Max Healthstaff International Ltd., New Delhi V. DCIT, New Delhi

ITA 2950/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65279 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 13-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Wholly owned subsidiary
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `E : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2950/DEL /2012 (ASSESSMENT YEAR : 2006-07) MAX HEALTHSTAFF INTERNATIONAL LTD., VS. DCIT, CIRC LE 6(1), 1 DR. JHA MARG, MAX HOUSE, NEW DELHI. OKHLA, PHASE-III, NEW DELHI. (PAN/GIR NO.AADCM9282G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI UPVAN GUPTA, CA REVENUE BY : SHRI R.S. NEGI, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A)-IX, NEW DELHI, DATED 06.02.2012, RELEVANT TO ASSESSMENT YEA R 2006-07, WHEREBY CONFIRMATION OF DISALLOWANCE OF RS.7,50,000/-, BEING 50% OF LEGAL A ND PROFESSIONAL EXPENSES PAID TO MAX INDIA LTD. MADE BY THE ASSESSING OFFICER, HAS BEEN CHALLE NGED. 2. FACTS INDICATE THAT THE ASSESSEE COMPANY, INCORP ORATED ON 4.3.2003, IS A 100% SUBSIDIARY OF M/S MAX INDIA LTD. WHICH IS INTO THE FIELD OF PR OVIDING LIFE INSURANCE AND HEALTHCARE SERVICES. THE RETURN OF INCOME WAS FILED ON 28.11.2006 DECLAR ING A LOSS OF RS.4,39,47,946/-. THE CASE WAS PROCESSED U/S 143(1) AND SUBSEQUENTLY SELECTED THRO UGH CASS FOR SCRUTINY AND A NOTICE U/S 143(2) WAS ISSUED AND SERVED. THE ASSESSMENT WAS C OMPLETED U/S 143(3) VIDE ORDER DATED 19.12.2008 AT A LOSS OF RS.4,31,97,950/- DISALLOWIN G A SUM OF RS.7,50,000/- BEING 50% OF LEGAL AND PROFESSIONAL EXPENSES. I.T.A. NO.2950/DEL./2012 (A.Y. : 2006-07) 2 3. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASS ESSEE FILED APPEAL AND CIT(A) PASSED EX- PARTE ORDER FOR NON-COMPLIANCE AND CONFIRMED THE IM PUGNED ADDITION. AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL. LD.AR OF THE ASSESSEE FILED APP LICATION FOR ADJOURNMENT BUT AT THE TIME OF HEARING DID NOT PRESS SUCH REQUEST AND, IT IS THE MAIN CONTENTION OF THE LD.AR OF THE ASSESSEE THAT CIT(A) HAS JUST DISMISSED THE APPEAL OF THE ASSESSE E FOR NON-PROSECUTION WITHOUT APPROPRIATELY DISCUSSING OR CONSIDERING THE ISSUE IN HAND WHICH O RDER IS NOT SUSTAINABLE IN LAW AND MAY BE SET ASIDE 4. LD.DR. HAS BEEN HEARD, WHO RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERIN G THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE ORDER OF ASSESSING OFFICER HAS BEEN C ONFIRMED WITHOUT APPROPRIATELY CONSIDERING THE ISSUE IN HAND BY THE CIT(A). SINCE IN THE ABSE NCE OF THE ASSESSEE, CIT(A) IS REQUIRED TO CONSIDER AND DECIDE THE APPEAL ON MERITS, WHICH HAS NOT BEEN DONE IN THIS CASE, THEREFORE, IMPUGNED ORDER IS NOT SUSTAINABLE. CONSIDERING THE ENTIRETY OF FACTS, CIRCUMSTANCES AND THE MATERIAL ON RECORD, WE FIND IT JUST AND APPROPRIATE TO SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK ON HIS FILE WITH THE DIRECTION TO RECON SIDER THE APPEAL AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AS WELL AS TO THE ASSESSING OFFICER. WE HOLD AND DIRECT ACCORDINGLY. 4. AS A RESULT, APPEAL OF THE ASSESSEE GETS ACCEPTE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT SOON AFTER CONCLUSI ON OF THE HEARING ON 21.08.2012. SD/- SD/- (B.C. MEENA) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : AUG. 21, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-IX, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NO.2950/DEL./2012 (A.Y. : 2006-07) 3