS ALLOWED FOR STATISTICAL PURPOSES. 2,3 2,3 2,3 2,3 $4, $4, $4, $4, 5 5 5 5 '6 '6 '6 '6 + ++ + 0 0 0 0 7+ 89: #;, 7+ 89: #;, 7+ 89: #;, 7+ 89: #;, + ++ + , , , , <= <=<= <= . ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH MAY,2014. '1 + ./% > ?'$ 7 , 2014 / + 0 @ 3 ITA NO. 1648/M/2011 LOYAL MOTORS PVT. LTD. SD/- SD/- ( . . / H.L.KARWA ) ( ! / RAJENDRA ) / PRESIDENT '# '# '# '# /ACCOUNTANT MEMBER / MUMBAI, ?'$ /DATE: 07 . 05.2014 SK '1 '1 '1 '1 + ++ + (,B (,B (,B (,B CB%, CB%, CB%, CB%, / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT (A) / D E , 4. THE CONCERNED CIT / D E 5. DR I BENCH, ITAT, MUMBAI / BF0 (,$ , . . . 6. GUARD FILE/ 0 2 )B, )B, )B, )B, (, (,(, (, //TRUE COPY// '1$ / BY ORDER, 8 / < DY./ASST. REGISTRAR , /ITAT, MUMBAI