JAGDAMBA INSULATION P LTD., Jaipur V. ITO, Jaipur

ITA 173/JPR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3010 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RI TESH
• Assessee Lawyers: FAZLUR RAHMAN KHAN
• Keywords: Opportunity of being heard; Assessment record
• Section: 143(3); 234B

Judgement Text

1 ITA 173-13 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI B.R. JAIN, ACCOUNTANT MEMBER ITA NO. 173/JP/2013 ASSTT. YEAR : 2008-09. M/S. JAGDAMBA INSULATION PVT. LTD., VS. THE INCOME TAX OFFICER, 121, JETPURA INDUSTRIAL AREA, WARD 7(3), UDYOG VIHAR, SIKAR ROAD, JAIPUR. JAIPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI FAZLUR RAHMAN KHAN RESPONDENT BY : MS ANITA RITESH DATE OF HEARING : 27.06.2013. DATE OF PRONOUNCEMENT : 27.06.2013. ORDER PER B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 6 TH NOVEMBER, 2012 OF LD. CIT (A)-III, JAIPUR RAISES THE FOLLOWING GROUNDS :- 1. THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN THE ORDER U/S 143(3) OF THE ACT DATED 30.11.2010 ARE BAD IN LAW A ND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHE R REASONS AND HENCE THE SAME KINDLY BE DELETED. 2. THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN HOLDING THAT THE GROUNDS RAISED BEFORE HIM WERE NOT COVERED BY THE PROVISIONS OF SEC. 246A(1)(A) OF THE ACT AND HENCE, HE FURTHER ERRED IN NOT ADMITTING THE SAME. THE LD. CIT (A) FU RTHER ERRED ON FACTS IN HOLDING THAT THE AR OF THE APPELLANT AGREE D TO THE A.OS PROPOSITION AND THAT FINDING OF THE A.O. HAS NOT RE SULTED INTO ANY ADDITION OF INCOME/REDUCTION OF LOSS AND HAS NOT IN CREASED THE TAX LIABILITY. THE FINDINGS SO RECORDED AND THE DECISIO N IS CONTRARY TO 2 THE PROVISIONS OF LAW AND FACTS OF THE CASE HENCE, THE SAME KINDLY BE REVERSED. 3. RS. 4,88,741/- : THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF INTEREST CLAIMED. THE DISALLOWANCE SO MADE BY THE A.O. AND C ONFIRMED BY THE LD. CIT (A) IS CONTRARY TO THE PROVISIONS OF LA W AND FACTS OF THE CASE. HENCE, THE SAME KINDLY BE DELETED IN FULL. 4. THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CONFIRMING THE APPLICATION OF SEC. 145(3) OF THE AC T. THE PROVISION SO INVOKED AND CONFIRMED BY THE CIT (A) BEING CONTR ARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME MAY KINDLY BE QUASHED. 5. THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CONFIRMING THE FOLLOWING FINDING RECORDED BY THE A. O. IN PARA 7 OF THE IMPUGNED ASSESSMENT ORDER :- FROM THE ABOVE DISCUSSION, IT IS CLEAR THE NEITHE R BOTH THE CONCERNS HAS PAID NOR CREDITED INTEREST TO THE ACCO UNT OF THE ASSESSEE, THEREFORE, DEBTORS CREATED BY THE COMPANY TO THE TUNE OF RS. 19,71,142/- AND RS. 1,24,306/- IN THE NAME OF M /S. MANGLAM INFRA GOLD LTD. INTEREST A/C AND M/S. GRASS WOOD RE SORTS PVT. LTD. INTEREST A/C RESPECTIVELY, IS TREATED AS BOGUS DEBT ORS AND IS NOT ALLOWED TO CARRY FORWARDED THE SAME IN FUTURE. 6. THE FINDING SO RECORDED BY THE A.O. AND CONFIRME D BY THE LD. CIT (A), IS WITHOUT JURISDICTION BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE, SUCH FINDING KINDLY BE QUASH ED WITH THE DIRECTION TO IGNORE THE CONSEQUENCE OR IMPLICATIONS , IF ANY RESULTING THERE FROM. 7. THE LD. A.O. FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B & 234C OF THE A CT. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING ANY SUCH INTEREST. THE INTEREST SO CHARGED, BEING CONTRARY TO THE PROV ISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 2. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD AN AFFIDAVIT FROM SHRI ARVIND KHANDELWAL, FCA INTER ALIA STATING THAT HE D OES NOT REMEMBER HAVING ADMITTED THE DISALLOWANCE OF BUSINESS LOSS CLAIMED BY THE AS SESSEE AT RS. 2,34,066/- IN THE MANNER STATED BY THE ASSESSING OFFICER WHEN HE ATTENDED T HE ASSESSMENT PROCEEDINGS BEFORE HIM 3 ON 25.2.2010. THE LD. D/R WAS PROVIDED A COPY OF T HE SAID AFFIDAVIT AND WAS REQUIRED TO PRODUCE ASSESSMENT RECORD AND ORDER SHEET ENTRY SHO WING THE ADMISSION, IF ANY, MADE BY SHRI ARVIND KHANDELWAL, FCA WHO MADE APPEARANCE IN ASSESSMENT BEFORE THE ASSESSING AUTHORITY. 3. THE LD. D/R ACTING UPON THE DIRECTIONS DATED 26. 2.2013 HAS PRODUCED THE ASSESSMENT RECORD AND HAS ALSO LAID ON RECORD COPY OF ORDER SHEET ENTRIES, COPY OF WHICH WAS ALSO PROVIDED TO ASSESSEES COUNSEL. 4. HEARD PARTIES. THE PERUSAL OF THE ORDER SHEET EN TRIES REVEAL THAT THERE WAS NO PROCEEDINGS TAKEN BY THE ASSESSING AUTHORITY IN THI S CASE ON 25.2.2010 THOUGH IN PARA 5 OF THE AFFIDAVIT SAID SHRI ARVIND KHANDELWAL, FCA MAKE S A STATEMENT TO THAT EFFECT WHILE DENYING THE ADMISSION OF DISALLOWANCE OF BUSINESS L OSS MADE BEFORE THE ASSESSING AUTHORITY. IN FACT, THERE WAS NEITHER ANY NOTICE N OR CASE WAS ADJOURNED FOR HEARING ON THAT DAY. THE ORDER SHEET ENTRIES CLEARLY REVEAL THAT T HE ADMISSION TO DISALLOWANCE OF BUSINESS LOSS WAS MADE ON 25.10.2010. THE DISCREPANCY IN DAT E OF MAKING APPEARANCE WITH THE DATE ON WHICH PROCEEDINGS WERE TAKEN BY THE ASSESSI NG OFFICER INSPIRES NO CONFIDENCE IN THE CORRECTNESS OF AFFIDAVIT MADE BY SAID SHRI ARVI ND KHANDELWAL. THE ASSESSEES COUNSEL, THEREFORE, WAS REQUESTED TO PRODUCE SHRI A RVIND KHANDELWAL FOR ASSERTING THE FACTS BEFORE THIS TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE, HAS HOWEVER, SHOWN HIS INABILITY TO PRODUCE HIM BEFORE THE APPELLATE TRIBU NAL AS SAID SHRI ARVIND KHANDELWAL IS STATED TO BE OUT OF INDIA. 5. I HAVE ALSO PERUSED THE IMPUGNED ORDER VIS--VIS THE GROUNDS RAISED IN APPEAL. THE LD. CIT (A) DISMISSED THE APPEAL FOR THE REASON THA T THE FINDINGS GIVEN BY THE ASSESSING AUTHORITY DO NOT RESULT INTO ANY ADDITION OF INCOME OR REDUCTION OF LOSS. SUCH FINDING, 4 HOWEVER, ARE CONTRARY TO MATERIAL ON RECORD IN AS M UCH AS THE APPELLANT HAS RETURNED NIL INCOME WHEREAS THE ASSESSMENT STOOD COMPLETED AT RS . 2,64,800/-. THE ASSESSEE THUS WAS AGGRIEVED WITH THE ASSESSMENT DETERMINING TOTAL INC OME AT RS. 2,64,800/- AND HAD TAKEN SUCH A GROUND AS GROUND NO. 1 IN APPEAL BEFORE LD. CIT (A). EVEN THOUGH THE ASSESSEE HAD CLAIMED BEFORE LD. CIT (A) THAT THE ASSESSING O FFICER WRONGLY RECORDED THE ADMISSION AS THE SAME WAS NOT DONE IN THE MANNER IN WHICH THE AO TOOK IT ON RECORD YET IT REQUIRED ENQUIRY INTO THE FACTS AS TO WHETHER TH E ASSESSEE HAD REALLY SET UP HIS BUSINESS REQUIRING DEDUCTION OF EXPENSES CLAIMED AS REVENUE AND ALSO ENQUIRY INTO THE GENUINENESS OF LOANS ADVANCED. THE LD. CIT (A), HOWEVER, DID NO T NARRATE THE COMPLETE FACTS WHICH COULD ENABLE ME TO REACH CONCLUSION IN THE GROUNDS RAISED IN APPEAL BY THE APPELLANT. IN ORDER TO RENDER SUBSTANTIAL JUSTICE TO THE PARTIES, I CONSIDER IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER BACK TO LD. CIT (A) SO THAT THE ENQUIRY INTO THE FACTS IS EMBARKED AFRESH AND ASSESSEES GROUNDS IN APPEAL BEFORE HIM ARE DECIDED IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD PARTICULARLY WHEN THE ASSESSEE HAD DENIED OF MAKING THE ADMISSION OF DISALLOWANCE OF LOSS IN THE MANNER AS STATED BY THE ASSESSING OFFIC ER THAT TOO WITHOUT CONCURRENCE OF THE APPELLANT ASSESSEE. 6. IN THE RESULT, APPEAL BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES ONLY AS ANNOUNCED IN THE OPEN COURT IN PRESENCE OF THE PART IES IMMEDIATELY AFTER CONCLUSION OF HEARING ON 27.06.2013. SD/- ( B.R. JAIN ) ACCOUNTANT MEMBER JAIPUR, DATED : 27/06/2013. 5 D/- COPY FORWARDED TO :- M/S. JAGDAMBA INSULATION PVT. LTD., JAIPUR. THE ITO WARD 7(3), JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 173/JP/2013) BY ORDER, AR ITAT JAIPUR.