LOOMS INDIA, MUMBAI V. ITO WD 18(2)(2), MUMBAI

ITA 2301/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2703 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 22-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: M SUBRAMANIUM
• Keywords: Depreciation; Opportunity of being heard
• Section: 40A(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 2301/MUM/2011 (ASSESSMENT YEAR 2003-04) M/S LOOMS INDIA, 126, MAHTURADAS MILL COMP, N.M.JOSHI MARG, LOWER PAREL, MUMBAI 400 013. PAN:AABFL 0259P ...... APPELLANT VS. THE ITO,WARD 18(2)(2), MUMBAI. .... RESPONDENT APPELLANT BY : SHRI M. SUBRAMANIUM RESPONDENT BY : SHRI A.RAMACHAN DRAN DATE OF HEARING : 21/09/2016 DATE OF PRONOUNCEMENT : 23/09/2016 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAI NING TO ASSESSMENT YEAR 2003-04 IS DIRECTED AGAINST AN ORD ER PASSED BY CIT(A)- 29 MUMBAI DATED 19/01/2010 WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27/03/2006. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL, WHICH ARE AS FOLLOWS:- 2 ITA NO. 2301/MUM/2011 (ASSESSMENT YEAR 2003-04) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N PASSING AN APPELLATE ORDER AND THAT TOO WITHOUT GIVING FULL AN D PROPER OPPORTUNITY OF BEING HEARD IN THE MATTER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N HOLDING THAT NONE HAD ATTENDED FROM APPELLANT SIDE WITHOUT APPRE CIATING THE FACTS THAT HEARING WAS ATTENDED ON VARIOUS DATE AS PER THE NOTICES ISSUED BY THE CIT(A) AND WRITTEN SUBMISSION WERE AL SO FILED BY THE APPELLANT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) IS BAD IN LAW AS THE APPELLATE ORDER WAS PASSED ON 19- 01- 2010 THAT IS PRIOR TO THE DATE OF HEARING WHICH WAS FIXED ON 22- 01-2010 AS PER THE LETTER OF ADJOURNMENT DATED 04-01-2010 FILED ON 05-01-2010. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N PASSING AN APPELLATE ORDER WITHOUT CONSIDERING FULLY AND PROPE RLY THE SUBMISSIONS MADE DURING THE COURSE OF HEARING PROCE EDINGS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N NOT ACCEPTING THE BOOK RESULTS AND CONFIRMING ADDITION OF AN AMOU NT OF RS.25, 00,0001- AS SUPPRESSED INCOME WITHOUT APPRECIATING THAT THERE WAS NO DIFFERENCE IN THE AMOUNT OF CLOSING STOCK 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS.13,30,000/- U/S 40A(3) OF THE I. T. ACT WITHOUT APPRECIATING THE FACTS THAT THE PURC HASES WERE DIRECTLY CONNECTED WITH EXPORT BUSINESS. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL) ERRED IN CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS.12,466/- OUT OF MOTOR CAR EXPENSES CLAIMED OF RS.62,333/-. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N CONFIRMING THE DISALLOWANCE OF RS. 1,241/- OUT OF DEPRECIATION ON MOTOR CAR CLAIMED OF RS.6,208/- 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS.26,042/- OUT OF TOTAL TELEPHONE & TELEX EXPENSES CLAIMED OF RS 1,30,213/- 3 ITA NO. 2301/MUM/2011 (ASSESSMENT YEAR 2003-04) 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS.15,94,232/- BEI NG INTEREST EXPENDITURE CLAIMED WITHOUT APPRECIATING THAT THE I NTEREST FREE FUNDS RECEIVED WERE MUCH MORE THAN THE INTEREST FRE E FUNDS GIVEN THAT TOO IS TO THE SAME PARTIES OR THEIR SISTER CON CERN WHICH COULD HAVE BEEN ROUTED THROUGH PARTNERS CAPITAL ACCOUNTS. 11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N NOT ALLOWING INTEREST INCOME ON FDR AS BUSINESS PROFIT WHICH IS ELIGIBLE FOR DEDUCTION U/S. 80HHC OF THE I.T. ACT. 12 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL) OUGHT TO HAVE AT LEAST GIVEN THE BENEFIT OF NETTING OFF BY SETTING OFF INTEREST EXPENSES AGAINST THE INTEREST INCOME. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT THE ORDER OF THE CIT(A) SUFFERS FROM A PERTINENT INFIRMITY AS IT HAS BEEN PASSED WITHOUT AFFORDING THE ASSESSE E FULL AND PROPER OPPORTUNITY OF BEING HEARD. THE LD. REPRESENTATIV E FOR THE ASSESSEE POINTED OUT THAT THE CIT(A) HAS PASSED AN EX-PARTE ORDER INSPITE OF THE FACT THAT ASSESSEE DID APPEAR ON VARIOUS DATES AN D INDEED THE MATTER WAS FINALLY ADJOURNED FOR 22/01/2010, WHEREAS THE C IT(A) HAS PASSED THE ORDER ON AN ANTERIOR DATE I.E. 19/01/2010 ITSE LF. IN ANY CASE, IT IS POINTED OUT THAT DUE TO THE AFORESAID REASON THE SA Y OF THE ASSESSEE COULD NOT BE MADE AVAILABLE TO THE CIT(A), WHICH HA S RESULTED IN A PREJUDICE TO THE ASSESSEE..THE LD. REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT THE APPELLANT WOULD BE SATISFIED, IF THE MATTER IS REMANDED BACK TO THE FILE OF THE CIT(A) FOR AN ADJU DICATION AFRESH ON MERITS OF THE VARIOUS ISSUES RAISED, AFTER ALLOWING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER LAW. 4. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT RAI SED ANY SERIOUS OBJECTION WITH RESPECT TO THE AFORESAID PRELIMINARY PLEA OF THE ASSESSEE. 4 ITA NO. 2301/MUM/2011 (ASSESSMENT YEAR 2003-04) 5. CONSIDERING THE FACT POSITION AND THE CIRCUMSTAN CES EXPLAINED BEFORE US, WE DEEM IT FIT AND PROPER TO SET ASIDE T HE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR ADJUDIC ATION AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING THE ASSESSEE A R EASONABLE OPPORTUNITY OF BEING HEARD. IT IS CLARIFIED THAT O UR DECISION TO REMAND THE MATTER BACK TO THE FILE OF THE CIT(A) SHALL NOT BE CONSTRUED AS ANY REFLECTION ON THE MERITS OF THE VARIOUS ISSUES RAIS ED BY THE ASSESSEE, WHICH SHALL BE DEALT WITH BY THE CIT(A) AS PER LAW. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 23/09/201 6 SD/- SD/- (RAMLAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 23/09/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI