The ITO, Ward-1(1), Surat V. M/s. Diablue Exports Pvt.Ltd., Surat

ITA 2568/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9418 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAVIN KUMAR
• Assessee Lawyers: SAPNESH SHETH
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2568/AHD/2011 (ASSESSMENT YEAR: 2008-09) INCOME-TAX OFFICER WARD 1(1), SURAT V/S M/S. DIABLUE EXPORTS PVT. LTD. 204, NISHIT DIAMOND COMPLEX, HAT FALIA, HARIPURA, SURAT-395301 (APPELLANT) (RESPONDENT) PAN: AACCD3578P APPELLANT BY : SHRI PRAVIN KUMAR, SR. D. R. RESPONDENT BY : SHRI SAPNESH SHETH, A.R. ( )/ ORDER DATE OF HEARING : 12 -01-201 7 DATE OF PRONOUNCEMENT : 16 -01-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE REVENUE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-9, MUMBAI DATED 29.06.2011 PERTAI NING TO A.Y. 2008-09. ITA NO. 2568 /AHD/2011 . A.Y. 2008-0 9 2 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS U NDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD, CIT(A)-9, MUMBAI HAS ERRED IN DELETING THE ADDITION OF RS.52,04,732/ - ON ACCOUNT OF OUTSTANDING FOREIGN BANK INTEREST WHICH WAS DEBITED IN P & L A/ C. WITHOUT GIVING ANY OPPORTUNITY TO EXAMINE THE ADDITIONAL EVIDENCE OR D OCUMENT OR TO CROSS EXAMINE THE WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLATE, AS REQUIRED U/S. 46A(1) OF THE I.T. ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A)-9, MUMBAI HAS ERRED IN RESTRICTED THE ADDITION ON ACCOUNT OF DISALLOWANCE OF VARIOUS EXPENSES FROM 50% TO 20% A WITHOUT APPRECIATING THE FACT THAT ALL THE EXPENSES ARE MADE IN CASH AND NO CORROBORATIVE BILL OR EVIDE NCE HAS BEEN PRODUCED BY THE ASSESSEE. FURTHER, ASSESSEE FAILED TO DISCHARGE ONU S CASH UPON HIM TO PROVE THE GENUINENESS OF THE EXPENSES AND WHETHER THE SAME HA D BEEN INCURRED FOR THE PURPOSE OF BUSINESS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A)-9, MUMBAI HAS ERRED IN DELETING THE ADDITION OF RS.13,94,652/ -, MADE U/S. 40(A)(IA) OF THE I.T. ACT, ON THE BASIS OF ADDITIONAL EVIDENCE, WITHOUT G IVING AN OPPORTUNITY TO THE A.O. OR CALLING FOR REMAND REPORT AS REQUIRED U/S. 46A(1 ) OF THE I.T. ACT. 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS AS IMPORTER, EXPORTER, TRADER IN ALL TYPES OF DIAMONDS, PRECIOUS AND SEMI PRECIOUS STONES ETC. THE ASSESSMENT WAS MADE U/S. 143(3) OF THE ACT AFTER MA KING THE FOLLOWING ADDITIONS/DISALLOWANCES:- 1. OUTSTANDING INTEREST RS. 52,0 4,732 2. SALARY RS. 5,68,875 ITA NO. 2568 /AHD/2011 . A.Y. 2008-0 9 3 3. EMPLOYEES FOOD & BEVERAGE EXP. RS. 4,03,626 4 TRAVELLING EXPENSES RS. 71,024 5 REGISTRY & POSTAGE, TELEPHONE, PRINTING & STATIONERY RS. 1,00,278 6 ASSORTMENT CHARGES RS. 3,84,346 7 U/S. 40(A )(IA) RS. 13,94,652 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) AND FILED A PAPER BOOK ALONG WITH WRITTEN SUBMISSIONS WHICH INCLUDED CERTA IN DOCUMENTS WHICH WERE NEVER SUBMITTED BEFORE THE A.O. 5. A PERUSAL OF THE ORDER OF THE FIRST APPELLATE AUTHO RITY SHOWS THAT THE LD. CIT(A) DID NOT CALL FOR ANY REMAND REPORT CONFRONTI NG THE A.O. WITH THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE DURING T HE COURSE OF THE APPELLATE PROCEEDINGS. 6. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AS SESSEE NEVER FURNISHED THESE DOCUMENTS NOR THERE IS ANY EVIDENCE TO SHOW T HAT THE ASSESSING OFFICER REFUSED TO ENTERTAIN THE EVIDENCES. 7. IN OUR CONSIDERED OPINION, THE ORDER OF THE FIRST A PPELLATE AUTHORITY IS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. T HEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THE ENTIRE ISSUES TO THE FILES OF THE A.O. THE ASSESSEE IS DIRECTED TO FURNISH ALL THE RELATED DOC UMENTS/EVIDENCES BEFORE THE A.O. AND THE A.O. IS DIRECTED TO VERIFY THE SAM E AND DECIDE THE ITA NO. 2568 /AHD/2011 . A.Y. 2008-0 9 4 IMPUGNED ISSUES AFRESH AFTER GIVING A REASONABLE AN D FAIR OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 16 - 01- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 16/01/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD