MADHUKANT V SHAH, MUMBAI V. ITO 24(2)(4), MUMBAI

ITA 2677/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79370 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.2677/MUM/2013, A.Y. 2008-09 MR.MADHUKANT SHAH, 25/207, RIDDHI SIDDHI, NEAR FILMISTAN STUDIO GALL, GOREGAON (W), MUMBAI. PAN:AAFPS 0843L (APPELLANT ) VS. THE INCOME TAX OFFICER, 24(2)(4) MUMBAI. (RESPONDENT) APPELLANT BY : SHRI RATAN SAMAL RESPONDENT BY : SHRI MA URYA PRATAP DATE OF HEARING : 10/07/2014 DATE OF PRONOUNCEMENT : 10 /07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-34,MUMBAI DATED 18/1/2013 FOR ASSESS MENT YEAR 2008-09. GROUNDS OF APPEAL READ AS UNDER: 1. LD. CIT APPEAL ERRED IN DISMISSING THE APPEAL INSPITE OF THE FACT THAT ALL MATERIAL EVIDENCES EITHER BROUGHT BEFORE THE AO OR BEFORE TH E CIT APPEAL AND MORE PARTICULARLY LD.CIT APPEAL IN MECHANICALLY DISMISSING THE APPEAL WITH AN OBSERVATION THAT THE EVIDENCES WERE FIRST TIME FILED BEFORE HIM IN VIOLA TION OF RULE 46A. 2. LD. CIT APPEAL ERRED IN CONFIRMING THE ADDITION MADE BY THE AO IN RESPECT OF PROPORTIONATE DISALLOWANCE OF INTEREST RS.6.99,000 THOUGH ASSESSEE HAS SUBMITTED NECESSARY CONFIRMATION IN RESPECT OF ADVANCES MADE TO THE PARTIES SUBSTANTIATING THAT THEY ARE IN THE COURSE OF BUSINESS WHICH IS EVIDENT FROM ASSESSMENT AND APPEAL ORDERS. 3. LD. CIT APPEAL ERRED IN CONFIRMING THE ADDITION MADE BY THE AO IN RESPECT OF DISALLOWANCES MADE TOWARDS ACCOUNT OF INTEREST PAYM ENT U/S 40(A)(IA) FOR AN ITA NO.2677/MUM/2013, A.Y. 2008-09 2 AMOUNTING RS. 93,614/-. THOUGH ASSESSEE HAS SUBMITT ED NECESSARY CERTIFICATES IN FORM 15G WHICH IS EVIDENT FROM ASSESSMENT AND APPEA L ORDERS. 4. LD. CIT APPEAL ERRED IN CONFIRMING THE ADDITION MADE BY THE AO IN RESPECT OF DIFFERENCES IN THE BALANCES OF THE DEBTORS AND CRED ITORS FOR AN AMOUNTING OF RS. 87.52,516 THOUGH ASSESSEE WAS ABLE TO RECONCILE TO SHOW THAT THERE IS NO DIFFERENCE AND THOUGH AO HAS NOT PROVIDED OPPORTUNITY TO SUBMI T THE SAME ON THE GROUND THAT THE MATTER IS GOING TO BE BARRED BY LIMITATION. 2. IN THE PRESENT CASE CERTAIN ADDITIONS WERE MADE BY THE AO. BEFORE LD. CIT(A) SOME ADDITIONAL EVIDENCES WERE FILED WHICH HAVE NOT BEEN ADMITTED BY LD. CIT(A) WITH THE FOLLOWING OBSERVATIONS. 4. I FIND THE JOINT VENTURE AGREEMENT DATED 10.11 .2007 ENTERED INTO BY THE APPELLANT WITH M/S. NIDHI STEELS REPRESENTED BY ITS PROPRIETOR MR. NARESH V. SHAH WAS TOWARDS WRECKING OF 32 SHIPS FROM BOMBAY P ORT TRUST ACQUIRED BY M/S. NIDHI STEELS. THIS EVIDENCES FILED IS RELATED TO THE DISALLOWANCE OF INTEREST OF RS.6,99,000/- BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD DISCUSSED THIS ISSUE IN PARA 5.4 OF THE ORDER. HOW EVER, THIS EVIDENCE WAS NOT FILED BEFORE THE ASSESSING OFFICER DURING THE COURS E OF ASSESSMENT PROCEEDINGS AS THERE IS NO MENTION OF THIS IN THE ORDER. SIMIL ARLY, THE OTHER 3 EVIDENCES WERE FILED FOR THE FIRST TIME BEFORE ME AND HENCE T HEY ARE TREATED AS ADDITIONAL EVIDENCE FIELD. THE APPELLANT HAD FAILED TO SATIS FY THE CONDITIONS LAID DOWN IN RULE 46A OF THE INCOME TAX RULES AND HENCE I AM UNA BLE TO ACCEPT THE EVIDENCES FILED. THEREAFTER, LD. CIT(A) HAS REFERRED TO THE CONDUCT OF THE ASSESSEE AND CERTAIN JUDICIAL PRONOUNCEMENTS AND FINALLY HE HAS COME TO THE CONCLUSION THAT ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL AND HE HAS N O OTHER OPTION EXCEPT TO DISMISS THE SAME. IT MAY BE MENTIONED HERE THAT LD. CIT(A ) HAS NOT ADJUDICATED THE ISSUES ON MERIT AND THE APPEAL FILED BY THE ASSESSEE HAS BEEN DISMISSED FOR THE REASON THAT ADDITIONAL EVIDENCES WERE NOT LIABLE TO BE ADM ITTED. IT IS THE MAIN GRIEVANCE OF THE ASSESSEE THAT LD. CIT(A) HAS COMMITTED AN ERROR IN DISMISSING THE APPEAL FILED BY THE ASSESSEE AND REJECTING THE REQUEST OF THE A SSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCES AND THE APPEAL FILED BY THE AS SESSEE HAS BEEN MECHANICALLY DISMISSED WITHOUT DECIDING THE ISSUES. ITA NO.2677/MUM/2013, A.Y. 2008-09 3 3. WE HAVE CAREFULLY GONE THROUGH THE ORDER PASSED BY LD. CIT(A). ACCORDING TO MANDATE OF SECTION 250(6) APPELLATE ORDERS OF CIT( A) ARE TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORITY THEREO N AND THE REASONS FOR SUCH DECISION. THE UNDERLYING RATIONALE OF THE PROVISIO N IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE TRIBUNAL. SPEAKING ORDER W OULD OBVIOUSLY ENABLE THE PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM . ABSENCE OF THE FORMULATION OF THE POINT FOR DECISION FOR WANT OF CLARITY IN A DEC ISION UNDOUBTEDLY PUTS A PARTY IN QUANDARY. SECTION 250(6) EXPRESSLY EMBODIES THE PR INCIPLES OF NATURAL JUSTICE AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. I N ABSENCE OF DECISION OF THE AUTHORITY ON THE GROUND OF APPEAL RAISED BY THE ASS ESSEE WILL MAKE THE ORDER PASSED BY LD. CIT(A) BEING AN ORDER NOT IN ACCORDANCE WITH LAW. REFERENCE IN THIS REGARD CAN BE MADE TO THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF GUJARAT THEMIS BIOSYN LTD. VS. JCIT, 74 ITD 339 (AHD). THEREFORE, KEEPING IN VIEW THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT IT WILL MEET TH E INTEREST OF JUSTICE IF THE MATTER IS RESTORED BACK TO THE FILE OF LD. CIT(A) WITH A DIRE CTION TO ADMIT ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND ALSO GIVE THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING ON ALL THE ISSUES AND ALSO TO PRODUCE RELEVANT DOC UMENTS TO SUPPORT THEIR CONTENTIONS, THEREAFTER DECIDE EACH OF THE ISSUES IN ACCORDANCE WITH LAW. 4. FOR THE REASONS INDICATED ABOVE, WE HEREBY SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND DIRECT THE CIT(A) TO DISPOSE OF THE APPEAL OF THE ASSESSEE AFRESH AS PER DIRECTIONS GIVEN ABOVE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 10/07/2014 ! ' #$ % &'( 10/07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 10/07/2014 ITA NO.2677/MUM/2013, A.Y. 2008-09 4 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS