BEENA SILK MILLS, MUMBAI V. A.C.I.T. CIRCLE 23(2), MUMBAI

ITA 1836/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93173 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 01-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY NARULA
• Section: 143(3); 68

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI A.D. JAIN, JM AND SHRI N.K. BILLAIYA, A M .. , . . , ./ I.T.A. NO. 1836 /MUM/2011 ( / ASSESSMENT YEAR : 2006-07 M/S BINA SILK MILLS,, BALRAJESHWAR ROAD, MULUND (W), MUMBAI 400 080. / VS. ACIT CIRCLE 23(2), PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI. ./ PAN : AABFB8748B ( ! / APPELLANT ) .. ( '# ! / RESPONDENT ) A PPELLANT BY SHRI VIJAY NARULA R E SPONDENT BY : SHRI PAVAN KUMAR BEERLA $ % & ' ( ) / DATE OF HEARING : 08-07-2015 *+,- ' ( ) / DATE OF PRONOUNCEMENT : 08-07-2015 [ . / O R D E R PER A.D. JAIN, J.M . : .. , THIS IS ASSESSEES APPEAL FOR A.Y. 2006-07. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE HON. CIT (APPEALS) ERRED IN CONFIRMING ORDE R OF THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 23(2), MUMBAI, ( HEREINAFTER REFERRED TO AS THE LEARNED DCIT), UNDER SECTION 143(3) R.W.S 147 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE APPELLANT PRAYS FOR THE SAID ORDER BE ANNULLED AND QUASHED, SINCE IT HAS BEEN MADE WITH T HE INTENT TO PUNISH THE APPELLANT AND IS CONTRARY TO THE FACTS OF THE CASE. 2. WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, THE HON. CIT(APPEALS) ERRED IN CONFIRMING THE FOLLOWING ADDITIONS MADE BY THE LEAR NED DC IT TO THE APPELLANT'S TOTAL INCOME BE DELETED, AS THEY HAVE B EEN MADE WITHOUT ITA 1836/M/11 2 APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E AND THE APPLICABLE PROVISIONS OF THE ACT :- UNSECURED LOANS CONSIDERED AS CASH CREDITS U/S 68 RS. 46,05,000.00 DISALLOWANCE U/S 41 (1) - RS. 16,00,000.00 SHORT TERM CAPITAL GAIN ON SURRENDER OF RIGHTS OF - RS. 1,90,000.00 PREMISES TAXED AS UNDISCLOSED INCOME SHORT TERM CAPITAL GAIN-U/S 50 - RS. 30,11,384.00 2. AT THE OUTSET, SHRI VIJAY NARULA, PARTNER OF THE ASSESSEE COMPANY, WHO APPEARED BEFORE US IN PERSON, EXPRESSED THAT GROUND NO. 1 WAS NOT BEING PRESSED. ACCORDINGLY, GROUND NO. 1 IS REJECTED AS N OT PRESSED. 3. APROPOS GROUND NO. 2, THE FOLLOWING ADDITIONS WE RE MADE BY THE A.O.:- 1. UNSECURED LOANS CONSIDERED AS CASH CREDITS U/S 68 RS.46,05,000.00 2. DISALLOWANCE U/S 41(1) RS.16,00,000.00 3. SHORT TERM CAPITAL GAIN ON SURRENDER OF RIGHTS OF PREMISES TAXED AS UNDISCLOSED INCOME RS.1,90 ,000.00 4. SHORT TERM CAPITAL GAIN U/S 50 RS.30,11,384 .00 4. THE LD. CIT(A) PASSED THE IMPUGNED ORDER CONFIRM ING THE AFORESAID ADDITIONS. THE ORDER WAS PASSED EX-PARTE QUA THE AS SESSEE. A PERUSAL OF PARA 7 OF THE IMPUGNED ORDER SHOWS THAT VIDE LETTER DATE D 23-11-2010, THE ASSESSEE HAD REQUESTED FOR AN ADJOURNMENT OF THE HE ARING OF THE APPEAL, FIXED FOR 24-11-2010 BEFORE THE LD. CIT(A). IN THE LETTER FOR ADJOURNMENT, THE ASSESSEE HAD CONTENDED THAT ITS OPERATIONS HAD CLOS ED DOWN AND IT WAS IN A DEEP FINANCIAL CRISIS; THAT THE ASSESSEES ACCOUNTA NT/STAFF HAD LEFT AND THE ASSESSEE HAD NO ACCOUNTS AVAILABLE FOR DATA/DOCUMEN TS, TO BE ABLE TO MEANINGFULLY RESPOND TO THE LD. CIT(A). IT WAS ALSO STATED THAT THE SUDDEN DEMISE OF MR. AJAY NARULA, PARTNER, HAD FURTHER HAN DICAPPED THE ASSESSEE. 5. IN PARA 8 OF THE ORDER, THE LD. CIT(A) OBSERVED THAT VIDE NOTICE DATED 1-12-2010, THE CASE WAS FIXED FOR HEARING ON 27-12- 2010 AND THE ASSESSEE ITA 1836/M/11 3 HAD AGAIN FILED AN ADJOURNMENT LETTER DATED 27-12-2 010. FROM A BARE PERUSAL OF THESE FACTS, IT IS EVIDENT THAT THE ASSESSEE WAS UNDERGOING A BIG FINANCIAL CRISIS, AS ITS ACCOUNTANT/STAFF HAD LEFT, AS ALSO O NE OF THE PARTNERS HAD EXPIRED. THESE FACTS WERE INTIMATED TO THE LD. CIT (A) VIDE LETTER DATED 23-11- 2010. THE LD. CIT(A) ISSUED ANOTHER NOTICE DATED 1 -12-2010 AND THE CASE WAS FIXED FOR HEARING ON 27-12-2010, ON WHICH DATE THE ASSESSEE SOUGHT FURTHER ADJOURNMENT. NOW, OBVIOUSLY, IN THE GIVEN SET OF C IRCUMSTANCES, IT WAS WELL-- NIGH IMPOSSIBLE FOR THE ASSESSEE TO RECOUP AND RECO VER FROM ITS CRISIS SO AS TO EFFECTIVELY REPRESENT THE MATTER BEFORE THE LD. CIT (A). THE ADDITION UNDER CONSIDERATION, IT IS SEEN, IS SUBSTANTIAL AND THE M ATTER REQUIRES PROPER APPLICATION OF MIND. THEREFORE, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER GIVING SUFFICIENT OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. NO DOUBT, THE ASSESSEE SHALL CO-OPERATE W ITH THE A.O. IN THE REMAND PROCEEDINGS. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08-07-2015 JULY, 2015. . ' *+,- $ /0 1 2 08-07-2015 + ' 3& SD/- SD/- (N.K. BILLAIYA) (A.D. JAIN ) ACCOUNTANT MEMBER /J UDICIAL MEMBER / $ & MUMBAI ; 1 DATED 16-7-2015 [ %.../ R.K. R.K. R.K. R.K. , SR. PS ITA 1836/M/11 4 ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $ F( () / THE CIT(A)-33, MUMBAI 4. $ F( / CIT- 23, MUMBAI 5. I%J 3 '(KL , ) KL- , / $ & / DR, ITAT, MUMBAI G BENCH 6. 3 M N & / GUARD FILE. ! ( / BY ORDER, # I( '( //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , / $ & / ITAT, MUMBAI