M/s. Shree Shyam Kamal Industries Pvt. Ltd., Mumbai V. DCIT, New Delhi

ITA 1867/DEL/2010

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9006 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILESH KUMAR
• Assessee Lawyers: K SAMPATH ADV SH V RAJAKUMAR
• Keywords: Business income; Additional evidence; Cost of acquisition
• Section: 43B; 14A

Judgement Text

ITA NOS. 1867 & 2463/DEL/2010 SHREE SHYAMKAMAL INDS. PVT. LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G, NEW DELHI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 1867/DEL/2010 AY: 2006-07 SHREE SHYAM KAMAL INDUSTRIES PVT. LTD., 207, SHYAM KAMAL TRADE CENTRE, AGARWAL COMMERCIAL COMPLEX, VILLE PARLE EAST, MUMBAI. PAN NO. AAACS1045E VS . DCIT CIRCLE 8(1) NEW DELHI. (APPELLANT) (RESPONDENT) & ITA NO. 2463/DEL/2010 AY: 2006-07 ACIT CIRCLE 8(1) ROOM NO. 163, C.R. BUILDING, NEW DELHI. VS . SHREE SHYAM KAMAL INDUSTRIES PVT. LTD., 207, SHYAM KAMAL TRADE CENTRE, AGARWAL COMMERCIAL COMPLEX, VILLE PARLE EAST, MUMBAI. PAN NO. AAACS1045E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.SAMPATH, ADV. SH. V.RAJA KUMAR, ADV. DEPARTMENT BY : SH. SHAILESH KUMAR, SR. DR DATE OF HEARING : 10/12/2018 DATE OF PRONOUNCEMENT : 12/12/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT CROSS APPEALS HAVE BEEN FILED BY REVENUE AN D ASSESSEE AGAINST ORDER DATED 26/02/10 PASSED BY LD.CIT (A)-1 1, NEW ITA NOS. 1867 & 2463/DEL/2010 SHREE SHYAMKAMAL INDS. PVT. LTD. 2 DELHI FOR ASSESSMENT YEAR 2006-07 ON FOLLOWING GROU NDS OF APPEAL: ITA NO. 1867/DEL/2010 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S IN UPHOLDING THE SHORT TERM CAPITAL GAIN (STT PAID) OF RS. 5,44,596/- BEING PROFIT ON SALE OF SHARES AS BUSIN ESS INCOME. WHILE DOING SO, THE DETAILS/EVIDENCES FUR NISHED VIDE SUBMISSIONS DATED 25.11.2008 WITH ASSESSING OF FICER HAS COMPLETELY BEEN DISREGARDED. THE ARBITRARY SHI FTING OF HEAD OF INCOME HAS DEPRIVED THE APPELLANT COMPANY T HE BENEFIT OF LOWER TAX RATE @10% ON SHORT TERM CAPITA L GAINS U/S 111A OF THE INCOME TAX ACT. 2. THE LD. CIT(A), HAS ERRED IN SUSTAINING THE DISALLO WANCE OF RS. 57,852/- AS EXPENSES ATTRIBUTABLE TO EARN DIVID END INCOME OF RS.5,58,362/- U/S 14A READ WITH RULE 8D O F THE INCOME TAX ACT, WITHOUT APPRECIATING THAT THE CBDT NOTIFICATION NO.45/2008 DATED 24.03.2008 WAS EFFECT IVE FROM 01.04.2007 RELATED TO AY 2007-08 ONWARDS AND ARE NO T APPLICABLE FOR THE INSTANT ASSESSMENT YEAR. 3. THAT THE LD.CIT(A) HAS FURTHER ERRED ON FACTS AS WE LL AS IN LAW IN NOT ALLOWING GRATUITY OF RS.1,26,923/- PAID AND ALLOWABLE U/S 43B OF THE INCOME TAX ACT IN THE IMPU GNED ASSESSMENT YEAR BY HOLDING THAT ON THE FACE OF ORDE R NO DISALLOWANCE HAS BEEN MADE. THAT THE APPELLANT CRAVES TO ADD/MODIFY ANY ADDITIO NAL GROUND/GROUNDS AT THE TIME OF HEARING OF APPEAL. ITA NO. 2463/DEL/2010 1. LD.CIT(A) ERRED, IN LAW AND ON THE FACTS AND CIRCU MSTANCES OF THE CASE, IN DELETING THE DISALLOWANCE OF RS.25, 45,395/- MADE BY THE AO ON ACCOUNT OF EXPENSES, WITHOUT CONS IDERING THE REMAND REPORT SUBMITTED BY THE AO AND IN VIOLAT ION OF RULE 46A OF THE I.T. RULES. 2. LD. CIT(A) ERRED, IN LAW AND ON THE FACTS AND CIRCU MSTANCES OF THE CASE, IN HOLDING THAT THE COST OF ACQUISITION O F LAND SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WA S RS.82,59,311/- INSTEAD OF RS.20,00,000/- AS TAKEN B Y THE AO. ITA NOS. 1867 & 2463/DEL/2010 SHREE SHYAMKAMAL INDS. PVT. LTD. 3 3. THE APPELLANT CRAVES TO AMEND, MODIFY, ALTER, ADD O R FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING T HE HEARING OF THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE FILED ITS RETURN OF INCOME ON 29/11/06 DEC LARING TOTAL INCOME OF RS.1,26,37,017/-. THE CASE WAS SELECTED F OR SCRUTINY AND NOTICE UNDER SECTION 143(2)/142 (1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO ASSESSEE. IN RESPONSE TO STATUTORY NO TICES, REPRESENTATIVES OF ASSESSEE APPEARED BEFORE LD. AO AND FILED DETAILS. 2.1 LD.AO OBSERVED THAT ASSESSEE WAS ENGAGED IN MANUFACTURING OF INK USED IN NEWSPAPER PRINTINGS. I T WAS ALSO OBSERVED THAT ASSESSEE WAS ALSO DERIVING INCOME FRO M HOUSE PROPERTY. LD. AO CALLED FOR VARIOUS DETAILS AND COM PLETED THE ASSESSMENT UNDER SECTION 143 (3) OF THE ACT AT AN I NCOME OF RS. 2, 32, 26, 870/-BY MAKING FOLLOWING ADDITIONS: I) DISALLOWANCE OF EXPENSES DEBITED TO P&L ACCOUNT -R S. 25, 45, 395/- II) ADDITION ON PROFIT ON SALE OF SHARES HELD AS BUSINESS INCOME -RS . 5, 44, 596/- III) DISALLOWANCE UNDER SECTION 14 A -RS. 57, 852/- 3. AGGRIEVED BY THE ORDER OF LD. AO ASSESSEE PREFER RED APPEAL BEFORE THE LD.CIT (A). LD.CIT(A) PARTLY GRANTED RE LIEF TO ASSESSEE. 4. AGGRIEVED BY THE ORDER OF LD.CIT (A) BOTH ASSESS EE AS WELL AS REVENUE ARE IN CROSS APPEALS BEFORE US. 5. AT THE OUTSET, BOTH PARTIES SUBMITTED THAT, ASSE SSEE VIDE LETTER DATED 28/05/09 FILED BEFORE THE LD.CIT(A), APPLICAT ION FOR ADMITTING OF ADDITIONAL EVIDENCE UNDER RULE 46 (A) OF INCOME TAX RULES, 1963. THE SAID LETTER IS PLACED AT PAGE 325 OF PAPER BOOK. ITA NOS. 1867 & 2463/DEL/2010 SHREE SHYAMKAMAL INDS. PVT. LTD. 4 THEREAFTER, LD.CIT(A) VIDE LETTER DATED 02/06/09 FO RWARDED EVIDENCES TO LD.AO FOR EXAMINING THE SAME, AND TO F URNISH REPORT ON MERITS OF ISSUE UNDER DISPUTE. REMINDER WAS SENT ON 24/07/09, BY OFFICE OF LD.CIT (A), CALLING FOR REMA ND REPORT. THEREAFTER, LD.AO VIDE LETTER DATED 26/10/09 ISSUED LETTER TO ASSESSEE TO APPEAR IN REMAND PROCEEDINGS, AND A COP Y OF THE SAME WAS SENT TO LD.CIT (A), REQUESTING MATTER TO B E KEPT IN ABEYANCE TILL REMAND REPORT IS SENT. 5.1 IT HAS BEEN SUBMITTED THAT HOWEVER IN MEANWHILE LD.CIT(A) IN IMPUGNED ORDER RECORDED THAT REMAND REPORT HAS N OT BEEN RECEIVED. LD.CIT(A) DECIDED THE ISSUE IN ABSENCE OF REMAND REPORT BY PRESUMING THAT LD.AO HAS NOTHING TO SAY IN RESPE CT OF ISSUES RAISED BY ASSESSEE. 5.2 SUBSEQUENTLY, REMAND REPORT WAS SENT BY LD.AO O N 25/02/10 AND IN MEANWHILE LD.CIT(A) PASSED IMPUGNED ORDER ON 26/02/10. 5.3 BOTH PARTIES AGREE TO THE FACT THAT LD.CIT(A) D ID NOT HAVE BENEFIT OF REMAND REPORT, WHILE PASSING IMPUGNED OR DER. 6. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 7. ASSESSEE, IN APPLICATION FOR ADMISSION OF ADDITI ONAL EVIDENCE BEFORE LD.CIT (A) SUBMITTED THAT, NO MEANINGFUL OPP ORTUNITY WAS PROVIDED BY LD.AO DURING ASSESSMENT PROCEEDINGS. IT HAS ALSO BEEN SUBMITTED IN LETTER DATED 28/05/09 THAT, ASSES SING OFFICER DID NOT AFFORD ANY OPPORTUNITY TO ADDUCE EVIDENCE R ELEVANT TO GROUNDS OF APPEAL, BEFORE 1 ST APPELLATE AUTHORITY. 8. FURTHER, LD.CIT(A) IN PARA 3.1 REFERS TO FINAL O PPORTUNITY ADVANCED TO LD.AO TILL 26/02/10 FOR SUBMITTING THE REMAND ITA NOS. 1867 & 2463/DEL/2010 SHREE SHYAMKAMAL INDS. PVT. LTD. 5 REPORT. IT IS ALSO OBSERVED THAT LD.CIT (A) HAS NEI THER COMMENTED UPON APPLICATION FOR REDUCING OF ADDITIONAL EVIDENC E BY ASSESSEE, NOR HAS REJECTED THE APPLICATION. IT IS FURTHER OBS ERVED THAT WHILE DECIDING THE ISSUE LD.CIT(A) HAS NOT CONSIDERED REM AND REPORT DATED 25/02/10 BY LD.AO. WE ARE, THEREFORE, INCLIN ED TO SET ASIDE APPEAL BACK TO FILE OF LD. CIT (A) FOR RECONS IDERING ALL ISSUES IN LIGHT OF REMAND REPORT DATED 25/02/10 BY LD. AO. ACCORDINGLY, GROUNDS RAISED BY REVENUE AS WELL AS A SSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT APPEALS FILED BY REVENUE AS WELL AS A SSESSEES STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/12/2018 SD/- SD/- (N.S. SAINI) (BEENA A PILLAI) ACCOUNTANT MEMBER JUD ICIAL MEMBER DT. 12/12/2018 *KAVITA ARORA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NOS. 1867 & 2463/DEL/2010 SHREE SHYAMKAMAL INDS. PVT. LTD. 6 DATE 1. DRAFT DICTATED ON 11/12/2018 2. DRAFT PLACED BEFORE AUTHOR 11/12 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 12/12 6. KEPT FOR PRONOUNCEMENT ON 12/12 7. FILE SENT TO THE BENCH CLERK AND UPLOADED 12/12 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.