CAFE LEOPOLD & STORES, MUMBAI V. ITO 12(2)(3), MUMBAI

ITA 2450/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1259 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 16-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: SUBHASH SHETTY

Judgement Text

ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH, MUMBAI BEFORE, SHRI D.K. AGARWAL, (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 2450 AND 2451/MUM/2009 ASSESSMENT YEAR 2004-05 AND 2005-06 DATE OF HEARING : 2.6.2010 M/S. CAF LEOPOLD & STORES ...... APPEL LANT 39 41, S.B.S. ROAD, COLABA MUMBAI 400 001 AAAFC5485F VS. INCOME TAX OFFICER, WARD 12(2)(3) .. R ESPONDENT AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 APPELLANT BY : SHRI SUBHASH SHETTY RESPONDENT BY : SHRI O.P. SHARMA O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CALLED I NTO QUESTION CORRECTNESS OF LD. CIT(A)S EX-PARTE ORDER DATED 29 TH JANUARY 2009, FOR ASSESSMENT YEAR 2004-05. ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 2 OF 7 2. FIRST, WE TAKE UP APPEAL IN ITA NO.2450/MUM./200 9, FOR ASSESSMENT YEAR 2004-05, WHEREIN, GRIEVANCES RAISED BY THE ASSESSEE, ARE AS FOLLOWS:- 1. THE LD. CIT(A) COMMITTED A GROSS ERROR OF LAW A ND FACT IN PASSING AN EX-PARTE APPELLATE ORDER AND THEREBY CONFIRMING CERTAIN DISALLOWANCES MADE BY THE ASSESS ING OFFICER. 2. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCES OF RS.4,342 AND RS.3M347 MADE BY THE ASSESSING OFFI CER ON THE ALLEGED GROUND OF PAYMENT OF ESIC BEYOND THE ST IPULATED TIME. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE IMP UGNED PAYMENTS WERE MADE WITHIN THE DUE DATE AS PRESCRIBE D BY ESIC RULES WHICH IS 22 ND OF THE FOLLOWING MONTHS. 4. THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING THE ASSESSING OFFICER DISALLOWANCE UNDER SECTION 43B(C) OF RS.1,03,335/- BEING THE BONUS PAYMENT MADE BEFORE T HE DUE DATE FOR FILING OF THE RETURN OF INCOME. 5. THE LD. CIT(A) COMMITTED A GROSS ERROR OF LAW AN D FACT IN CONFIRMING THE DISALLOWANCE OF RS.1,99,240/- BEI NG THE RENT PAID TO THE LAND LADY EVEN THOUGH ALL THE PART ICULARS ABOUT THE SAID PAYMENTS WERE FURNISHED BEFORE THE ASSESSING OFFICER. 3. BRIEFLY STATED THE MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS RUNNING A RESTAURANT AND BAR AT COLABA. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER REQUISITIONED DE TAILS FROM TIME TO TIME WHICH WERE DULY COMPLIED WITH. WHILE FINALISIN G THE ASSESSMENT, ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 3 OF 7 THE ASSESSING OFFICER NOTED THAT THE AMOUNT OF RS.1 ,03,335/- WAS SHOWN AS OUTSTANDING ON ACCOUNT OF BONUS TO STAFF, BUT THE DATE OF SUCH PAYMENT HAS NOT BEEN SET OUT IN THE AUDITED REPORT. HE THUS INFERRED THAT BONUS WAS NOT PAID BEFORE THE DUE DATE OF FILI NG OF THE RETURN OF INCOME AND, THEREFORE, THE SAME CANNOT BE ALLOWED A S DEDUCTION. THE ASSESSING OFFICER FURTHER NOTED THAT WHILE THE ASSE SSEE CLAIMS TO HAVE PAID RS.1,99,240 THE LAND LADY, THE ASSESSEE HAS NO T BEEN ABLE TO FURNISH THE DOCUMENTARY EVIDENCE IN SUPPORT OF THE SAME. THE ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE HAD SOUGHT MORE TIME TO PRODUCE THE DOCUMENTARY EVIDENCE BUT DO NOT GRANT T HE TIME ON THE GROUND THAT THE ASSESSMENT WAS GETTING BARRED BY LI MIT. FURTHER, THE ASSESSING OFFICER ALSO TOOK NOTE OF DELAYS IN PAYME NTS OF PROVIDENT FUND FOR JULY 2003 AND MARCH 2004 AND ALSO ESIC DUE S FOR JULY 2003 AND MARCH 2004. THESE AMOUNTS WHICH AGGREGATE RS.56 ,739 WERE ALSO DISALLOWED BY THE ASSESSING OFFICER. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE LD. CIT(A) BUT WITHOUT SUCCESS. THE LD. CIT(A) DECI DED THE MATTER EX- PARTE ON THE GROUND THAT THOUGH THE MATTER WAS ADJU DICATED ON 2 ND JANUARY 2009, NEITHER THERE WAS COMPLIANCE ON THE S AID DATE NOR ANY WRITTEN STATEMENT WAS FILED AND IT WAS, THUS, INFER RED THAT THE APPELLANT IS NOT INTERESTED IN TAKING UP THE APPEAL . AGGRIEVED BY THE STAND SO TAKEN BY THE LD. CIT(A), THE ASSESSEE IS I N FURTHER APPEAL BEFORE THE TRIBUNAL. ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 4 OF 7 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE AS ALSO THE APPLICABLE LEGAL POSITION. 6. WE HAVE NOTED THAT IN THE COURSE OF ASSESSMENT P ROCEEDINGS, THERE WAS REASONABLE COMPLIANCE TO THE REQUISITIONS BY THE ASSESSING OFFICER BUT AT NO STAGE, THE ASSESSING OFFICER SPEC IFICALLY REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE DELAYED PAYMEN T OF PROVIDENT FUND AND ESI NOT BE DISALLOWED. FOR THIS PURPOSE, T HE ASSESSEE HAD NO OCCASION TO EXPLAIN, WHETHER OR NOT, THE PAYMENT OF BONUS TO THE EMPLOYEES WAS MADE WITHIN THE DUE DATE OF FILING OF INCOME TAX RETURN. WE ALSO NOTED THAT THE ASSESSEE SOUGHT TIME FOR PRO DUCING EVIDENCE FOR RENT PAYMENT BUT THE SAME WAS DECLINED. IN APPE AL BEFORE THE LD. CIT(A), THE MATTER HAS BEEN DECIDED EX-PARTE WITHOU T GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. BEARING IN MIND THESE FACTS AND IN THE ENTIRETY OF THE CASE, WE DEE M IT FIT AND PROPER TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OF FICER FOR ADJUDICATION DENOVO AFTER GIVING REASONABLE OPPORTUNITY OF HEARI NG TO THE ASSESSEE. WE FURTHER DIRECT THE ASSESSEE TO METICULOUSLY COMP LY WITH THE REQUISITION OF THE ASSESSING OFFICER AND NOT TO RES ORT TO ANY DELAYING TACTICS AND FULLY CO-OPERATE IN EXPEDITIOUS DISPOSA L OF THE REMAND PROCEEDINGS. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 5 OF 7 8. NOW, WE TAKE UP APPEAL IN ITA NO.2451/MUM./2009, WHEREIN, GRIEVANCES RAISED BY THE ASSESSEE, ARE AS FOLLOWS:- 1. THE LD. CIT(A) COMMITTED A GROSS ERROR OF LAW A ND FACT IN PASSING ON EX-PARTE APPELLATE ORDER AND THEREBY CONFIRMING CERTAIN DISALLOWANCES MADE BY THE ASSESS ING OFFICER. 2. THE LD. CIT(A) COMMITTED A GROSS ERROR OF LAW AN D FACT IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSIN G OFFICER OF RS.1,11,538/- BEING THE ADDITIONAL LEASE RENT PAID TO BPT/MPT, DESPITE THE FACT THAT ALL THE PARTICULA RS AND DETAILS WERE FILED BEFORE THE ASSESSING OFFICER. 3. THE LD. CIT(A) ERRED IN DISALLOWING A SUM OF RS.9,562/- ON THE GROUND OF EXCESS CLAIM OF SALES T AX. 4. THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING THE ASSESSING OFFICER DISALLOWANCE OF RS.22,905/- OUT O F REPAIRS AND MAINTENANCE EXPENSES ON AN AD-HOC BASIS. 9. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ISSU ES ARISING OUT OF THE ABOVE GROUNDS ARE SOMEWHAT SIMILAR TO THE ISSUES RA ISED IN THE APPEAL FOR ASSESSMENT YEAR 2004-05, WHEREIN, VIDE PARA-6 A BOVE, WE HAVE RESTORED THE MATTER BACK TO THE FILE OF ASSESSING O FFICER FOR ADJUDICATION DENOVO. KEEPING IN VIEW OUR AFORESAID DIRECTIONS VIDE PARA-6 ABOVE, SIMILAR DIRECTIONS ARE ISSUED ON THE ABOVE GROUNDS ALSO. WE ORDER ACCORDINGLY. ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 6 OF 7 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED I N THE OPEN COURT TODAY ON THIS 25 TH DAY OF JUNE 2010. SD/XX SD/XX (D.K. AGARWAL) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 25 TH DAY OF JUNE 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, C BENCH, ITAT, MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHOWDHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, MUMBAI ITA NO. 2450 & 2451/MUM/2009 ASSESSMENT YEARS : 2004-05, 2005-06 PAGE 7 OF 7 DATE INITIAL 1. DRAFT DICTATED ON 18.6.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 21.6.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 21.6.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 21.6.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 21.6.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 25.6.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 25.6.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER