RB & Sons Pvt. Ltd, Sambalpur V. CIT, Sambalpur

ITA 262/CTK/2013

• Counselvise Citation: 26222114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VENKATRAMANI
• Assessee Lawyers: D PATI
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI P.K.BANSAL (AM) AND D.T.GARASIA (JM) I.T.A. NO. 262/CTK/2013 ASSESSMENT YEAR: 2007-08 R .B. & SONS PVT LTD., KEDNGHATI, SAMBALPUR PA NO.AABCR 7311 K VS CIT, SAMBALPUR APPELLANT RESPONDENT FOR THE APPELLANT: SHRI D.PATI FOR THE RESPONDENT: SHRI VENKATRAMANI DATE OF HEARING: 30/01/2015 DATE OF PRONOUNCEMENT: 3 / 3 /2015 ORDER PER P.K.BANSAL, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER DATED 14.2.2012 OF LD CIT- SAMBALPUR UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2007-08. 2. THE APPEAL IS TIME BARRED BY 353 DAYS, BUT ASSES SEE HAS MOVED A PETITION DATED 22.4.2013,DULY ACCOMPANIED BY AN AFFIDAVIT OF SRI B ABULAL PRUSETH, MANAGING DIRECTOR OF THE ASSESSEE COMPANY, SEEKING CONDONATION OF DEL AY. IT IS, INTER ALIA, STATED THAT THE ORDER DATED 142.2012 OF LD CIT, SAMBALPUR WAS S ERVED ON THE ASSESSEE ON 8.3.2012. DURING THE SAID PERIOD, SRI SAMARJEET GH OSH WAS LOOKING AFTER THE ACCOUNT OF THE COMPANY AND DID NOT BRING TO THE NOTICE NOR TAKE ANY ACTION FOR FILING OF APPEAL. DUE TO SOME DISPUTE, SHRI GHOSH LEFT THE OFFICE AND DID NOT HANDOVER THE CHARGE AND ALSO INFORM ABOUT THE SAID ORDER OF LD CIT. THE ASSESSEE CAME TO UNDERSTAND ABOUT THE ORDER AFTER RECEIPT OF THE ORDER DATED 8.3.2013 PASSED BY ACIT, CIRCLE-1, SAMBALPUR. THEN ONLY BY PUTTING EFFORT, THE ASSES SEE STRESSED THE ORDER PASSED BY 2 I.T.A. NO. 262/CTK/2013 ASSESSMENT YEAR: 2007-08 THE CIT AND FILED THE APPEAL BEFORE THE TRIBUNAL. THE DELAY IS ATTRIBUTED DUE TO ABOVE REASON. 3. AFTER HEARING BOTH THE PARTIES, WE HAVE GONE THR OUGH THE CONDONATION PETITION FILED BY THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KATIJI (1987) 167 ITR 471 HAS HELD THAT THERE CAN BE NO PRESUMPTION OF DELIBERATENESS OR NEGLIGENCE OR MALA FIDES IN CASE OF DELAY, BECAUSE LITIGANTS RUN A SERIOUS RISK WITHOUT ANY BENEFIT BY THE DELAY. THE JUDICIARY IS RESPECTED N OT FOR LEGALIZING INJUSTICE ON TECHNICAL GROUNDS BUT FOR REMOVING INJUSTICE. ON A PERUSAL OF CONDONA TION PETITION, WE NOTED THAT THE ASSESSEE HAS SUFFICIENT CAUSE FROM FILING THE APPEAL BEFORE THE TRIBUNAL AND, THEREFORE, WE CONDONE THE DELAY. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE LD CIT, SAMBALPUR AFTER CALLING A REPORT NOTED THAT THE ASSESSEE COMPANY HAD AN OUTSTANDING SECURED LOAN OF RS.1,54,58,726/- AND THE ASSESSEE HAD CLAIMED INTEREST AMOUNTING TO RS.18,76,953/- ON THE ABOVE UNSECURED LOAN. IT WAS FURTHER NOTED THAT THE ASSE SSEE COMPANY INVESTED AN AMOUNT OF RS.1,59,37,596/- TOWARDS SHARE APPLICATION MONEY IN R.B. SPONGE IRON LTD. SINCE THE ASSESSEE COMPANY INCURRED THE LOSS DURING THE Y EAR, LD CIT WAS OF THE VIEW THAT UNSECURED LOANS WERE TAKEN TOWARDS INVESTMENT IN SH ARE APPLICATION MONEY AND, THEREFORE, HE WAS OF THE VIEW THAT THE INTEREST OF RS.18,76,953/-, PRIMA FACIE , WAS NOT ALLOWABLE U/S.36(1)(III) OF THE ACT. ACCORDINGLY, HE ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AND AFTER GOING THROUGH THE REPLY OF THE A SSESSEE, LD CIT SET ASIDE THE ORDER PASSED UNDER SECTION 143(3) DATED 31.12.2009 BY THE AO WITH THE DIRECTION TO RE-DO THE ASSESSMENT IN THE LIGHT OF DISCUSSIONS TAKES PL ACE IN THE ORDER PASSED U/S.263 AND AFTER AFFORDING AN OPPORTUNITY TO THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THR OUGH THE ORDER OF LD CIT PASSED UNDER SECTION 263 AS WELL AS ASSESSMENT ORDE R PASSED UNDER SECTION 143(3) OF THE ACT. WE HAVE ALSO GONE THROUGH THE PAPERS AND DOCUMENTS AS HAS BEEN RELIED ON BEFORE US. WE NOTED THAT IN THIS CASE, EVEN THE AS SESSEE HAS DEBITED A SUM OF RS.18,76,953/- UNDER THE HEAD INTEREST TOWARDS TH E BANK LOAN IN ITS PROFIT AND LOSS ACCOUNT, THE AO DID NOT MAKE ANY ENQUIRY OR EXAMINE ON THIS ISSUE. THERE IS NO 3 I.T.A. NO. 262/CTK/2013 ASSESSMENT YEAR: 2007-08 WHISPER IN THE ASSESSMENT ORDER THAT THE ASSESSEE I S ENTITLED FOR DEDUCTION. FROM THE ASSESSMENT ORDER AND PAPERS RELIED ON BEFORE US, WE ARE OF THE VIEW THAT IT IS A CASE WHERE THE AO HAS NOT EXAMINED THE ISSUE REGARDING C LAIM OF INTEREST BY THE ASSESSEE U/S.36(1)(III) OF THE ACT PAID ON THE BANK LOAN. I T IS NOT A CASE WHERE THE AO HAS EXAMINED THE ISSUE AND FORMED AN OPINION ON THE ALL OWANCE OF INTEREST. IT IS A CASE WHERE NO INQUIRY HAS BEEN CARRIED OUT BY THE AO. N OT CONDUCTING ANY INQUIRY IN THE CLAIM OF THE ASSESSEE HAS BEEN HELD THE ORDER IS ER RONEOUS. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE APPEAL FILED BY THE ASSESSEE. IT IS A FACT THAT BOTH THE CONDITIONS THAT THE ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO TH E INTERESTS OF THE REVENUE ARE TO BE SATISFIED BY INVOKING THE JURISDICTION U/S.263 OF T HE ACT. IN THIS CASE, WE ARE OF THE VIEW THAT BOTH THE CONDITIONS HAVE BEEN SATISFIED. THEREFORE, THE ORDER PASSED BY LD CIT DOES NOT SUFFERS FROM ANY ILLEGALITY. WE, THER EFORE, CONFIRM THE SAME. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) BY P UTTING THE COPY OF THE SAME ON NOTICE BOARD ON 3/3/2015. SD/- SD/- (D.T.GARASIA) (P.K.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, PANAJI 3 / 3 /2015 B.K.PARIDA, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: R .B. & SONS PVT LTD., KEDNGHATI, S AMBALPUR 2. THE RESPONDENT: THE CIT, SAMBALPUR 3. THE CIT, 4. THE CIT(A), 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER ASST. REGISTRAR, ITAT, CUTTACK