Crocodile Products Private Limited, Avanashi V. DCIT, Coimbatore

ITA 183/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4784 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 19-01-2017
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: B JAISHEILA
• Keywords: Reason to believe
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , # $ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI. G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 183/MDS/2017 #% % /ASSESSMENT YEAR : 2006-07 CROCODILE PRODUCTS PRIVATE LIMITED, 39A, EXTENSION STREET, KALKATTIPUDUR, AVINASHI 641 664. VS. DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE IV(2), COIMBATORE. [PAN: AABCC 2517F] ( / APPELLANT) ( /RESPONDENT) DEPARTMENT BY : SHRI. B. JAISHEILA, CA '(* + /RESPONDENT BY : SHRI. A.V. SREEKANTH, JCIT + /DATE OF HEARING : 30.03.2017 + /DATE OF PRONOUNCEMENT : 26.04.2017 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, COIMBATORE IN ITA NO. 91/14-15 ITA NO. 183/MDS/2017 :- 2 -: DATED 31.10.2016 PASSED ORDER U/S. 143(3) R.W.S. 14 7 OF THE INCOME TAX ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE ORDER OF THE ASSESSING OFFICER IS WITHOUT JURISDICTION. 3. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE REASSESSMENT WAS BAD IN LAW. 4. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSING OFFICER HAS NOT PROVIDED A COPY OF THE REASONS RECORDED FOR REOPENING. 5. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE ASSESSING OFFICER COULD NOT HAV E HAD A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. 6. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAS NOT ALLOW ED THE CLAIM OF EXPENDITURE OF RS.25,07,218/- BEING ROYALTIES OF RS .16,61,032/- AND COMMISSION TO MD OF RS.8,46,186/- PERTAINING TO ASSESSMENT YEAR 2005-06 WHICH IS ALLOWABLE U/S 40(A)(I) /40(A) (IA) IN THE IMPUGNED ASSESSMENT YEAR. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S IN THE BUSINESS OF TRADING IN READYMADE GARMENTS AND FILED THE RETURN OF INCOME WITH TOTAL LOSS OF @ 87,05,466/- FOR THE ASS T. YEAR 2006-07 ON 20.11.2016. THE RETURN OF INCOME WAS PROCESSED U/S . 143(1) OF THE ACT. THE ASSESSING OFFICER FIND FROM THE AUDIT REPORT FO RM 3CD THAT THE ASSESSEE HAS NOT DEDUCTED TDS IN RESPECT OF EXPENDI TURE OF @ 4,76,768/- ITA NO. 183/MDS/2017 :- 3 -: AND ISSUED NOTICE U/S. 148 OF THE ACT. THE LD. AO CONSIDERED THE FACTS AND THE ASSESSEE HAS REQUESTED FOR THE REASONS FOR RE-OPENING OF THE ASSESSMENT. THE ASSESSING OFFICER DISCUSSED THE CA SE WITH THE AUTHORISED REPRESENTATIVE AND MADE ASSESSMENT BY DI SALLOWING THE EXPENDITURE FOR NON-DEDUCTION OF TDS U/S. 40(A)(IA) OF THE ACT AND ASSESSED THE TOTAL LOSS OF @ 64,47,791/- BY ORDER D ATED 28.03.2014. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN A PPEAL WITH THE CIT(A) CHALLENGING THE VALIDITY AND RE-OPENING OF ASSESSMENT AND TO ALLOW THE EXPENDITURE IN ASST. YEAR 2006-07 WHICH W AS DISALLOWED IN THE EARLIER ASST. YEAR 2005-06. WHEREAS, THE LD. CIT(A ) CONSIDERED THE GROUNDS AND FINDINGS OF THE ASSESSING OFFICER ON TH E RE-OPENING AND ALSO THE ASSESSEE FILED ADDITIONAL GROUNDS IN THE APPELL ATE PROCEEDINGS REFERRED PAGE 3 TO 5 AT PARA 4 OF THE ORDER. THE LD. CIT(A) RELIED ON THE FINDINGS OF THE ASSESSING OFFICER AND THE ADDITIONAL GROUNDS IS OF THE OPINION THAT THE ASSESSING OFFICER HAS NOT MADE DISALLOWANCE OF ROYALTY AND COMMISSIONS PAYMENTS AND THEREFORE GROUNDS WERE NOT ADJUDICATED AND IN RESPECT OF CLAIM IN THE INCOME FROM OTHER SOURCE S, THE LD. CIT(A) ACCEPTED THE ASSESSEES CONTENTIONS AND ALLOWED THE APPEAL OF THE ASSESSEE. ITA NO. 183/MDS/2017 :- 4 -: 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL. BEFORE US, THE LD. AR AR GUED THAT THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACTS THAT THE AS SESSING OFFICER DOES NOT HAVE ANY JURISDICTION AND THE RE-ASSESSMENT PROCEED INGS ARE BAD IN LAW. THE ASSESSING OFFICER HAS NOT PRODUCED THE COPY OF REASONS FOR RE- OPENING OF THE ASSESSMENT. THE LD. CIT(A) HAS NOT ADJUDICATED THE GROUND ON THE VALIDITY OF RE-ASSESSMENT AND THE CLA IM OF ROYALTY AND COMMISSION PAYMENTS. THE LD. AR SUPPORTED THE ARGU MENTS WITH PAPER BOOK WITH DETAILS AND THE JUDICIAL DECISIONS ON THE RE-ASSESSMENT PROCEEDINGS AND PRAYED FOR ALLOWING THE APPEAL. CO NTRA, THE LD. DR RELIED ON THE ORDER OF THE CIT(A) AND OPPOSED THE GROUNDS. 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD AND JUDICIAL DECISIONS. THE MAIN CONTENTION OF THE LD. AR THAT THE ASSESSEE HAS ASKED FOR REASON FOR RE-OPENING OF THE ASSESSMENT, WHICH WAS NOT FURNISHED TO THE ASSESSEE. WE FIND THE HON 'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS VS. ITO & OTHERS 250 IT R 19 (SC) OBSERVED THAT THE ASSESSEE SHOULD BE PROVIDED WITH REASONS O N RE-OPENING OF THE ASSESSMENT TO FILE THE OBJECTIONS. AND THE ASSESSE E HAS RAISED SPECIFIC GROUND BEFORE THE CIT(A) ON THE VALIDITY OF RE-ASSE SSMENT AND WAS NOT ADJUDICATED, WHEREAS, THE LD. CIT(A) HAS ADJUDICATE D OTHER GROUNDS. WE ARE OF THE OPINION THAT THE CIT(A) IS DULY BOUND TO ADJUDICATE FIRST THE DISPUTED ISSUE RELATING TO RE-ASSESSMENT PROCEEDING S AND THERE AFTER SHALL ITA NO. 183/MDS/2017 :- 5 -: ADJUDICATE OTHER GROUNDS IF REQUIRED. ACCORDINGLY, WE REMIT THE ENTIRE DISPUTED ISSUE TO THE FILE OF THE LD. CIT(A) FOR FR ESH CONSIDERATION AND THE GROUNDS OF THE APPEAL ARE ALLOWED FOR STATISTICAL P URPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 26TH DAY OF APRI L, 2017 AT CHENNAI. SD/ - ( ) (CHANDRA POOJARI) /ACCOUNTANT MEMBER SD/ - ( . ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 1 / DATED: 26TH APRIL, 2017. JPV + '#34 54 / COPY TO: 1 . * / APPELLANT 2. '(* / RESPONDENT 3. 6 () / CIT(A) 4. 6 / CIT 5. 4 '## / DR 6. % / GF