AMBERNATH PLASTO PACKAGING P. LTD, MUMBAI V. ITO WD 2(1)(1), MUMBAI

ITA 1763/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0354 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Depreciation; Opportunity of being heard
• Section: 147

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1763/MUM/2017 ( / ASSESSMENT YEAR: 2009 - 10 ) AMBERNATH PLASTO PACKAGING PRIVATE LIMITED SAMBHAVA CHAMBERS, 4 TH FLOOR, SIR P. M. ROAD, FORT, MUMBAI - 400 001 / VS. ITO, WARD 2(1)(1), AAYAKAR BHAVAN, MUMBAI ./ ./ PAN/GIR NO. AAACA 4406 H ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. DINKLE HARIYA / RESPONDENT BY : MS. N. HEMALATHA / DATE OF HEARING : 16.11.2017 / DATE OF PRONOUNCEMENT : 05.02 .2018 / O R D E R PER S HAMIM YAHYA , A. M.: THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 22.12.2016 AND PERTAINS TO THE A SSESSMENT YEAR 2009 - 10. 2. THE GROUNDS OF APPEAL READ AS UND ER: 2 ITA NO. 1763/MUM/2017 (A.Y. 2009 - 10) AMBERNATH PLASTO PACKAGING PRIVATE LIMITED VS. ITO 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE REOPENING OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT, 1961. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED CONFIRMING THE DISALLOWAN CE OF RS. 5056/ - OUT OF PURCHASES OF RS. 44,057/ - FROM NEWSPARK TRADING COMPANY PRIVATE LIMITED AND ADDITION OF THE SAME TO TOTAL INCOME AS NON GENUINE TRANSACTION. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THAT RENT RECEI VED BY THE APPELLANTS FOR PART OF THE BUILDING IS INCOME FROM HOUSE PROPERTY AND NOT PROFITS AND GAINS OF BUSINESS AS COMPUTED BY THE APPELLANTS. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING DEPRECIATION ON ALL THE ASSETS INCLU DING PART OF THE BUILDING GIVEN ON RENT. 5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING A LL THE EXPENSES TOTALING TO RS. 6,16,332/ - . 6) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DOUBLE DISALLOWANCE OF RS. 1,95,833/ - , ONCE DISALLOWED IN COMPUTATION OF INCOME BY THE APPELLANTS AND AGAIN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 3. AT THE OUTSET IN THIS CASE CHALLENGING THE REOPENING THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE WAS NO ES CAPEMENT OF INCOME ENVISAGES ON ACCOUNTS O F THE REASON RECORDED FOR REOPENING INASMUCH AS THE ASSESSEE HAD NOT DEBITED THE AMOUNT PURCHASED. THE IMPUGNED TRANSACTION WAS DEBITED TO THE CAPITAL WORK - IN - PROGRESS AND NO DEPRECIATION THERE WAS ALSO CLAIMED. HE NCE, THE COUNSEL SUBMITTED THAT THE REASON RECORDED THAT THERE WAS ESCAPEMENT OF INCOME WAS TOTALLY WRONG. IN THESE CIRCUMSTANCES, HE PLACED RELIANCE UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF RECKITT BENCKISER HEALTHCARE INDIA LTD. VS. ASST. CIT [2014] 360 ITR 427 (GUJ) . IN THIS CASE , THE HONBLE HIGH COURT HAS EXPOUNDED THAT NOTICE FOR 3 ITA NO. 1763/MUM/2017 (A.Y. 2009 - 10) AMBERNATH PLASTO PACKAGING PRIVATE LIMITED VS. ITO REO PENING HAS TO BE HELD TO BE INVALID WHEN THE EXPENDITURE IS NOT ACTUALLY DEBITED AND THE REASON OF REOPENING CLAIMS THAT I NCOME ON THIS ACCOUNT. 4. UPON HEARING BOTH THE COUNSELS, I FIND THAT THIS ASPECT OF CHALLENGE OF REOPENING WAS DULY MADE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), BUT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS LACONICALLY DISMISSED THE ISSUE BY OBSERVING AS UNDER : AFTER CONSIDERING THE SUBMISSION OF THE APPELLANT THE A.O. HAS HELD THAT SINCE THE APPELLANT HAS ESCAPED THE INCOME, HE HAS REOPENED THE CASE. I DID NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE A.O. AND HENCE, DISMISSED. 5. I FIND THAT ON ACC OUNT OF THE ABOVE LACONIC ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND NON CONSIDERATION OF THE SUBMISSIONS IN THIS REGARD , IT IS APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS DIRECTED TO CONSIDER THE ISSUE AFRESH IN LIGHT OF OUR OBSERVATIONS AND THE ASSESSEES SUBMISSIONS AS ABOVE. THE ISSUE AS TO WHETHER THE IMPUGNED EXPENDITURE WAS DEBITED IN THE ACCOUNT OR NOT ALSO NEEDS TO BE INVESTIGATED . NEEDLES S TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. SINCE I AM REMITTING THE ISSUE ON ACCOUNT OF REOPENING ITSELF, NO ADJUDICATION OF MERIT IS BEING DONE. THE PARTIES ARE AT LIBERTY TO PURSUE THE MATTER IN CONSEQUENCE TO THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER THIS REMAND. 4 ITA NO. 1763/MUM/2017 (A.Y. 2009 - 10) AMBERNATH PLASTO PACKAGING PRIVATE LIMITED VS. ITO 6. IN THE RESULT, TH IS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2018 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 05.02.2018 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI