Dhruv Dyestuff Pvt.Ltd., Ankleshwar V. The ACIT., Bharuch Circle, Bharuch

ITA 2769/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8681 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-03-2010
• Assessment Year: 1996-1997
• Appeal Filed On: 20-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Opportunity of being heard; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MAHAVIR SINGH , JUDICIAL MEMBER) ITA.NO.2769/AHD/2007 ASSTT.YEAR : 1996-1997 DHRUV DYESTUFF PVT. LTD. PLOT NO.7209, GIDC ANKLESHWAR. VS. ACIT, BHARUCH CIRCLE BHARUCH. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MEHUL K. PATEL REVENUE BY : SMT. NEETA SHAH O R D E R PER G.D. AGARWAL, VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST ORDER OF THE CIT(A)-III, BARODA DATED 13-7- 2004. 2. IN THIS APPEAL BY THE ASSESSEE, SEVERAL GROUNDS ARE RAISED. HOWEVER, AT THE TIME OF HEARING BEFORE US, IT WAS POINTED BY TH E LEARNED COUNSEL THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED WITHOUT ALLOW ING ADEQUATE OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE, AND THEREFORE, IT W OULD BE MOST APPROPRIATE IF THE MATTER IS SET ASIDE TO THE FILE OF THE AO. HE POINTED OUT THAT THE MAJOR ADDITION IS ON ACCOUNT OF NON-ACCEPTANCE OF SHARE A PPLICATION MONEY AMOUNTING TO RS.16,04,480/-. TO INQUIRE INTO THE G ENUINENESS OF THE SHARE APPLICATION MONEY, THE AO ISSUED SUMMONS TO THE SHA REHOLDERS FOR PERSONAL ATTENDANCE. THE SUMMONS WERE ISSUED ON 20-3-2003 A ND HEARING WAS FIXED ON 25-3-2003. THE CASE WAS ALSO FIXED FOR HEARING ON 25-3-2003. THE ASSESSEE AS WELL AS THE SHAREHOLDERS FILED AN APPLICATION SEEKI NG ADJOURNMENT FOR TWO WEEKS. HOWEVER, THE AO DID NOT ALLOW THE ADJOURNME NT BECAUSE THE MATTER WAS GETTING BARRED BY LIMITATION ON 31-3-2003. ACC ORDINGLY, THE AO COMPLETED THE ASSESSMENT UNDER SECTION 144 BY DISAL LOWING THE ENTIRE LOSS CLAIMED BY THE ASSESSEE AND MAKING FURTHER ADDITION OF RS.16,04,180/- ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY. HE HAS STATED THAT THERE WAS A DISPUTE AMONGST THE DIRECTORS AND THEREFORE THE BUS INESS WAS RUNNING INTO LOSS. ITA.NO.2769/AHD/2007 -2- SUBSEQUENTLY, THE OFFICE OF THE ASSESSEE COMPANY WA S CLOSED AND THEREFORE EVEN AT THE TIME OF HEARING BEFORE THE CIT(A) NO NO TICE COULD BE SERVED UPON THE DIRECTORS. IN VIEW OF THE ABOVE, IT IS REQUEST ED BY THE LEARNED COUNSEL THAT THE ORDER OF THE AUTHORITIES BELOW MAY BE SET ASIDE AND THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE AO. HE ALSO GAVE AN UNDERTAKING ON BEHALF OF HIS CLIENT THAT IF THE MATTER IS SET ASIDE, THE ASS ESSEE WOULD MAKE PROPER COMPLIANCE. 3. THE LEARNED DR ON THE OTHER HAND OPPOSED TO THE ASSESSEES REQUEST FOR SETTING ASIDE THE MATTER BACK TO THE FILE OF THE AO . SHE STATED THAT THE AO HAS ALSO PROVIDED NUMBER OF OPPORTUNITIES TO THE ASSESS EE. 25-3-2003 WAS THE LAST DATE OF HEARING AND NOT THE FIRST. THEREFORE, SHE SUBMITTED THAT THE ORDER OF THE AUTHORITIES BELOW SHOULD BE UPHELD. 4. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER CONSI DERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, AS WELL AS THE ARGUMENTS O F BOTH THE SIDES, IN OUR OPINION IT WOULD MEET ENDS OF JUSTICE IF THE MATTER IS SET ASIDE TO THE FILE OF AO. WE THEREFORE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTORE THE MATTER BACK TO THE FILE OF THE AO. WE DIRECT HIM TO ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THEREAFTER MAKE THE ASSESSMENT DE NOVO . 5. AS WE HAVE ALREADY SET ASIDE THE ASSESSMENT ORDE R, VARIOUS GROUNDS RAISED BY THE ASSESSEE AGAINST THE DISALLOWANCE OF LOSS/ADDITION NEED NO SEPARATE ADJUDICATION. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TO B E TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 26 TH MARCH, 2010. SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT ITA.NO.2769/AHD/2007 -3- PLACE : AHMEDABAD DATE : 26-03-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD