Shreegopal Govind Sponge Pvt. Ltd., Kolkata V. A.C.I.T.-Circle-3, Kolkata, Kolkata

ITA 2739/KOL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0491 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 10-12-2013
• Court: TRIBUNAL
• Department Lawyers: SABOORUL H USMANI
• Assessee Lawyers: V N PUROHIT; H V BHARADWAJ ACA
• Keywords: Business income; Depreciation; Opportunity of being heard; Unabsorbed depreciation
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HON BLE SRI RAJPAL YADAV , JM & HON BLE SRI B.P.JAIN , AM] I.T.A NO. 2739 /KOL/20 13 ASSESSMENT YEAR : 2003 - 04 SHREEGOPAL GOVIND SPONGE PVT.LTD. - V S . - A.C.I.T., CIRCLE - 3, KOLKATA KOLKATA [ PAN : AAGCS 2173 M) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI V.N.PUROHIT, FCA & SHRI H.V.BHARADWAJ, ACA FOR THE RESPONDENT : SHRI SABOORUL H.USMANI, JCIT, SR.DR DATE OF HEARING : 07 .05 . 2015 DATE OF PRONOUNCEMENT : 08.06.2015. ORDER PER SHRI B.P.JAIN , AM THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD.CIT (A) - XX, KOLKATA DATED 02.09.2013 FOR ASSESSMENT YEAR 2003 - 04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE CIT(A) HAS ERRED IN CONFIRMING THE FINDING OF A.O. THAT COMMISSION OF RS.1,20,87,649/ - EARNED BY ASSESSEE IS ASSESSABLE AS INCOME FROM OTHER SOURCE AS AGAINST ASSESSEE S CLAIM TREATING THE SAME AS BUSINESS INCOME. 2. THAT THE CIT(A) HAS FURTHER ERRED IN NOT ALLOWING SET OFF OF BUSINESS LOSS OF RS.1,63,50,515/ - COMPRISING CURRENT DEPRECIATION OF RS.1,25,47,302/ - AND UNABSORBE D DEPRECIATION OF RS.38,03,213/ - AGAINST THE COMMISSION INCOME. 3. THAT THE CIT(A) IS NOT CORRECT IN CONFIRMING THE DISALLOWANCE OF RS.15,000/ - OUT OF TELEPHONE EXPENSES ON THE GROUND OF BEING FOR PERSONAL PURPOSES. 4. THAT THE APPELLANT/ASSESSEE CRAVES LE AVE TO ADD, TO AMEND OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS ON OR BEFORE THE HEARING OF THE APPEAL. 3. AS REGARDS GROUND NO.1 OF THE ASSESSEE T HE BRIEF FACTS OF THE CASE AS PER AO S ORDER AT PAGES 2 TO 6 ARE REPRODUCED HEREIN BELOW : - THE P&L A/C OF THE ASSESSEE INCLUDE RECEIPTS ON ACCOUNT OF SALE AND MISC.INCOME FOR RS.3,73,63,369/ - AND RS.1,20,87,649/ - RESPECTIVELY. THE DETAILS ABOUT THE NATURE OF MISC. INCOME HAVE NOT BEEN SUBMITTED ALONG WITH TH E RETURN. HOWEVER, IN COURSE OF HEARING THE ASSESSEE SUBMITTED THE SAME AS COMMISSION INCOME RECEIVED AS UNDER : - NAME & ADDRESS OUR BILL NO./DATE NATURE OF SERVICES AMOUNT (RS.) 2 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 2 RENDERED RAWMENT RESOURCES 3C, ORIENTAL HOUSE 6C, ELGIN ROAD, KOLKATA - 70002 0 15.01.03 SERVICES RENDERED IN CONNECTION WITH SUPPLY AND DELIVERY TO VISHAKAPATTAM STORE OF MEDIUM CARBON FERRO CHROME TO VISHAKAPATTNAM STEEL PLAN, 275 MT @RS.3431 MT 14,94,077.54 28.02.03 CO - ORDINATION & LIASIONING WORK WITH USHA ISPAT/MSIC AND JINDA L VIJAYNAGAR OF LAM COKE 9,43,525 TOTAL 24,37,602.54 RAWMENT COMMODITIES (P)LTD. 3C ORIENTAL HOUSE, 6C, ELGIN ROAD, KOLKATA - 700020. 28.02.03 CO - ORDINATION & LIASIONING WORK WITH ISPAT METALLICS LTD. FOR SOURCING OF COKE ARRANGEMENT OF SHIPMENT, SUPERVI SION OF DISCHARGE, MOVEMENT AND DELIVERY OF THE SAME TO ISPAT METALLICS LTD. 25,00,000.00 31.03.03 CO - ORDINATION & LIASIONING WORK WITH SUPPLIER AND PORT AUTHORITIES FOR CHROME ORE/CONCENTRATION, QTY. 44681.850 MT 21,00,047.00 31.03.03 CO - ORDINATION & LIASIONING WORK WITH ISPAT METALLICS LTD. FOR SOURCING OF COKE ARRANGEMENT OF SHIPMENT, SUPERVISION OF DISCHARGE, MOVEMENT AND DELIVERY OF THE SAME TO ISPAT METALLICS LTD. 25,00,000.00 TOTAL 1,19,75,252.08 3 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 3 SUZION ENERGY SUZION SHRIMATI SOCIETY NEAR SHRI KRISHAN COMPLEX NARANGPURA 03.03.03 SALES COMMISSION OF SERVICES RENDERED IN THE SALE/MARKETING OF 1 NO.1000/KW/1250 KW, WIND TURBINE GENERATORS TO SASTHA PAPER MILLS LTD. RS.8,50,000/ - PER WTG AS PER THE TERMS OF AGREEMENT DATED 30.03.02. 8,50,000.00 04.03.03 SALES COMMISSION OF SERVICES RENDERED IN THE SALE/MARKETING OF 1 NO.1000/KW/1250 KW, WIND TURBINE GENERATORS TO LEO FASTENERS, PONDICHARRY, SASTHA PAPER MILLS LTD. RS.8,50,000/ - PER WTG AS PER THE TERMS OF AGREEMENT DATED. 17,00,000.00 TOTAL 25,50,000.00 TO VERIFY THE ABOVE FACTS, LETTER U/S 133(6) OF THE ACT WERE WRITTEN ON THE ADDRESSES SUPPLIED BY THE ASSESEE TO FOLLOWING PARTIES AND THE OUTCOME OF EACH OF THEM IS BEING DISCUSSED ONE BY ONE : - 1 . M/S. SUZION ENERGY LTD. ON 18.01.2005 CAME BACK UNSERVED WITH POSTAL REMARKS NO SUCH FIRM IN NARANGPUR . THE ASSESSEE WAS INTIMATED ABOUT THE RESULT OF ENQUIRY ON 07.04.2005. 2. RAWMENT COMMODITIES PVT. LTD. ON 18.01.2005, REPLY RECEIVED ON 02.02.2005 SPECIFYING THE DETAIL OF BILLS RAISED AND AMO UNT PAID AS UNDER : BILL RAISED FOR AMOUNT PAID DATE OF ISSUE OF CHEQUE AND CHEQUE DETAILS 25,00,000.00 25,00,000.00 CHEQUE NO.010676 DATED 31.03.2003 OF HSBC, SHAKESPEARE SARANI BRANCH, CHEQUE HANDED OVER AFTER 31.03.2003 25,00,000.00 25,00,000.00 CHEQU E NO.010679 DATED 31.03.2003 OF HSBC, SHAKESPEARE SARANI BRANCH, CHEQUE HANDED OVER AFTER 31.03.2003 25,00,000.00 25,00,000.00 CHEQUE NO.010680 DATED 31.03.2003 OF HSBC, SHAKESPEARE SARANI BRANCH, CHEQUE HANDED OVER AFTER 31.03.2003 3 . M/S. RAWMET RESOURCES ON 18.01.2005 BILL RAISED AMOUNT PAID DATE OF ISSUE OF CHEQUE AND CHEQUE DETAILS 4 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 4 FOR 14,94,077.54 10,00,000.00 CHEQUE NO.017701 DATED 24.01.2003 OF HSBC, SHAKESPEARE SARANI BRANCH, `4,94,077.54 CHEQUE NO.369801 DATED 10.02.2003 OF HSBC, SHAKESPEARE SA RANI BRANCH, 9,43,525.00 9,43,525.00 CHEQUE NO.369836 DATED 06.03.2003 OF HSBC, SHAKESPEARE SARANI BRANCH. 4 . ORISSA MINERAL CORPORATION ON 10.02.2005 RETURNED UNSERVED ON 01.03.2005 WITH POSTAL REMARKS NO SUCH ADDRESSEE . ON RECEIPT OF REPLY A LETTER WA S WRITTEN TO THE ASSESSEE ON 07.04.2005 INTIMATING THE RESULT OF INQUIRY AS MENTIONED AND ALSO REQUESTED TO SHOW CAUSE WHY ADVERSE INFERENCE SHOULD NOT BE TAKEN. 5 . A.K.VERMA, ISPAT INDUSTRIES LTD.. AGM, SHIPPING ON 10.02.2005 REPLY RECEIVED STATING THAT MR; .A.K.VERMA LEFT THE JOB. 6 . MR.B.RAVI KUMAR, VISAKHAPATTNAM STEEL PLANT, ON 10.02.2005 CAME BACK UNSERVED ON 04.03.2005. ON RECEIPT OF REPLY A LETTER WAS WRITTEN TO THE ASSESSEE ON 07.04.2005 INTIMATING THE RESULT OF INQUIRY AS MENTIONED AND ALSO REQUIRED TO SHOW CAUSE WHY ADVERSE INFERENCE SHOULD NOT BE TAKEN. 7 . MR.PAWAN KR.KEDIA M/S. JINDAL VIJAYANAGAR CO.LTD. ON 10.02.2005 REPLY WAS RECEIVED ON 14.02.2005 STATING W HAVE NO TRANSACTION WITH M/S/. RAWMET RESOURCES, 40/7, BALLYGUNGE CIRCULAR ROAD, KOLKATA - 19 D URING F.Y. 2002 - 03 OR ANY TIME BEFORE OR AFTER THAT PERIOD. ON RECEIPT OF REPLY A LETTER WAS WRITTEN TO THE ASSESSEE ON 07.04.2005 INTIMATING ABOUT THE REPLY SUBMITTED BY THE ASSESSEE AND ALSO THE RESULT OF INQUIRY AS MENTIONED AND ALSO REQUESTED TO SHOW C AUSE WHY ADVERSE INFERENCE SHOULD NOT BE TAKEN. 8 . MR.R.K.KHETRAPAL, C/O USHA ISPAT LTD. ON 10.02.2005 REPLY RECEIVED ON 03.03.2005 STATING THAT NO DIRECT TRANSACTION WITH M/S. ROWMET RESOURCES DURING F.Y. 2002 - 03. IT WAS INFORMED THAT LOW ASH METALICAL COKE MEASURING 24908 MT AND 15134 MT WAS PURCHASED THROUGH MSTC LTD. FROM SUDAMI METAL GMPH. ON RECEIPT OF REPLY A LETTER WAS WRITTEN TO THE ASSESSEE ON 07.04.2005 INTIMATING ABOUT THE REPLY SUBMITTED BY THE ASSESSEE AND ALSO THE RESULT OF INQUIRY AS MENTIONED AND ALSO REQUESTED TO SHOWCAUSE WHY ADVERSE INFERENCE SHOULD NOT BE TAKEN. ON 05.07.2005, THE ASSESSEE SUBMITTED A REPLY STATING THE ASSESSEE HAS SUBMITTED IN ITS REPLY EARLIER THAT SERVICES WERE RENDERED TO ROWMET COMMODITIES PVT. LTD. AND ROWME T RESOURCES AND THE NATURE OF RESOURCES WAS ALSO DEFINED IN THE ASSESSEE S REPLY. THE ABOVE ASSESSEE CARRIED ON VARIOUS WORKS AS INSTRUCTED BY AND AS COVERED UNDER ITS AGREEMENT WITH ROWMET AND THOSE FACTS CAN BE EXAMINED FROM ROWMET. IN THIS CONNECTION, T HE ASSESSEE FURTHER SUBMITS THAT ROWMET WAS ACTING ON BEHALF OF ITS PRINCIPAL WHO WERE PRIVY TO THE CONTRACTS WITH THE INDIAN COMPANIES LIKE USHA ISPAT, JINDAL ETC. AND THE SUPPLY OF MATERIAL AND PAYMENT OF RELEVANT CONSIDERATION WERE BETWEEN THE INDIAN CO MPANY AND FOREIGN COMPANY. ROWMET WAS ACTING AS A FACILITATION AGENT FOR VALUABLE CONSIDERATION FOR ITS FOREIGN PRINCIPAL SINCE THEY HAD NO OFFICES IN INDIA. OUR SERVICES WERE RESTRICTED TO FACILITATING ROWMET IN COURSE OF ITS RENDERING SERVICES FOR FOREIG N PRINCIPAL 5 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 5 AND LEAVE OUR CONSIDERATION WAS RECEIVED FROM ROWMET AND NOT FROM THE ABOVE MENTIONED INDIAN COMPANIES. THE ASSESSEE SEEMS TO CONVEY THROUGH THE ABOVE REPLY THAT THE ASSESSEE IS AN AGENT OF ROWMET WHICH IS ITSELF AN AGENT OF OTHER COMPANIES. THE POINT WHICH ATTRACTS THE ATTENTION THAT THE ROWMET WILL MAKE ANY PAYMENT TO THE ASSESSEE ONLY WHEN CERTAIN SERVICES ARE RENDERED AND TO VERIFY THE ACTUAL SERVICES RENDERED NECESSARY ENQUIRY WAS CONDUCTED IN WHICH IT WAS FOUND THAT THE PRINCI PAL OF ROWMET HAD NO TRANSACTION. HOWEVER, TO VERIFY THE GENUINENESS AND CORRECTNESS THE ASSESSEE WAS ASKED TO FURTHER TO SUBMIT DETAILS REGARDING PERSON RESPONSIBLE FOR LIASIONING JOB, DETAILS OF EXPENSES MADE TO EARN COMMISSION INCOME AND IN ITS REPLY TH E ASSESSEE SUBMITTED ON 13.03.2006 THAT THE SERVICES RELATING TO COMMISSION EARNING ACTIVITIES WERE NOT CONFINED WITH A SINGLE DESIGNATED PERSON. ON THE OTHER HAND THE COMMISSION EARNED WAS THE RESULT OF COLLECTIVE LABOUR OF THE E MPLOYEES OF THE CO. UNDER THE GUIDANCE OF THE MANAGEMENT OF THE CO. IT HAS ALREADY BEEN STATED THAT THE EXPENSE S INCURRED TO EAR N THE COMMISSIO N ARE SHOWN UNDER THE HEAD TRAVELING EXPENSES AND GENERAL EXPENSES IN THE P & L A/C BUT THOSE CANNOT BE ISOLATED SPECIFICALLY BECAUSE OF THE INTEGRATED IN NATURE OF THE OPERATION OF THE CO. THE ASSESSEE IN ITS REPLY HAS SUBMITTED THAT THE EXPENSES HAVE BEEN SHOWN UNDER THE HEAD TRAVELING EXPENSES AND GENERAL EXPENSES. P&L A/C WERE EXAMINED AND FOUND THAT UNDER THESE TWO HEADS THE EXPENSES ARE FOR RS.23,053/ - AND RS.35,295/ - . IN OTHER WORDS, THE ASSESSEE HAS TRIED TO SAY THAT BY MAKING EXPENDITURE OF LESS THAN RS.58,000/ - APPROXIMATELY, COMMISSION OF R S.1,20,87,469/ - HAVE BEEN EARNED. IT IS WORTH TO MENTION THAT EXPENDITURE OF RS.58,000/ - AP PROXIMATELY IS NOT EXCLUSIVELY FOR EARNING COMMISSION RATHER IT IS CUMULATIVE TO THE MAIN BUSINESS OF MANUFACTURING AND SALE OF SPONGE IRON FOR RS.3.73 CRS. APPROX. THE ASSESSEE HAS NOT SHOWN THIS COMMISSION INCOME UNDER THE HEAD COMMISSION BUT THE SAME HAS BEEN SHOWN AS MISC. INCOME AND ON ENQUIRY IT WAS FOUND THAT IT IS FROM COMMISSION RECEIVED FROM SEVERAL PARTIES AS MENTIONED ABOVE. THE ASSESSEE WAS ASKED TO SUBMIT THE NAME AND ADDRESS OF THE PERSON WHO ARE RESPONSIBLE FOR LIASIONING JOB BUT THE SAME HAS NOT BEEN SUBMITTED RATHER A ROUND ABOUT REPLY WAS SUBMITTED BY SAYING COLLECTIVE RESPONSIBILITY. THE ASSESSEE HAS NOT NAMED THE PERSON BECAUSE IT WAS ALSO DIRECTED TO PRODUCE THE PERSON RESPONSIBLE FOR LIASIONING. NAME OF THE EMPLOYEES WERE ALSO NOT NA MED BECAUSE THERE WAS FEAR THAT HE MAY BE CALLED U/S 131 BY USING SUMMON FOR EXAMINATION. MOREOVER, IT IS ALSO PERTINENT TO MENTION THAT IN P&L A/C. THE ASSESSEE HAS DEBITED ONLY RS.3,78,000/ - UNDER THE HEAD SALARY AND TOTAL ADMINISTRATIVE EXPENDITURE I S RS.13,40,349/ - AGAINST TURNOVER OF RS.4.98 CRORES APPROXIMATELY WHICH INCLUDE MISC. INCOME (COMMISSION FOR RS.1.20 CRORES). THE EARNING OF COMMISSION BY DOING LIASIONING JOB, DEMANDS FREQUENT TRAVELLING AND VISITING AND STAYING AT VARIOUS PLACES THAT ALS O WHEN THE PARTIES TO/FOR WHOM SUPPLIES ARE TO BE MADE AND FROM WHOM SUPPLY IS TO BE RECEIVED ARE SITUATED AT FAR APART PLACES AND IT WILL CERTAINLY REQUIRE HUGE EXPENDITURE OVER TRAVELLING AND STAYING BUT NO SUCH EXPENDITURE IS FOUND TO HAVE BEEN DEBITED TO P&L A/C. THE ASSESSEE WAS ALSO ASKED TO SUBMIT THE VALUE OF WORK DONE AND RATE OF COMMISSION BUT THESE HAVE NOT BEEN SUPPLIED. IN VIEW OF THE AFORESAID FACTS, IT IS CONSIDERED THAT THE ASSESEE HAS NOT RENDERED ANY SERVICES TO ANY OF THE PERSONS FROM WHOM COMMISSION TO RS.1.20 CRS. IS SAID TO HAVE BEEN RECEIVED BECAUSE COMMISSION IS RELATED TO RENDERING OF SERVICES. THE MERE CONFIRMATION FROM SOME OF THE PARTIES WHO CLAIMED TO HAVE PAID COMMISSION TO THE ASSESSEE DOES NOT PROVE THAT THE ASSESSEE HAD ACTUALLY EARNED SERVICE CHARGES BECAUSE RENDERING OF SERVICES 6 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 6 ARE NOT PROVED AND IN ABSENCE OF ANY EVIDENCE/CIRCUMSTANTIAL EVIDENCE LEADING TO SATISFACTION TH AT SERVICES HAVE ACTUALLY BEEN RENDERED, THE INCOME OF RS.1,20,87,649/ - SAID TO HAVE BEEN REC EIVED AS COMMISSION AND DISCLOSED AS BUSINESS INCOME IS TREATED AS INCOME FROM OTHER SOURCES . 3.1. BEFORE THE LD. CIT(A) THE LD. COUNSEL FOR THE ASSESSEE MADE THE SUBMISSION WHICH WERE NOT ACCEPTED AND ACCORDINGLY THE LD. CIT(A) VIDE PARA 7.2. OF HIS O RDER CONFIRMED THE ACTION OF AO. 4. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON BASICALLY THE SUBMISSIONS MADE BEFORE BOTH THE AUTHORITIES BELOW AND PRAYED THE BENCH TO REVERSE THE ORDER OF LD.CIT(A). 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF BOTH THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACT IN THE PRESENT CASE ARE THAT THE ASSESSEE HAS DECLARED RS.1,20,87,649/ - UNDER THE HEAD MISCELLANEOUS INCOME BUT NO NATURE O F THE SAID MISCELLANEOUS INCOME WAS EXPLAINED IN THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAME WAS COMMISSION INCOME RECEIVED FROM VARIOUS PERSONS. TO VERIFY THE FACTS THE AO ISSUED NOTICES U/S 133(6) OF THE ACT TO THE PERSONS CONCERNED. IN MOST OF THE CASES NOTICES WERE RETURNED BACK UNSERVED. IT IS SURPRISING THAT SHRI PAWAN KR.KEDIA AND SHRI R.K.KHETRAPAL DENIED OF HAVING ANY TRANSACTION WITH THE ASSESSEE. IT IS ONLY IN THE CASE OF RAWME T COMMODITIES PVT. LTD. AND M/S. RAWMET RESOURCES REPLY WERE RECEIVED BUT THEY CONFIRMED OF THE PAYMENT OF CHEQUE BUT DID NOT ESTABLISH WHETHER ANY SERVICES WERE RENDERED T O THEM BY THE ASSESSEE. THE ASSESSEE IN EACH AND EVERY CASE WAS PROVIDED OPPORTUNIT Y ON SEVERAL OCCASIONS TO PROVE THAT THE SAID MISCELLANEOUS INCOME WAS IN FACT THE COMMISSION INCOME RECEIVED IN LIEU OF THE SERVICES PROVIDED TO VARIOUS PERSONS. THE FACT OF NOTICES 7 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 7 BEING RETURNED BACK UNSERVE D OR DENIAL BY SHRI PAWAN KUMAR KEDIA AND SRI R .K.KHETRAPAL AND REPLY OF RAWMET COMMODITIES PVT. LTD. AND M/S.RAWMET RESOURCES WERE INFORMED TO THE ASSESSEE AND DUE OPPORTUNITIES WAS GIVEN TO THE ASSESSEE TO PROVE THE COMMISSION INCOME RECEIVED IN LIEU OF SERVICES PROVIDED TO VARIOUS PERSONS IN THE FO RM OF EVIDENCES/DOCUMENTS OR DETAILS ETC. BUT NOTHING WAS PRODUCED BEFORE AO AS WELL AS LD.CIT(A). EVEN BEFORE US NO DOCUMENTARY EVIDENCE WAS PLACED ON RECORD TO ESTABLISH THAT IN FACT IT WAS A COMMISSION INCOME IN LIEU OF THE SERVICES RENDERED TO VARIOUS PERSONS. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE RELIANCE PLACED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE LD. CIT(A) AND BEFORE US ON THE DECISION OF VARIOUS COURTS OF LAW CANNOT COME TO THE HELP OF THE ASSESEE. ACCORDINGLY WE FIND NO INFIRMITY IN TH E ORDER OF LD. CIT(A), WHO HAS RIGHTLY CONFIRMED THE ACTION OF AO. THUS GROUND NO.1 OF THE ASSESSEE IS DISMISSED. 7. AS REGARDS GROUND NO.2 THE BRIEF FACTS OF THE CASE ARE THAT THE AO DID NOT ALLOW SET OFF OF DEPRECIATION OF RS.1,63,50,515/ - IN FACT (RS.1 ,62,07,054/ - ) AS CLAIMED BY THE LD. COUNSEL FOR THE ASSESSEE BEING THE CURRENT YEARS DEPRECIATION AT R S.1,25,47,302/ - AND BROUGHT FORWARD UNABSORBED DEPRECIATION U/S 32(2) OF THE ACT AT RS.36,59,752/ - . THE LD. COUNSEL FOR THE ASSESEE MAINLY RELIED UPON THE DECISION OF ITAT DELHI F BENCH IN ITA NO .3412/DEL/2006 DATED 25 TH JANUARY, 2008 WHERE THE UNABSORBED DEPRECIATION FOR SIMILAR YEARS WAS LIABLE TO BE SET OFF AGAINST THE INCOME FROM HOUSE PROPERTY. THE SAID DECISION OF THE ITAT DELHI BENCH HAS BEEN PLA CED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF VARIOUS COURTS OF LAW RELIED UPON BEFORE LD. CIT(A) AND ALSO THE DECISIONS IN THE CASE OF SURESH INDUS TRIES PVT. LTD IN ITA NO .5374/MUM/2011 BY ITAT MUMBAI E BENCH DATED 10 TH OCTOBER, 2012. IT WAS ARGUED THAT THE LD. CIT(A) HAS NOT DISCUSSED WITH THE DECISIONS OF VARIOUS COURTS OF LAW RELIED UPON IN HIS ORDER IN PARA 8.2. THE LD. COUNSEL FOR THE ASSESSEE PRAYED TO ALLOW THE DEPRECIATION AS WELL AS THE UNABSORBED DEPRECIATIO N IN VIEW OF THE DECISIONS RELIED UPON BEFORE THE LD. CIT(A)AS WELL AS BEFORE US. 8 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 8 9. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE DIS PUTED FACT IN THE PRESENT CASE IS THAT THE LD. COUNSEL FOR THE ASSESSEE IN HIS WRITTEN SUBMISSION WHICH HAS BEEN REPRODUCED IN PARA 8.1. BY THE LD. CIT(A) HAS RELIED UPON VARIOUS COURT OF LAW WHICH HAVE NOT BEEN DISCUSSED OR DISTINGUISHED BY LD. CIT(A) IN HIS ORDER AT PARA 8.2. THE RELEVANT PART OF THE LD. CIT(A) S ORDER IS REPRODUCED HEREIN BELOW FOR THE SAKE OF CONVENIENCE : - 8.2. I HAVE PERUSED THE ASSESSMENT ORDER AND CONSIDERED THE SUBMISSION OF THE APPELLANT. THE FACT OF THE CASE IS THAT THE APPELLA NT SET OFF DEPRECIATION OF RS.1,26,90, 763/ - AGAINST ITS INCOME. HOWEVER, THE A.O. DID NOT ALLOW THE SAME AS THERE WAS NO BUSINESS INCOME AVAILABLE WITH THE APPELLANT IN THE ASSESSED INCOME. AFTER GOING THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, THE A .O. WAS JUSTIFIED IN NOT ALLOWING THE SET OFF OF DEPRECIATION AS PER SECTION 32(2) OF THE I.T.ACT. FURTHER, THE CASE LAWS RELIED UPON BY THE APPELLANT ARE NOT APPLICABLE IN THE PRESENT CASE AS THE FACTS IN THE APPELLANT S CASE ARE DIFFERENT FROM THOSE CASE S. HENCE, APPEAL ON THIS GROUND IS DISMISSED. 10.1. THEREFORE IN THE CIRCUMSTANCES AND FACTS OF THE CASE ORDER OF LD. CIT(A) IS NOT A SPEAKING ORDER AND ACCORDINGLY ORDER OF LD. CIT(A) ON THIS ISSUE IS SET ASIDE TO HIS FILE TO DECIDE THE ISSUE DENOVO AND PASS A SPEAKING ORDER AND TO DEAL WITH THE DECISIONS OF VARIOUS COURTS OF LAW RELIED UPON BY THE ASSESSEE ALONG WITH THE DECISIONS OF THE TRIBUNAL IN THE CASE OF M/S. JAI USHIN LIMITED AND SURESH INDUSTRIES LIMITED (SUPRA) RELIED UPON BEFORE US AND DECIDE THE ISSUE DE NOVO BUT AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE IN THE FACTS AND CIRCUMSTANCES OF THE CASE GROUND NO.2 OF THE ASSESSEE IS SET ASIDE TO THE FILE OF LD. CIT(A) TO DECIDE THE ISSUE DE NOVO IN VIEW OF THE F INDINGS HEREINABOVE AND ALLOWED FOR STATISTICAL PURPOSES. 11. AS REGARDS GROUND NO.3 OF THE ASSESSEE AO MADE DISALLOWANCES TO THE EXTENT OF RS.15,000/ - ON ACCOUNT OF TELEPHONE EXPENSES SINCE THE ASSESSEE HAD SUBMITTED NO DETAILS. THE LD. CIT(A) CONFI RMED THE ACTION OF AO. 9 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 9 12. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE IN FACT DID NOT PURSUE THIS GROUND. HOWEVER, IN THE CIRCUMSTANCES AND FACTS OF THE PRESENT CASE THE ASSESSEE HAVING NOT SUBMITTED ANY DETAILS OF THE TELEPHONE EXPENSES BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A), WHO HAS RIGHTLY CONFIRMED THE ACTION OF AO. THUS GROUND NO.3 OF THE ASSESSEE IS DISMISSED. 13. GROUND NO.4 OF THE ASSESSEE, BEING GENERAL IN NATURE DOES NOT REQ UIRE ANY ADJUDICATION. ORDER PRONOUNCED IN THE C OURT ON ______________ SD/ - SD/ - [ RAJPAL YADAV ] [ B.P.JAIN ] JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED : [ RG PS ] COPY OF THE ORDER FORWARDED TO: 1. SHREEGOPAL GOVIND SPONGE PRIVATE LTD., C/O V.N.PUROHIT & CO., CHARTERED ACCOUNTANTS, DIAMOND CHAMBERS, UNIT - III, 4 TH FLOOR, SUIT NO.4G, 4, CHOWRINGHEE LANE, KOLKATA - 70001 6. 2. A.C.I.T., CIRCLE - 3 , KOLKATA 3. CIT(A) - XX , KOLKATA 4. CIT KOLKATA. 5 . CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES ORDER PRONOUNCED IN THE OPEN COURT ON 08.06.2015. SD/ - SD/ - (MAHAVIR SINGH) (B.P.JAIN) JM AM DATED 08.06.2015. 10 ITA NO. 2739/KOL/2013 SHREEGOPAL GOVIND SPONGE PVT. LTD. A.YR. 2003 - 04 10