M/s. BARWIL FORBES SHIPPING SERVICES LTD., MUMBAI V. DCIT Rg. - 1(1), MUMBAI

ITA 2663/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7213 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 05-04-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MAYUR R MAKADIA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B: MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SHRI R.S. PADVEKAR (JM) ITA NO.2663/MUM/2007 (ASSTT. YEAR : 2004-05) M/S. BARWIL FORBES SHIPPING SERVICES LTD., APPE LLANT WILHELMSEN MARITIME SERVICES PVT LTD., MERCHANT CHAMBERS, 7 TH FLOOR, 41 SIR V. THAKERSEY MARG, CHURCHGATE, MUMBAI 400 020 V/S. DY COMMISSIONER OF INCOME TAX RESPONDENT RANGE 1(1), MUMBAI APPELLANT BY : SHRI. MAYUR R. MAKADIA RESPONDENT BY: S/SHRI L.K. AGRAWAL/S.S. RAN A/ PITAMBAR DAS (DR) : O R D E R : PER R. S. PADVEKAR, J.M THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE IMPUGNED ORDER OF THE LD CIT(A)- I, MUMBAI DATED 05.2.2007 FOR THE A.Y. 2004-05. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING IN PRINCIPAL THE ADDITIO NS OF RS. 18,19,737/- MADE U/S. 41(1) OF INCOME TAX ACT FOR THE UNPAID LI ABILITIES CONTINUED FOR THREE YEARS AS ON 31/3/2004. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. ASSESSING OFFICER AS WELL AS LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT DURING THE YEAR UNDER CONSIDERATION THE LIABILITY D ID NOT CEASED HENCE THE PROVISIONS OF SECTION 41(1) OF I.T. ACT IS WRON GLY APPLIED. ITA NO. 2663/MUM/2007 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. ASSESSING OFFICER AS WELL AS LD. CIT(A) FAILED TO A PPRECIATE THE FACT THAT THE LIABILITY ON ACCOUNT OF TRAMP TANK PRINCIPALS, REBATE AND FREIGHT ARE NOT CLAIMED BY WAY OF LOSS, EXPENDITURE OR TRADING LIABILITIES INCURRED BY THE APPELLANT HENCE NOT RECEIVED ANY BENEFIT HENCE WRONGLY APPLIED THE PROVISIONS OF SECTION 41(1) OF THE I.T. ACT. 3. THE ISSUE IS IN RESPECT OF THE ADDITION MADE U/ S. 41(1) OF THE ACT. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LINEAR SHIPP ING, HANDLING OF BREAK BULK VESSEL AND FREIGHT FORWARDING AND ALSO ACTING AS AN AGENT FOR OTHER COMPANIES AND CONDUCT THE BUSINESS OF FREIGHT TO ITS OWN REGI STERED MULTI MODEL TRANSPORT DOCUMENT UNDER THE TRADE NAME OF FLEET E XPRESS LINE. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUT INY AND THE ASSESSMENT WAS FRAMED U/S. 143(3). DURING THE COURSE OF THE ASSES SMENT PROCEEDINGS, AS NOTED BY THE A.O, IT WAS SEEN THAT THERE WERE CERTA IN LIABILITIES REFLECTED IN THE BALANCE SHEET, UNDER BELOW MENTIONED HEADS : (I) TRAMP TANK PRINCIPLES (II) BROKERAGE PAYABLE (III) REBATE PAYABLE (IV) EXCESS FREIGHT PAYABLE THE A.O WAS OF THE OPINION THAT THERE WAS A CESSATI ON OF LIABILITIES IN RESPECT OF THE PARTIES SHOWN UNDER ABOVE HEADS AND SAME ARE LIABLE TO BE ADDED U/S. 41(1) OF THE ACT AS INCOME OF THE ASSESSEE. THE A. O SOUGHT EXPLANATION OF THE ASSESSEE IN RESPECT OF OUTSTANDING LIABILITIES OF T HE CREDITORS WHICH WERE TOTALING TO RS.18,19,737/-. THE ASSESSEE FILED THE EXPLANATION WHICH IS REPRODUCED BY THE A.O IN THE ASSESSMENT ORDER IN PA GE NOS. 2 TO 4. THE A.O MADE THE ADDITION REJECTING THE EXPLANATION OF THE ASSESSEE BY EVOKING THE PROVISION OF SECTION 41(1) TO THE EXTENT OF RS. 18, 19,737/-. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD CIT(A) B UT DID NOT FIND FAVOUR. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE PRECEDING YEAR I.E. A.Y. 2003-04, THE IDENTICAL ADDITION WAS MADE U/S. 41(1) AND WHEN THE MATTER REACHED BEFORE THE TRIBUNAL BY WAY OF APPEAL BEING ITA NO. ITA NO. 2663/MUM/2007 3 643/MUM/2007, THE ISSUE WAS RESTORED BACK TO THE FI LE OF A.O FOR FRESH ADJUDICATION AND HENCE, THIS YEAR ALSO THE ISSUE MA Y BE RESTORED TO THE FILE OF THE A.O. 5. WE HAVE ALSO HEARD THE LD. D.R. HE HAS NO OBJ ECTION FOR RESTORING TO THE FILE OF THE A.O. THE COPY OF THE TRIBUNAL ORD ER IN ASSESSEES OWN CASE FOR THE A.Y. 2003-04 IN ITA NO. 643/MUM/2007 DT. 29.1.2 009 IS PLACED ON RECORD. WE, THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNAL IN THE IMMEDIATE PRECEDING YEAR, IN THIS YEAR ALSO RESTORE THE ISSUE OF ADDIT ION U/S. 41(1) TO THE FILE OF A.O FOR FRESH ADJUDICATION AS PER LAW. THE A.O IS DIRE CTED TO GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, ALL G ROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD DAY OF MARCH , 2010. SD/- SD/- (R.S. SYAL) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, ON THIS 23D DAY OF MARCH , 2010. :US COPY TO: 1. APPELLANT 2. RESPONDENT , 3.THE CIT(A)- I, MUMBAI 4.THE CIT -I, MUMBAI 5.THE DR, B BENCH, MUMBAI 6.GUARD FILE BY ORDER TRUE COPY ASSTT..REGISTRAR, ITAT, MUMBAI. ITA NO. 2663/MUM/2007 4 US DATE INITIALS 1. DRAFT DICTATED ON 23/2/10 --------------- SR.P.S . 2. DRAFT PLACED BEFORE AUTHORITY 15/3/10 -------- ------ SR.P.S. 3. DRAFT PROPOSED & PLACED ----------- ---------- --- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED ----------- ----------- -- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO ----------- ------------ - SR.P.S. THE SR. P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON --------- ----------- -- SR.P.S. 7. FILE SENT TO THE BENCH CLERK --------- --------- ---- SR.P.S. 8. DATE ON WHICH FILE GOES TO THE ------- --------- ---- 9. DATE OF DISPATCH OF ORDER --------- --------- ----