M/s. Boradway Shoe Co., Srinagar (J&K) V. The Income-tax Officer, Srinagar

ITA 257/ASR/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1424 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAGAT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.R. MEENA HONBLE ACCOUNTANT MEMBER I.T.A. NO.257 (ASR)/2013 ASSESSMENT YEAR: 2006-07 PAN: AAIFB9906A M/S BROADWAY SHOES CO. HABBA KADAL, SRINAGAR (J&K) VS. THE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. M. R. BHAGAT RESPONDENT BY: SH. TARSEM LAL (DR) DATE OF HEARING: 2 7.08.2015 DATE OF PRONOUNCEM ENT: 16.09.2015 ORDER PER A.D. JAIN (JM): THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 200 6-07, TAKING THE FOLLOWING GROUNDS: 1. THE APPELLANT ORDER IS ILLEGAL, PERVERSE, ARBIT RARY, NOT BASED ON THE FACTS OF THE CASE ESPECIALLY BECAUSE DUE TO TURMOIL IN THE VALLEY OF KASHMIR THE REQUEST TO ADJOURN THE APPEAL, COULD NOT REACH IN TIME AND THE LAW INVOLVE D IN THE ISSUE DISCUSSED IN THE ASSESSMENT ORDER. 2. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE EX-PARTE ORDER PASSED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THA T, DUE TO STRIKES, CURFEWS, AND DISTURBED CONDITIONS IN VALLEY THE APPELLANT COULD NOT ATTEND THE ASSESSMENT PROCEDINGS AND HE FURTHER ERRED IN PASSING THE APPELLATE ORDER WITHOUT GIVING REASONABLE OPPORTUNITY TO THE APPELLANT IN PRESENCE OF SIMILAR CIRCUMSTANCES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADITION OF RS.30,00,000/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF LOAN ADVANCED TO MRS. G.H.SHAH & MRS. (MRS. SHAMINA SADDIQUE, PARTNER), I GNORING THE FACTS SUFFICIENT FUNDS WERE AVAILABLE WITH THE ASSESSEE AND THE PROVISIONS OF SECTION WERE WRONGLY APPLIED. THIS ADDITION WAS MADE ILLEGALLY AND PRAYED TO BE D ELETED. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST PAID TO THE PARTNERS (INCO RRECTLY MENTIONED AS INTEREST & SALARY 2. ITA NO.25 7 (ASR)/2013 ASST. YE AR 2006-07 IN THE ASSESSMENT AND APPELLANT ORDERS) IGNORING TH AT THE PARLIAMENT IN ITS WISDOM HAS FIXED A LIMIT ON THE DEDUCTION TO BE ALLOWED TO A F IRM IN RESPECT OF INTEREST ON CAPITALS OF THE PARTNERS AT THE RATE MENTIONED IN PARTNERSHIP D EED NOT EXCEEDING 12% P.A. IS ONLY REQUIRED TO SEE WHETHER INTEREST PAID TO THE PARTNE RS IS WITHIN THE LIMITS PRESCRIBED U/S 40(B)(IV) OF THE ACT. IT IS PRAYED THAT INTEREST PA ID TO THE PARTNERS ON THEIR CAPITAL INVESTED IN THE PARTNERSHIP FIRM AMOUNTING TO RS.5, 20,727/- MAY BE DIRECTED TO BE ALLOWED. 2. THE NOTICE SENT TO THE ASSESSEE THROUGH RPAD HA S BEEN RETURNED WITH THE POSTAL REMARK ADDRESSEE LEFT WITHOUT LEAVING A DDRESS. RETURN TO SENDER. HOWEVER, SHRI M.R. BHAGAT, AR HAS APPEARED ON BEHAL F OF THE ASSESSEE. THE ARGUMENTS OF BOTH THE REPRESENTATIVES OF THE PARTIE S HAVE BEEN HEARD. 3. IT IS SEEN THAT THE ORDER UNDER APPEAL, I.E., OR DER DATED 1.2.2013 WAS PASSED BY THE LEARNED CIT(A) EX-PARTE QUA THE ASSES SEE, SINCE NOBODY APPEARED ON THE DATE OF HEARING, I.E., 28.01.2013, NOR ANY A PPLICATION FOR ADJOURNMENT OR WRITTEN SUBMISSION WAS FILED. 4. BEFORE US, THE FIRST GROUND TAKEN BY THE ASSESSE E STATES THAT DUE TO THE TURMOIL IN THE KASHMIR VALLEY, THE ASSESSEES REQUE ST FOR ADJOURNMENT OF THE APPEAL COULD NOT REACH IN TIME. IN GROUND NO.2, THE ASSESSEE HAS STATED THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE EX-P ARTE ORDER PASSED BY THE AO WITHOUT APPRECIATING THAT DUE TO STRIKES, CURFEWS, AND DISTURBED CONDITIONS IN THE VALLEY, THE ASSESSEE COULD NOT ATTEND THE ASSES SMENT PROCEEDINGS. IT HAS BEEN SUBMITTED THAT THE LEARNED CIT(A) FURTHER ERRE D IN PASSING HIS ORDER WITHOUT GIVING REASONABLE OPPORTUNITY TO THE ASSESS EE IN THE PRESENCE OF SIMILAR CIRCUMSTANCES. THE LEARNED AR OF THE ASSESSEE HAS C ONTENDED THAT THE MATTER 3. ITA NO.25 7 (ASR)/2013 ASST. YE AR 2006-07 BE, ACCORDINGLY, REMITTED TO THE AO FOR FRESH DECIS ION ON MERITS. HE STATES THAT THERE WILL BE NO DELINQUENCY ON THE PART OF THE ASS ESSEE. 5. ON THE OTHER HAND, THE LEARNED DR HAS OPPOSED TH IS. IT HAS BEEN STATED AS AVAILABLE FROM THE DETAILS CONTAINED IN THE IMPU GNED ORDER, THE ASSESSEE IS A HABITUAL DEFAULTER AND HAS CHOSEN TO LET THE CASE G O TOTALLY UNREPRESENTED BEFORE THE AO AS WELL AS BEFORE THE CIT(A), WITHOUT SHOWING SUFFICIENT CAUSE AND THEREFORE, IT DESERVES NO MERCY. 6. HAVING CONSIDERED THIS ASPECT OF THE MATTER, WE ARE OF THE VIEW THAT THIS MATTER DOES REQUIRE TO BE SENT BACK TO THE FILE OF THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON HEARING THE ASSESSEE. THOUG H THE ASSESSEE HAS NOT BEEN ABLE TO JUSTIFY HIS DEFAULTS BEFORE THE TAXING AUTHORITIES DATEWISE, IT REMAINS UNDISPUTED THAT THE AO, IN PARA 2 OF THE AS SESSMENT ORDER, AS HIMSELF NOTED THAT .........THERE WAS SOME HARTALS AND SOM E BANDHS IN SOME PARTS OF THE CITY BECAUSE OF THE ON GOING ELECTION PROCESS.. .... THIS WAS WITH REGARD TO THE POSITION IN THE LAST MONTH OF 2008. IT SHOWS THE CONDITION PREVALENT IN THE VALLEY AT THE RELEVANT TIME. MOREOVER, IN THE W RITTEN SUBMISSIONS FILED BEFORE US, IT HAS BEEN STATED THAT: IT IS BROUGHT TO YOUR KIND NOTICE THAT CONDITIONS IN THE VALLEY OF KASHMIR BECAME TENSE BECAUSE SOME LAND WAS BEING ALLOTTED TO SRI AMARNAT H SHRINE BOARD AND ANNOUNCEMENT OF ELECTION TO THE JAMMU & KASHMIR ASS EMBLY. THE APPELLANT DID NOT ATTEND THE ASSESSMENT PROCEDINGS ON 30.09.2008. THE LEARNED A.O DID NOT ENSURE OR BRING ANY EVIDENCE ON RECORD TO SNSURE THAT NOTICE ISSUED BY SPEED POST HAD BEEN SERVED ON THE ASSESSMENT ON OR BEFORE 30-09-2008. T HERE IS NO MENTION IN THE ASSESSMENT ORDER THAT NOTICE ISSUED ON 24.09.2008 W AS PROPERLY ADDRESSED AND SERVED 4. ITA NO.25 7 (ASR)/2013 ASST. YE AR 2006-07 UPON THE ASSESSEE. IT WAS ALSO MENTIONED IN THE GRO UND OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX THAT DURING CALENDAR YEA R 2008, THERE WERE HARTALS AND BANDHS ON ONE PRETEXT OR THE OTHER IN SRINAGAR WHER E ASSESSEE HAD ITS SHOP AND DUE TO THREAT PERCEPTION FROM THE TERRORISTS/SEPARATIST S, THE ASSESSEE COULD NOT ATTEND ASSESSMENT PROCEEDINGS. 7. SO FAR AS REGARDS THE PROCEEDINGS BEFORE THE LEA RNED CIT(A), IN THE WRITTEN SUBMISSIONS, IT HAS BEEN, INTER ALIA, CONTENDED AS FOLLOWS: THE LEARNED CIT(A) HAS PREPARED A CHART AT PAGE 2 REGARDING ATTENDANCE OF THE APPELLANT OF THE APPELLANT PROCEEDINGS. OUT OF 8 PR OCEEDINGS, THE A.R OF THE ASSESSEE ATTENDED ON 5 OCCASIONS TO SEEK ADJOURNMENTS. THERE IS NO EVIDENCE ON THE FILE OF THE CIT(A) THAT NOTICE ISSUED ON 04.07.2011, 08.08.2011 WERE SERVED. THE APPELLANT OR HIS A.R COULD NOT ATTEND ON 28.01.2013 BECAUSE DUE TO B AD WEATHER ALL THE ROUTERS FROM SRINAGAR TO JAMMU WERE BLOCKED. 8. IN THE ABOVE FACTS AND CIRCUMSTANCES, CONSIDERI NG THE TOTALITY THEREOF, WE DEEM IT FIT TO REMIT THE MATTER TO THE FILE OF THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON HEARING THE ASSESSEE. THE A SSESSEE SHALL, NO DOUBT, CO-OPERATE IN THE REMAND PROCEEDINGS AND SHALL ALSO COOPERATE IN THE EXPEDITIOUS DISPOSAL THEREOF. ORDERED ACCORDINGLY. 9. THIS REMAND, HOWEVER, IS BEING ORDERED IN THE PE CULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND IT SHALL NOT ACT AS A PRECEDENT FOR OTHER CASES. 10. IN THE RESULT, FOR THE STATISTICAL PURPOSES, TH E APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2015. SD/- SD/- (T. R. MEENA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16.09. 2015 /PK/ PS. 5. ITA NO.25 7 (ASR)/2013 ASST. YE AR 2006-07 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S BROADWAY SHOE CO. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.