ACIT, CHENNAI V. Mohan Metal Industries, CHENNAI

ITA 2924/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90413 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-05-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A. NO.2924/MDS/2014 ( / ASSESSMENT YEAR : 2011-2012) THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE -5, CHENNAI ( %& /APPELLANT) VS M/S. MOHAN METAL INDUSTRIES, K-20, VYASARPADI, CHENNAI 600 039. [PAN:ABCPS 0892H] ( '(%& /RESPONDENT) / APPELLANT BY : SHRI. A.V. SREEKANTH, IRS, JCIT. / RESPONDENT BY : NONE /DATE OF HEARING : 21.5.2015 /DATE OF PRONOUNCEMENT : 29.05.2015 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY REVENUE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, CHENNAI, D ATED 08.09.2014 FOR THE ASSESSMENT YEAR 2011-12. I.T.A.NO.2924/MDS/2014. :- 2 -: 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 2.1.THE LEARNED CIT(A) ERRED IN DELETING THE ADDIT ION OF 22,50,000/- MADE TOWARDS DISALLOWANCE OF COMMISSION EXPENDITURE. 2.2 THE LEARNED CIT(A) HELD THAT ASSESSEE HAS PRO DUCED PROOF THAT THE PROPERTY WAS UNDER LITIGATION. THIS FACT AND EVIDENCE WAS ARGUED AND PRODUCED BEFORE THE LD.CIT(A) FOR THE FIRST TIME. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NEITHER CALLED FOR A REMAN D REPORT NOR GIVEN THE ASSESSING OFFICER A REASONABLE OPPORTUNITY TO VERIFY THE FRESH EVIDENCE. 2.3 THE DETAILS REGARDING LITIGATION WAS NEW EVIDEN CE PRODUCED BEFORE THE LD.CIT(A). IF THE ASSESSING OFF ICER WAS AWARE OF THIS LITIGATION HE WOULD HAVE ACCORDIN GLY MADE ENQUIRES REGARDING MARKET RATE FOR LITIGATED PROPERTIES AND FIXED THE ALLOWABLE COMMISSION WHI CH EXERCISE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS HELD THAT THE ASSESSING OFFICER HAS N OT DONE. 2.4 HAVING REGARD TO THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE GIVEN THE ASSESSING OFFICER A REASONABLE OPPORTUNITY TO EXAMINE/VERIFY THE FRESH EVIDENCE PRODUCED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 2.5 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE APPRECIATED THAT THE ASSESSEE HAS NOT PRODUCED BEFORE THE ASSESSING OFFICER THE FOUR PERSONS TO WHOM COMMISSION WAS PAID BUT MERELY FILED A MEMORANDUM OF UNDERSTANDING LISTING THE SERVICES TO BE RENDERED BY THE RELATED PARTIES. 2.6 THE LEARNED CIT(A) HAS NOT APPRECIATED THE FAC T THAT THE PERSONS STATED TO HAVE RECEIVED THE PAYMENT HAV E ADMITTED THE SAME AS SHARE OF PROFIT ON LAND AN D NOT AS COMMISSION. THIS COULD NOT BE VERIFIED BY ASSESSING OFFICER AS THE PERSONS WERE NOT PRODUCED BEFORE HIM. 2.7 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE APPRECIATED THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TOWARDS THE VARIOUS ACTIVITIE S AS MENTIONED IN THE MEMORANDUM OF UNDERSTANDING. I.T.A.NO.2924/MDS/2014. :- 3 -: 3. NONE APPEARED FOR ASSESSEE. WE PROCEED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LD. DEPARTMENTAL REPRESENT ATIVE. 4. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL REPRES ENTATIVE DREW OUR ATTENTION TO PARA 7 OF THE ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS)S STATING THAT AT THE TIME OF FIRST APPELLATE PROCEEDINGS, THE ASSESSEE HAD PRODUCED COPIES OF POLICE COMPLIAN T, CRIMINAL PETITION FILED BY THE ASSESSEE AND HIGH COURT ORDER DATED 07 .02.2014, RELATING TO THE CRIMINAL PETITION, TO SHOW THAT JOINT DEVELO PMENT OF THE LAND WAS NOT FEASIBLE. THE COMMISSIONER OF INCOME TAX (APPEA LS) RELIED ON THIS DECISION TO DELETE THE ADDITION OF G22,50,000/- TOW ARDS COMMISSION EXPENDITURE. ACCORDINGLY, THE LD. DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT THERE WAS VIOLATION OF RULE 46A OF T HE INCOME TAX RULES AND REQUESTED THAT OPPORTUNITY OF HEARING TO THE GIVEN TO THE ASSESSING OFFICER. 5. WE ACCEDE TO THE REQUEST OF THE LD. DEPARTMENTAL REPRESENTATIVE. ACCORDINGLY IN THE INTEREST OF JUS TICE, WE REMIT THE ENTIRE ISSUE BACK TO THE FILE OF THE ASSESSING OFFI CER FOR FRESH CONSIDERATION. THE ASSESSING OFFICER SHALL CONSIDE R ALL THE DOCUMENTS WHATEVER THE ASSESSEE HAS FILED BEFORE THE COMMISSI ONER OF INCOME I.T.A.NO.2924/MDS/2014. :- 4 -: TAX (APPEALS) AND DECIDE THE ISSUE OF DISALLOWANCE OF COMMISSION EXPENDITURE OF G22,50,000/- AFRESH. 6. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.2 924/MDS/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 29TH DAY OF MAY, 2 015, AT CHENNAI. SD/- SD/- ( . ! ) V. DURGA RAO ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' /CHENNAI. #$ /DATED:29.05.2015. KV $% &' (' /COPY TO: 1. ) APPELLANT 2. / RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. '+, - /DR 6. ,. / /GF.