M/s Home Fabrics , Bangalore V. Assistant Commissioner of Income TAx Circle-6(3)(1), Bangalore

ITA 1943/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7670 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 28-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: B SUDHEENDRA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 10AA; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 1942 AND 1943 / BANG/201 7 ASSESSMENT YEA RS : 20 13 - 14 AND 20 14 - 15 M/S. HOME FABRICS,, NO.54, CQAL LAYOUT, SAHAKARA NAGAR, BENGALURU 560 092. PAN : AADFH 8112 M VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-6(3)(1), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI . B. SUDHEENDRA, ADVOCATE REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT DATE OF HEARING : 24 . 0 7 .201 8 DATE OF PRONOUNCEMENT : 27 . 0 7 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) ON FOLLOWING GROUNDS. FOR THE SAKE OF REFERENCE, WE EXTRACT THE GROUNDS RAISED IN THESE APPEALS AS UNDER: GROUNDS RAISED IN ITA NO.1942/BANG/2017 1. THE ORDER PASSED BY THE LAO AND THE LEARNED CIT(A) IS BAD IN LAW, TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2. THE LAO ERRED IN DISALLOWING THE RELIEF CLAIMED BY THE APPELLANT UNDER SECTION 10AA OF THE ACT TO WHICH IT WAS RIGHTFULLY ELIGIBLE. THE HON. CIT(A) ERRED IN CONFIRMING THE SAID ORDER OF THE LAO. ITA NOS. 1942 AND 1943/BANG/2017 PAGE 2 OF 4 3. THE LAO ERRED IN NOT PROVIDING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO MAKE ITS SUBMISSION IN RESPECT OF ITS CLAIM OF RELIEF UNDER SECTION 10AA. THE HON. CIT(A) ERRED IN CONFIRMING THE SAID ORDER OF THE LAO. 4. THE LAO ERRED IN NOT CONSIDERING THAT THE APPELLANT COULD NOT MAKE ITS SUBMISSION IN TIME IN RESPECT OF ITS CLAIM OF RELIEF UNDER SECTION 10AA OF THE ACT SINCE ITS AUTHORIZED REPRESENTATIVE HAD MET WITH AN ACCIDENT AND WAS DISABLED FROM PROFESSIONAL DUTIES FOR A BRIEF PERIOD. THE HON. CIT(A) ERRED IN CONFIRMING THE SAID ORDER OF THE LAO. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE SUBMISSIONS MADE BY THE APPELLANT SUBSTANTIATING ITS CLAIM OF RELIEF UNDER SECTION IOAA. 6. THE LEARNED CIT(A) ERRED IN MISCONSTRUING ONE EVIDENCE FILED BY THE APPELLANT IN SUPPORT OF ITS CLAIM FOR RELIEF UNDER SECTION 10AA BEING A LETTER ACKNOWLEDGING THE COMMENCEMENT OF OPERATIONS FROM THE DEVELOPMENT COMMISSIONER OF COCHIN SEZ, AS A LETTER FROM A LOCAL GOVERNMENT ENTITY, NAMELY, KIADB. 7. THE LEARNED CIT(A) ERRED IN ACTING IN UNDUE HASTE, BY PASSING THE ORDER ON 14 JULY, 2017 WITHOUT GIVING SUFFICIENT OPPORTUNITY FOR THE APPELLANT TO OFFER EXPLANATIONS AND PRESENT ITS CASE BEFORE HER. 8. WITHOUT PREJUDICE TO THE ABOVE, THE LAO ERRED IN COMPUTING INTEREST UNDER SECTION 234B OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL OR PRODUCE ANY ADDITIONAL EVIDENCES, AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL SO AS TO ENABLE TO DECIDE THIS APPEAL ACCORDING TO LAW. GROUNDS RAISED IN ITA NO.1943/BANG/2017 1. THE ORDER PASSED BY THE LAO AND THE LEARNED CIT(A) IS BAD IN LAW, TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2. THE LAO ERRED IN BRINGING TO TAX A SUM OF RS. 27,48,179 AS INCOME BEING BALANCE IN THE ACCOUNTS OF SUNDRY CREDITORS DESPITE THE SAME REMAINING AN OUTSTANDING LIABILITY FOR THE APPELLANT. 3. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE LAO AND FURTHER ERRED, WITHOUT PROVIDING AN OPPORTUNITY TO THE APPELLANT, IN ENHANCING SUCH AMOUNT TO RS. 29,60,535, AS INCOME BEING BALANCE IN THE ACCOUNTS OF SUNDRY CREDITORS DESPITE THE SAME REMAINING AN OUTSTANDING LIABILITY FOR THE APPELLANT. 4. THE LEARNED CIT(A) ERRED IN NOT PROVIDING THE REASONS IN WRITING FOR NOT CONSIDERING THE OTHER GROUNDS OF APPEAL FILED BEFORE THE LEARNED CIT(A), IN THE ORDER. 5. THE LAO ERRED IN NOT PROVIDING SUFFICIENT OPPORTUNITY AND TIME TO PROVIDE CONFIRMATION FOR THE BALANCE, DESPITE PLEAS FROM THE APPELLANT. ITA NOS. 1942 AND 1943/BANG/2017 PAGE 3 OF 4 6. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE SUBMISSION MADE BY THE APPELLANT ON 14 JULY, 2017. 7. THE LEARNED CIT(A) ERRED IN ACTING IN UNDUE HASTE, BY PASSING THE ORDER ON 14 JULY, 2017 WITHOUT GIVING AN OPPORTUNITY TO THE APPELLANT TO BE HEARD. 8. WITHOUT PREJUDICE TO THE ABOVE, THE LAO AND CIT(A) ERRED IN CONSIDERING OUTSTANDING CREDITORS BALANCE AS INCOME WHEN THE SAME DOES NOT CONSTITUTE INCOME IN THE FACTS OF THE APPELLANT AND IN LIGHT OF THE PROVISIONS OF THE ACT. 9. WITHOUT PREJUDICE TO THE ABOVE, THE LAO ERRED IN COMPUTATION OF ADDITIONAL TAX LIABILITY OF THE APPELLANT IN THE ORDER DATED 16 NOVEMBER, 2016. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL OR PRODUCE ANY ADDITIONAL EVIDENCES, AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL SO AS TO ENABLE TO DECIDE THIS APPEAL ACCORDING TO LAW. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDERS OF THE CIT(A) PERTAINING TO BOTH THE ASSESSMENT YEARS I.E., 2013-14 AND 2014-15 WITH THE SUBMISSION THAT CIT(A) DID NOT CONSIDER THE EVIDENCE FILED BEFORE HIM AND HE CONFIRMED THE ASSESSMENT ORDER. THEREFORE, THE MATTER SHOULD BE RESTORED TO THE CIT(A) WITH THE DIRECTION TO ADJUDICATE THE ISSUES RAISED BEFORE HIM IN THE LIGHT OF EVIDENCES FILED BEFORE HIM. THE LEARNED DR ON THE OTHER HAND HAS PLACED RELIANCE UPON THE ORDER OF THE CIT(A). 3. HAVING CAREFULLY EXAMINED THE ORDERS OF AUTHORITIES BELOW IN BOTH THE APPEALS, WE FIND THAT BEFORE THE AO, ASSESSEE COULD NOT FILE THE RELEVANT EVIDENCES BUT BEFORE THE CIT(A), ASSESSEE HAS FILED THE RELEVANT EVIDENCE IN SUPPORT OF HIS CLAIM BUT THE EVIDENCES FILED BY THE ASSESSEE WERE NOT ADMITTED BY THE CIT(A) ON THE GROUND THAT IT WAS NOT AVAILABLE BEFORE THE AO AND THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ASSESSMENT ORDERS. SINCE THE ASSESSEE HAS FILED THE ADDITIONAL EVIDENCE BEFORE THE CIT(A), THE CIT(A) SHOULD HAVE CONFRONTED THE SAME TO THE AO AND AFTER OBTAINING HIS COMMENTS, IT SHOULD HAVE BEEN EXAMINED BY THE CIT(A) WHILE ADJUDICATING THE ISSUE BUT CIT(A) DID NOT DO SO. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER BE SENT BACK TO THE CIT(A) TO READJUDICATE THE ISSUE IN THE LIGHT OF EVIDENCES ITA NOS. 1942 AND 1943/BANG/2017 PAGE 4 OF 4 FILED BEFORE HIM AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE IN TERMS INDICATED ABOVE. 4. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2018. SD/- SD/- BANGALORE. DATED: 27 TH JULY, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. DR 5. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER