Pooja Paper Craft, Ahmedabad V. The ACIT.,Circle-10, Ahmedabad

ITA 3124/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9662 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Principle of natural justice
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI SHAILENDRA KR. YADAV, J.M. & SHRI ANIL CHATURVEDI, A.M.) I.T. A. NO.3124/AHD/2011 (ASSESS MENT YEAR: 2008-09) M/S.POOJA PAPER CRAFT 15, SWASTIK AVENUE 55, SWSTIK SOCIETY, NAVRANGPURA, AHMEDABAD-380009 V/S A.C.I.T., CIRCLE-10, NARAYAN CHEMBERS, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AADFP5875B APPELLANT BY : SMT. URVASHI SHODHAN, A.R. RESPONDENT BY : SHRI ROOP CHAND, SR. D.R. ( )/ ORDER DATE OF HEARING : 10-04-2015 DATE OF PRONOUNCEMENT : 17 -04-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-XVI, AHMEDABAD DATED 27.09.2011 FOR A.Y. 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF PAPER TUBES. ASSESSEE FILED ITS R ETURN OF INCOME FOR A.Y. ITA NO 3124/ AHD/2011 . A.Y. 2008-09 2 2008-09 ON 29.09.2008 DECLARING TOTAL INCOME OF RS. 28,47,910/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESS MENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 02.11.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. 36,34,470/-. AGGRIEVED BY THE OR DER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 27.09.2011 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS;- 1.1 THAT THE LEARNED HON'BLE CIT(A) HAS ERRED IN CO NFIRMING DISALLOWANCE OF RS. 5,64,805 U/S. 14A AND RS. 2,21,7587- BEING INTEREST EXPENSES. 1.2 THE APPELLANT RESPECTFULLY SUBMITS THAT THE HEA RING OF THE APPEAL WAS FIXED ON 27.09.2011. THE APPELLANT HAD SENT REPRESENTATIVE F OR ASKING ADJOURNMENT AT ABOUT 3.00 PM WHEN CIT (A) WAS NOT THERE IN OFFICE. DUE TO LAS T DAYS OF SEPTEMBER, THE REPRESENTATIVE COULD NOT WAIT FOR MORE TIME FOR ADJ OURNMENT. ON SUBSEQUENT DAY, WHEN INQUIRY WAS MADE IT WAS INFORMED THAT THE APPELLANT ORDER IS ALREADY PASSED. THE APPELLANT SUBMITS THAT SUCH AN ACTION OF ID. CIT (A ) IS CONTRARY TO THE PRINCIPLE OF NATURAL JUSTICE AND EQUITY AND THAT TOO ON THE LAST DAYS OF SEPTEMBER WHEN REPRESENTATIVES ARE BUSY IN TAX AUDIT. 1.3 THAT THE FINDINGS GIVEN BY THE LD. CIT(A) IN NO T ALLOWING ABOVE EXPENSES INCURRED BY THE APPELLANT CONTRARY TO THE FACTS OF THE CASE AND EVIDENCE ON RECORD. 1.4 IN RELATION TO DISALLOWANCE U/S. 14A, WE HAVE T O STATE THAT THE INVESTMENT IN MUTUAL FUND IS MADE OUT OF SURPLUS FUNDS WHEN THE APPELLAN T HAS EARNED CASH PROFIT OF RS. 97,78, 883/-. THEREFORE, THE PROVISIONS OF SEC. 14A ARE NO T APPLICABLE AT ALL. 1.5 IN CONNECTION WITH DISALLOWANCE OF INTEREST OF RS. 2,21,758/- WE HAVE TO STATE THAT ALL THE FUNDS PROCURED BY APPELLANT, ON WHICH INTEREST IS PAID HAS BEEN USED FOR THE PURPOSE OF BUSINESS. THE APPELLANT HAS TO STATE THAT IT HAS PAID INTEREST FREE FUNDS AS ADVANCES FOR PURCHASE AND EXPENSES AND ALSO TO ONE OF ITS EX-EMP LOYEE SHRI ARVINDBHAI K. PATEL. THE SAME BEING FOR BUSINESS CONSIDERATION, NO INTEREST WAS CHARGED ON THE SAME. 1.6 WITHOUT PREJUDICE TO THE ABOVE, WE ALSO HAVE TO STATE THAT LOANS AND ADVANCES GIVEN INTEREST FREE AMOUNT TO ONLY RS. 14,78,391/- WHICH IS QUITE LESS AS COMPARED TO PROFIT OF THE YEAR OF RS. 86,49,207 AND CASH PROFIT OF RS. 97 ,78,883/-. 4. BEFORE US, AT THE OUTSET LD. A.R. SUBMITTED THAT L D. CIT(A) HAS PASSED AN EX PARTE ORDER IN THE ABSENCE OF ANY REPRESENTATION BY THE ASSESSEE. SHE THEREFORE SUBMITTED THAT ASSESSEE BE GRANTED ONE MO RE OPPORTUNITY TO PRESENT ITS CASE BEFORE LD. CIT(A) AND THEREFORE TH E MATTER MAY BE REMITTED TO THE FILE OF LD. CIT(A). THE LD. D.R. ON THE OTHE R HAND SUBMITTED THAT ITA NO 3124/ AHD/2011 . A.Y. 2008-09 3 ASSESSEE HAS NOT BROUGHT ON RECORD ANY JUSTIFICATIO N FOR NON APPEARANCE BEFORE LD. CIT(A) AND THE TENDENCY OF THE ASSESSEE OF NOT APPEARING BEFORE LD. CIT(A) AND SUBSEQUENTLY PLEADING BEFORE HONBLE ITAT FOR A SECOND INNING TO PRESENT ITS CASE BEFORE LD. CIT(A) SHOULD NOT BE CONSIDERED FAVORABLY. HE THUS SUPPORTED THE ORDER OF A.O AND L D. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT BEFORE LD. CIT(A) NEITHER ASSESSEE APPEAR ED NOR WAS THE ASSESSEE REPRESENTED BE ANY AUTHORIZED REPRESENTATIVE AND TH US AN EX PARTE ORDER WAS PASSED BY LD. CIT(A). WE ALSO FIND THAT LD. CIT(A) IN THE ABSENCE OF ANY REPRESENTATION FROM THE SIDE OF ASSESSEE, BY A CRYP TIC ORDER HAD SUBSTANTIALLY UPHELD THE ADDITIONS MADE BY A.O BEFORE US, DURING THE COURSE OF HEARING, A SPECIFIC QUERY WAS RAISED BY THE BENCH TO THE A.R T O EXPLAIN THE REASONS AS TO WHY THERE WAS NO REPRESENTATION BEFORE LD. CIT(A ) TO WHICH LD. A.R. COULD NOT GIVE ANY SATISFACTORILY EXPLANATION OR JU STIFICATION. CONSIDERING THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE ASSESSEE BE GRANTED ONE MORE OPPORTUNITY TO PRESENT ITS CASE BEFORE LD. CIT(A) BUT AT THE SAME TIME APATHY OF THE ASSESSEE TOWARDS THE PROCEEDINGS BEFORE LOWER AUTHORITIES WITHOUT ANY REASONABLE CAU SE ALSO CANNOT BE ENCOURAGED. SO IN THE INTEREST OF JUSTICE, WE SET A SIDE THE ORDER OF LD. CIT(A) TO HIS FILE WITH DIRECTION TO DECIDE THE ISSUES IN ACCORDANCE WITH LAW AND AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND SUBJECT TO THE ASSESSEE MAKING A PAYMENT OF COST OF RS. 5,0 00/- IN THE LEGAL AID. FURTHER WE ALSO DIRECT THE ASSESSEE TO SUO MOTU APP EAR BEFORE LD. CIT(A) WITHIN 1 MONTH FROM THE DATE OF THE ORDER OF THE TR IBUNAL FOR RECEIVING THE DATE OF HEARING FROM HIM. IN VIEW OF OUR DECISION T O RESTORE TO THE ISSUES TO THE FILE OF LD. CIT(A), WE ARE NOT ADJUDICATING ON MERITS THE OTHER GROUNDS OF ITA NO 3124/ AHD/2011 . A.Y. 2008-09 4 APPEAL RAISED BY THE ASSESSEE. IN THE RESULT, THE G ROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 17 - 04 - 2015. SD/- SD/- (SHAILENDRA KR. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD 1.DATE OF DICTATION 10 - 04 -2015 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E OTHER MEMBER 13-04-2015 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 13 - 04 -2015. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 17 - 04 -2015 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2015 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2015. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER