VIPUL N. DOSHI, MUMBAI V. ITO 24(2)(3), MUMBAI

ITA 227/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9143 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMALATHA
• Assessee Lawyers: MRS RENU KAPOOR
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Corroborative evidences
• Section: 143(3); 194C; 263

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO. 227/MUM/2017 ( / ASSESSMENT YEAR: 2008 - 09 ) SHRI VIPUL N. DOSHI, PROP. M/S. PARTH OVERSEAS, 107, SONAL INDUSTRIAL ESTATE, LINKING ROAD, MALAD (W), MUMBAI - 400 064 / VS. ITO - 24(2)(3), ROOM NO. 603, C - 13, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, 6 TH FLOOR, BANDRA, MUM BAI - 400 051 ./ ./ PAN/GIR NO. AAGPD 0820 K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MRS. RENU KAPOOR / RESPONDENT BY : MS. HEMALATHA / DATE OF HEARING : 29.08.2017 / DATE OF PRONOUNCEMENT : 12 .10.2017 / O R D E R PER SHAMIM YAHYA , A. M.: THIS IS AN A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 41 , MUMBAI (CI T(A) FOR SHORT) DATED 21.10.2016 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2008 - 09. 2. T HE GROUNDS OF APPEAL READ AS UNDER : 2 ITA NO. 227/MUM/2017 (A.Y. 2008 - 09) SHRI VIPUL N. DOSHI VS. ITO 1. THE LEARNED CIT(APPEAL) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DISALLOWING INTEREST OF RS.30,380/ - . 2. THE LEARNED C IT(APPEAL) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DISALLOWING RS.17,28,789/ - IN RESPECT OF PAYMENT MADE FOR FREIGHT, OCTROI AND EXCISE. 3. THE LEARNED CIT(APPEAL) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DISALLOWING BUSINESS PROMOTION EXP ENSES RS.5,51,621/ - . 3. AT THE OUTSET , THE LEARNED C OUNSEL OF THE ASSESSEE SUBMITTED THAT SHE WILL NOT BE PRESSING GROUND NUMBER ONE. HENCE , GROUND NUMBER ONE IS DISMISSED AS NOT PRESSED. 4. THE ASSESSING OFFICER IN THIS CASE HAS PASSED THE ASSESSMENT OR DER PURSUANT TO THE REVISION BY THE LEARNED COMM ISSIONER OF I NCOME T AX U /S. 263 OF THE I NCOME T AX A CT , 1961 (THE ACT HEREINAFTER) . ON THE IMPUGNED ISSUES , THE ASSESSING OFFICER H AS PASSED THE FOLLOWING ORDER : ON THE ISSUE OF NON DEDUCTION OF TD5 ON FREIG HT, OCTROI AND EXCISE IS CONCERNED THE ASSESSEE SUBMITTED THAT THE PAYMENTS ARE NOT COVERED U/S 1 94C AND SAME IS OUT OF PURVIEW OF YDS. IT IS ALSO FILED THAT AL L FREIGHTS ARE NOT PAID FOR EXPORT TO THE AGENTS OF FOREIGN SHIPPING LINERS/AIRLINERS. THE SUBMIS SION OF THE ASSESSEE IN THIS REGARD IS NOT ACCEPTED AS FOREIGN PARTIES HAVE NOT APPOINTED FOLLOWING PERSONS AS THEIR AGENTS. SR. NO. NAME OF THE PARTIES ADDRESS 1 PAL INDIA SHIPPING AGENCY 1, MORES COBRAL ESTATE, SAHAR VILLAGE, ANDHERI (E ), 2 BIOC ON LTD. 20 TH ELECTRONIC CITY, BANGALORE - 5600100 3 EDS CARGO PVT. LTD. 9, ABBAS MANJIL, SAHAR ROAD, CHAKALA JUNCTION, ANDHERI (E), MUMBAI - 400099 4 MORA SHIPPING AGENCY 306, SAID SADAN, 3 RD FLOOR, MODI STREET, MUMBAI 5 ORCHID SHIPPING P. LTD. 2 03, GOKUI ARCADE, SUBHASH ROAD, MUMBAI. 3 ITA NO. 227/MUM/2017 (A.Y. 2008 - 09) SHRI VIPUL N. DOSHI VS. ITO 6 PENTA FREIGHT P . LTD. 12, SAHAR CARGO, V.M. SHAH MARG, 3.B. NAGAR, ANDHERI (L), MUMBAI. 7 VEE VIN SHIPPING 319, 21, NARSINATH STREET, 4/15, MODY CHAMBER, MASJID, MUMBAI 400009 ABOVE STATED PARTIES ARE WORKING AS PROVIDERS OF FREIGHT SERVICES, THI S PURPOSE WHETHER THEY ENGAGE THE IR OWN SHIPS OR HIRE OUTSIDE HIPS IS NOT RELEVANT. IN VIEW OF THE ABOVE, THERE IS VIOLATION OF SECTION 194C OF THE I.T. ACT, AND HENCE DISALLOWED OF FREIGHT, OCTROI AND EXCIS E CHARGES PAID TO THE ABOVE PARTIES WITHOUT DEDUCTION OF TAX OF RS.17,28,789/ - . 8. AS REGARD TO THE BUSINESS PROMOTION EXPENSES OF RS.5,51,6217 - , THE ASSESSEE HAS NOT SUBMITTED ANY SUPPORTING EVIDENCE / PROOF WHICH WILL ASCERTAIN THE GENUINENESS OF T HE CLAIM OF THE EXPENSES. THEREFORE, THE CLAIM OF BUSINESS PROMOTION EXPENSES TO THE TUNE OF RS.5,51,621/ - IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. UPON THE ASSESSEE S APPEAL , THE LEARNED CIT(A) NOTED THAT THE ASSESSEE HAS SUBMITTE D ADDITIONAL EVIDENCES. SHE NOTED THAT THESE ADDITIONAL EVIDENCES WERE SENT TO THE ASSESSING OFFICER AND THE REMAND REPORT WAS OBTAINED. HOWEVER , THE APPELLATE ORDER OF THE LEARNED CIT ( A ) DID NOT MENTION ED ANYTHING ABOUT THE ADDITIONAL EVIDENCE OR THE REMA ND REPORT. 6. IN THE APP ELLATE ORDER , THE L D . CIT(A) HELD THAT THE A SSESSING O FFICER HAS FOLLOWED THE ORDER OF THE LD. CIT(A) UNDER SECTION 263 OF THE I NCOME T AX A CT. SHE FOUND THAT THE ASSESSING OFFICER HAD NO DISCRETION IN THIS REGARD. SHE HELD AS UNDER : 8. AGGRIEVED BY THE ABOVE ADDITIONS, THE APPELLANT HAS PREFERRED AN APPEAL WITH THIS OFFICE. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE A.R. OF THE ASSESSEE FILED ADDITIONAL EVIDENCES ALONG WITH THE PAPER BOOK WHICH WAS NOT SUBMITTED DURING 4 ITA NO. 227/MUM/2017 (A.Y. 2008 - 09) SHRI VIPUL N. DOSHI VS. ITO THE COU RSE OF ASSESSMENT PROCEEDINGS. ACCORDINGLY, REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER VIDE LETTER DATED 12.11.2014 BY MY PREDECESSOR. THE ASSESSING OFFICER SUBMITTED THE REMAND REPORT VIDE LETTER DATED 17.02.2016 THROUGH RANGE HEAD. 9. I HAV E CONSIDERED THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO PERUSED THE FINDINGS OF THE A.O. IN THE ASSESSMENT ORDER. IN THE ORDER U/S. 263, THE LD. CIT HAD GIVEN FINDINGS ON ALL THE ISSUES. AT THE END OF THE ORDER U/S. 263, THE A.O. WAS DIRECTED TO GIVE EF FECT TO THE FINDINGS OF THE ORDER. THEREFORE, I AM OF THE OPINION THAT NOTHING WAS LEFT FOR ADJUDICATION TO THE A.O. THE ASSESSING OFFICER IN HIS ORDER U/S. 143(3) R.W.S. 263 HAS CORRECTLY FOLLOWED THE FINDINGS GIVEN BY THE LD. LD. CIT(A) IN ORDER U/S. 263 ON ALL THE ISSUES. THEREFORE, ALL THE ADDITIONS/DISALLOWANCES MADE BY THE AO IN ORDER U/S. 143(3) R.W.S. 263 AS PER DIRECTION OF LD. LD. CIT(A) IN ORDER U/S. 263 ARE SUSTAINED. 7. A GAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 8. I HAVE HEARD BOTH THE COUNSEL S AND PERUSED THE RECORDS. I FIND THAT IN THE ASSESSMENT ORDER , ASSESSING OFFICER HAS CLEARLY GIVEN HIS FINDINGS AND PASSED AN ORDER. THE ASSESSING OFFICER HAS NOWHERE STATED THAT HE IS SIMPLY FOLLOWING THE REVISION ORDER AND N OT EXAMINING THE ISSUE AND MAKING ANY APPLICATION OF MIND. IN SUCH SITUATION , WHEN THERE IS THE ASSESSMENT ORDER BY THE ASSESSING OFFICER , ADDITIONAL EVIDENCES FILED BY THE ASSESSEE, AND REMAND REPORT BY THE ASSESSING OFFICER , I T WAS INCUMBENT UPON THE L D . CIT ( A ) TO MAKE PROPER APPLICATION OF MIND AND G I VE A DETAIL ED ORDER ON THE FACTS AND PROVISIONS OF LAW INVOLVED. IN M Y CONSIDERED OPINION , THE ORDER BY THE LEARNE D CIT - A IS A NONSPEAKING ORDER. IT HAS BEEN HELD BY TH E HONBLE SUPREME COURT IN THE CASE OF SAHARA INDIA ( FARMS ) V S. CIT [2008] 300 ITR 403 (SC) THAT EVEN QUASI JUDICIAL ORDERS HAVE TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE. IN THE PRESENT CASE , THE ORDER BY THE LD CIT ( A ) DOES NOT SHOW ANY APPLICATION OF MIND 5 ITA NO. 227/MUM/2017 (A.Y. 2008 - 09) SHRI VIPUL N. DOSHI VS. ITO ON THE ISSUES BEFORE HER. HEN CE , I SET ASIDE THE ORDER OF LEARNED CIT - A AND REMIT THE ISSUE BACK TO THE FILE OF LEARNED CIT - A. LEARNED CIT - A IS DIRECTED TO CONSIDER THE ISSUE AFRESH AND PASS A SPEAKING ORDER AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. 9. IN THE RESUL T , THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 12.10. 20 17 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 12.10.2017 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI