Cat Cosmetics & Healthcare Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(3), Ahmedabad

ITA 1874/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8120 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 22-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJDEEP SINGH SRDR
• Keywords: Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER I.T.A. NO.1874/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) CAT COSMETICS & HEALTHCARE PVT. LTD. B/505, INFINITY TOWER CORPORATE ROAD, NR. RAMADA HOTEL OPP. PRAHLADNAGAR GARDEN, SATELLITE, AHMEDABAD 380 015 VS. INCOME TAX OFFICER WARD 1(3), AHMEDABAD. ! PAN/GIR NO. : AACCC 5955 D ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI SUNIL TALATI, A.R. #'%$ / RESPONDENT BY : SHRI RAJDEEP SINGH, SR. D.R & '(%)* / DATE OF HEARING 02/11/2017 +,-.%)* / DATE OF PRONOUNCEMENT 16/11/2017 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMEDABAD, D ATED 20/03/2015 FOR THE ASSESSMENT YEAR (AY) 2011-12, ON THE FOLLOWING GROUNDS: ITA NO.1874/AHD /2015 CAT COSMETICS AND HEALTHCARE PVT. LTD. VS. ITO ASST.YEAR 2011-12 - 2 - I. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION S MADE BY THE LD. A.O AND PASSED AN IMPUGNED ORDER WITHOUT APPREC IATING THE FACTS AND DETAILS AVAILABLE ON RECORD. THE LD. CIT( A) HAS ERRED IN REJECTING THE SHORT ADJOURNMENT APPLICATION FILE D BY THE APPELLANT WITHOUT ANY REASON/JUSTIFICATION AND WITH OUT GRATING A SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELL ANT. HENCE THE ORDER PASSED BY LD. CIT(A) BEING UNJUSTIFIABLE AND UNLAWFUL AND THUS SAME BE QUASHED IN THE INTEREST OF JUSTICE. II. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CON FIRMING THE ADDITION OF RS.37,90,000/- U/S.40(A)(IA) OF THE ACT . YOUR APPELLANT WOULD LIKE TO SUBMIT THAT OUT OF RS.37,90 ,000/-, INTEREST AMOUNTING TO RS.36,00,000/- WAS PAID TO M/S SHARP I NDUSTRIES LTD, AND THE RECIPIENT HAS OFFERED THIS INTEREST IN COME IN ITS RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERA TION AND IN VIEW OF NEW PROVISO 2 INSERTED TO SECTION 40(A)(IA) OF THE ACT, THE DISALLOWANCE OF RS.36,00,000/- U/S 40(A)(IA) CONFIR MED BY LD. CIT(A) IS COMPLETELY INCORRECT AND UNLAWFUL AND THU S THE SAME BE DELETED. II.A THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITION OF RS.1,90,000/- BEING PROF ESSIONAL FEES OUT OF ABOVE RS.37,90,000/-, U/S.40(A)(IA) OF THE A CT. IT IS SUBMITTED THAT PAYMENT OF PROFESSIONAL FEES MADE TO VARIOUS PERSONS WERE BELOW THE THRESHOLD LIMIT SPECIFIED U/ S.194J AND IT WAS UNDER NO OBLIGATION TO DEDUCT THE TAX FROM PAYM ENT OF PROFESSIONAL FEES IN VIEW OF PROVISION OF CHAPTER X VII-B OF THE INCOME TAX ACT. THEREFORE THE IMPUGNED DISALLOWANCE CONFIRMED BY LD. CIT(A) OF RS,1,90,000/- U/S.40(A)(IA) KINDLY BE DELETED. III. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONF IRMING THE ADDITION OF RS.1,00,000/- OUT OF TOTAL ADMINISTRATI VE EXPENSES INCURRED DURING THE YEAR. IT IS SUBMITTED THAT BEIN G PRIVATE LIMITED COMPANY, THE ACCOUNTS OF APPELLANT ARE SUBJ ECT TO STATUTORY AUDIT UNDER COMPANIES ACT, 1956 AS WELL A S TAX AUDIT U/S.44AB OF THE INCOME-TAX ACT AND THEREFORE IT IS PRAYED THAT ADHOC ADDITION CONFIRMED BY LD. CIT(A) OF RS.1,00,0 00/- KINDLY BE DELETED. ITA NO.1874/AHD /2015 CAT COSMETICS AND HEALTHCARE PVT. LTD. VS. ITO ASST.YEAR 2011-12 - 3 - IV. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONF IRMING THE DISALLOWANCE OF LOSS INCURRED ON SALE OF GOODS AMOU NTING TO RS.11,30,884/-. IT IS SUBMITTED THAT THE LOSS INCUR RED OF RS.11,30,884/- ON SALE OF GOODS WAS ON ACCOUNT OF H EAVY PRICE FLUCTUATION IN THE MARKET DURING THE YEAR, WHICH WA S BEYOND THE CONTROL OF THE APPELLANT, IT IS THEREFORE SUBMITTED THAT THE LOSS CLAIMED OF RS. 11,30,884/- BE ALLOWED NOW. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE RETURN OF INCOME WAS FILED ON 09.03.2012, DECLA RING TOTAL LOSS OF RS.9,39,350/-. THE RETURN OF INCOME WAS PROCESSED U NDER SECTION 143(1) OF INCOME TAX ACT ON 05.04.2012. NOTICE U/S.143(2) WAS ISSUED ON 05.06.2013 AND NOTICES U/S.142(1) OF THE INCOME TAX ACT WERE ISSUED SEVERAL TIME, BUT SAME WERE RETURN BACK AS UNSERVED WITH REMARK LEFT OR NON-ATTENDED. FURTHER, NOTICES U/S.142(1) WERE ISSU ED FOUR TIMES AND SAME WERE DULY ATTENDED VIDE SUBMISSIONS DATED 17.1 2.2013, 22.01.2014, 14.02.2014 AND 26.02.2014. THE ASSESSMENT HAS BEEN COMPLETED U/S.144 OF THE ACT, DETERMINING THE TOTAL INCOME OF RS.50,2 0,884/- AND LD. ASSESSING OFFICER DETERMINED THE TOTAL INCOME AS FO LLOWS: SR. NO. PARTICULARS RS. 1. DISALLOWANCE U/S.40(A)(IA) 37,90,000/- 2. ADDITION ON ACCOUNT OF ADMINISTRATIVE EXPENSES 1,00,000/- 3. DISALLOWANCE OF LOSS ON SALE OF GOODS 11,30,884/- 3. THEREAFTER, APPEAL WAS FILED BEFORE THE LD.CIT(A ) BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. ITA NO.1874/AHD /2015 CAT COSMETICS AND HEALTHCARE PVT. LTD. VS. ITO ASST.YEAR 2011-12 - 4 - 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. IT IS FACT THAT AO PASSED AN ORDER U/S.144 OF I.T. ACT BEFORE THE LD. CIT(A) WHO REJECTED THE APPLICATION FOR ADJOURNMENT FILED BY THE APPELLANT WITHOUT ASSIGNING ANY REASON OR JUSTIFICATION. 5. IN THE INTEREST OF THE JUSTICE, WE SET ASIDE THE ORDER OF THE CIT(A) AND SEND IT BACK TO THE FILE OF CIT(A) WITH THE DIR ECTION TO DECIDE MATTER AFRESH AFTER GIVING AN OPPORTUNITY OF BEING HEARD T O THE ASSESSEE AND ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE THE LD.C IT(A) AS AND WHEN CALLED BY HIM. THEREFORE, APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 16/11/2017 SD/- SD/- EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YS[KK LNL; U;KF;D LNL; YS[KK LNL; U ;KF;D LNL; YS[KK LNL; U ;KF;D LNL; YS[KK LNL; U ;KF;D LNL; ( MANISH BORAD ) (MAHAVIR PRASA D) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 16/11/2017 PRITI YADAV, SR.PS ITA NO.1874/AHD /2015 CAT COSMETICS AND HEALTHCARE PVT. LTD. VS. ITO ASST.YEAR 2011-12 - 5 - !'#$ %$' COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-6, AHMEDABAD. 5. 678 )'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 89:( GUARD FILE. & ' / BY ORDER, #6) ) //TRUE COPY// (/' )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 03/11/2017 (DICTATION-PAD 4 PA GES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14/11/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER