FINE JEWELLERY MANUFACTURING LTD, MUMBAI V. INCOME TAX OFFICER 9(3)(2), MUMBAI

ITA 247/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6934 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSEN
• Assessee Lawyers: H S RAHEJA
• Keywords: Bogus purchase; Application of stay
• Section: 143(3); 10AA; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.247/M/2018 ASSESSMENT YEAR: 2010-11 & SA NO.103/M/2018 (ARISING OUT OF ITA NO.247/M/2018) ASSESSMENT YEAR: 2010-11 M/S. FINE JEWELLERY MANUFACTURING LTD., PLOT NO.GJ-12, SEEPZ SEX ++, COMPLEX, MIDC, ANDHERI (EAST), MUMBAI 400 096 PAN: AAACF5736D VS. INCOME TAX OFFICER- 9(3)(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI H.S. RAHEJA, A.R. REVENUE BY : SHRI M.C. OMININGSEN, D.R. DATE OF HEARING : 01.06.2018 DATE OF PRONOUNCEMENT : 20.06.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 25.10.2017 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE VARIOUS GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER: THE COMMISSIONER OF INCOME TAX (APPEALS)-16, MUMBA I ERRED IN: 1. NOT HOLDING THAT THE APPELLANT OUGHT TO BE ENTITLED TO A DEDUCTION U/S 10AA AS IT HAD FILED A FORM 56F BEFORE THE CIT DURI NG THE PROCEEDINGS U/S 263 OF THE ACT AS WELL AS WITH THE ASSESSING OFFICE R DURING THE PROCEEDINGS THEREAFTER. SA NO.103/M/2018 (ARISING OUT OF ITA NO.247/M/2018) M/S. FINE JEWELLERY MANUFACTURING LTD. 2 2. IN NOT ADJUDICATING ON THE ADDITIONS MADE BY MERELY HOLDING THAT AS THE APPELLANT HAD NOT CHALLENGED THE ORDER U/S 2 63 NO APPEAL WOULD LIE AGAINST THE ORDER GIVING EFFECT TO THE DIRECTIONS O F THE CIT U/S 263. HE ERRED IN NOT APPRECIATING THAT THE CIT HAD SET A SIDE THE ADDITION TO BE DONE AFRESH ON VARIOUS ISSUES. HE ALSO ERRED IN NOT APPRECIATING THAT THE APPELLANT HAD NOT CHALLENGED THE JURISDICTION U/S 2 63 BEFORE HIM BUT ONLY THE ADDITIONS MADE. 3. IN NOT ADJUDICATING THAT THERE WAS NO ADEQUATE REAS ON TO CONSIDER A PURCHASE OF RS. 4,050 AS A BOGUS PURCHASE AND IN RE OPENING A COMPLETED ASSESSMENT TOWARDS THE SAME. 4. IN NOT ADJUDICATING THAT NO DISALLOWANCE WAS NEEDED U/S 40A(I) FOR PAYMENTS MADE TO THANGAM JEWELS LLC AS THE SAME WAS NOT TAXABLE IN INDIA. WITHOUT PREJUDICE, IN NOT ADJUDICATING THAT EVEN IF A SUM IS DISALLOWED U/S 40A(I) THE SAME WILL HAVE TO BE CONS IDERED WHILE GRANTING DEDUCTION U/S 10AA. 3. IN GROUND NO 2 THE ASSESSEE HAS RAISED AN ISSUE THAT THE LD CIT(A) HAS DISMISSED THE APPEAL BY NOT DECIDING THE ISSUES/ADDITIONS REASONING THAT THE ASSESSEE HAS NO T CHALLENGED THE ORDER PASSED UNDER SECTION 263 OF TH E ACT AND THEREFORE NO APPEAL WOULD LIE AGAINST THE ORDER PAS SED U/S 143(3) R.W.S. 263 OF THE ACT GIVING EFFECT TO THE DIR ECTIONS OF PR CIT IN THE ORDER PASSED UNDER SECTION 263 OF THE ACT AND THE LD . CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE LD. PR CIT HAS SET ASIDE THE ORDER TO BE DONE AFRESH ON VARIOUS ISSUES AS PER LAW. THUS IT IS OPEN ENDED SET ASIDE TO DECIDE THE ISSUE AS PER LAW AND NO SPECIFIC DIRECTION WAS GIVEN BY THE PR. CIT. 4. AFTER HARING BOTH THE PARTIES AND CAREFULLY PERU SING THE MATERIAL PLACED BEFORE US INCLUDING THE ORDER PASSE D BY THE PR. CIT UNDER SECTION 263 OF THE ACT. WE OBSERVE THAT THE LD. PR. CIT HAS SET ASIDE THE ISSUES TO THE FILE OF THE AO WITH THE DIRECTION THAT THE SAME SHOULD BE DECIDED AS PER LA W AND AS PER FACTS ON RECORD AFTER AFFORDING A REASONABLE OP PORTUNITY OF SA NO.103/M/2018 (ARISING OUT OF ITA NO.247/M/2018) M/S. FINE JEWELLERY MANUFACTURING LTD. 3 BEING HEARD TO THE ASSESSEE. THUS, THE PR. CIT HAS N OT GIVEN ANY SPECIFIC DIRECTION BUT HAS LEFT THE ASSESSMENT TO BE MADE BY THE AO ACCORDING TO THE LAW. THEREFORE, WE ARE NO T IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE FIRST AP PELLATE AUTHORITY THAT APPEAL FILED BY THE ASSESSEE AGAINST THE QUANTUM ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 263 IS NOT APPEALABLE ON THE GROUND THAT THE ASSESS EE HAS NOT CHALLENGED THE ORDER PASSED UNDER SECTION 263 AND T HUS NO APPEAL WOULD LIE AGAINST THE ORDER GIVING EFFECT TO THE DIRECTIONS OF LD. PR. CIT UNDER SECTION 263 OF THE ACT. IN THE INSTANT CASE, THE PR. CIT HAS SET ASIDE THE ISSUES T O THE FILE OF THE AO WITHOUT GIVING ANY SPECIFIC DIRECTION OR TO PASS ANY PARTICULAR ORDER ON THE SAID ISSUES BUT HAS LEFT OP EN AT THE DISCRETION OF THE AO TO DECIDE THE MATTER AS PER LA W. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW T HAT ORDER PASSED BY LD. CIT(A) DISMISSING THE APPEAL OF THE AS SESSEE WITHOUT DECIDING THE ISSUE ON MERITS IS BAD IN LAW AND CAN NOT BE SUSTAINED. ACCORDINGLY, WE RESTORE THE MATTER BAC K TO THE FILE OF LD. CIT(A) WITH THE DIRECTION TO DECIDE THE SAME ON MERITS AFTER AFFORDING THE REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. THE GROUND IS ALLOWED. 5. SINCE THE APPEAL IS RESTORED TO THE FILE OF THE CIT(A), OTHER GROUNDS NEED NOT BE ADJUDICATED. 6. THE STAY APPLICATION WHICH WAS HEARD ALONG WITH T HIS APPEAL HAS BECOME INFRUCTUOUS AS WE HAVE RESTORED T HE APPEAL TO THE FILE OF THE LD. CIT(A). SA NO.103/M/2018 (ARISING OUT OF ITA NO.247/M/2018) M/S. FINE JEWELLERY MANUFACTURING LTD. 4 7. ACCORDINGLY, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES AND STAY APPLICATION IS DISPOS ED OFF AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 20.06.2018. SD/- SD/- (SAKTIJIT DEY ) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 20.06.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.