Dy.Commissioner of Income Tax-6, Kanpur V. M/s Kundan Castings Pvt. Ltd., Kanpur

ITA 319/LKW/2014

• Counselvise Citation: 31923714 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P K KAPOOR
• Keywords: Speculation loss; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.319/LKW/2014 ASSESSMENT YEAR:2007-08 DY. CIT-6 KANPUR V. M/S KUNDAN CASTINGS PVT. LTD. 122/235, FAZAL GANJ KANPUR TAN/PAN:AAACK5601N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. P. K. KAPOOR, C.A. DATE OF HEARING: 21 09 2015 DATE OF PRONOUNCEMENT: 06 10 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS.2 LAKHS ON ACCOUNT OF LOW YIELD WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO SUBMIT THE DETAILS OF CONSUMPTION OF SCRAP AND SPONGE IRON IN QUANTITY TO COMPARE WITH EARLIER YEAR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS.16,13,596/- ON ACCOUNT OF CAPITAL EXPENDITURE WITHOUT APPRECIATING THE FACT THAT THESE EXPENSES WERE INCURRED ON INDUSTRIAL PROJECT AND, THEREFORE, THE INTEREST PAID ON AMOUNT UTILIZED FOR PURCHASE OF LAND IS CAPITAL EXPENDITURE AND HENCE NOT ALLOWABLE. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS.16,13,596/- ON ACCOUNT OF CAPITAL EXPENDITURE WITHOUT APPRECIATING THE FACTS AND MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. :- 2 -: 4. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS.1,00,000/- ON ACCOUNT OF INTEREST PAID TO UPFC IGNORING THE FACT THAT AS PER SCHEDULE-3 OF BALANCE SHEET, THERE WAS NO AMOUNT OUTSTANDING PAYABLE TO UPFC AND ASSESSEE ALSO COULD NOT OFFER ANY COGENT JUSTIFICATION REGARDING THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS.2,72,000/- ON ACCOUNT OF INTEREST AS DIFFERENCE IN FOREIGN CURRENCY RATE IGNORING THE FACT THAT ASSESSEE HAS MADE FORWARD CONTRACT IN FOREIGN CURRENCY AND PAID RS.2,72,000/- ON ACCOUNT OF FLUCTUATION OF RATE IN FOREIGN CURRENCY WITHOUT TAKING DELIVERY OF FOREIGN CURRENCY, THUS, THIS AMOUNT SHOULD BE TREATED AS SPECULATIVE LOSS U/S. 43(5). 6. THE ORDER OF THE CIT (A), KANPUR BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF THE AO BE RESTORED. 2. DURING THE COURSE OF HEARING, THE LD. D.R. HAS INVITED OUR ATTENTION THAT THE LD. CIT(A) DID NOT ADJUDICATE THE ISSUES RAISED BEFORE HIM BY PASSING A REASONED ORDER. HE HAS SIMPLY REPRODUCED THE SUBMISSIONS OF THE ASSESSEE WITH RESPECT TO THE DISALLOWANCES MADE BY THE ASSESSING OFFICER AND IN FEW LINES HE HAS DECIDED ALL THE GROUNDS SIMULTANEOUSLY, THEREFORE, THE ORDER OF THE LD. CIT(A) BE SET ASIDE. 3. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT THE LD. CIT(A) HAS ADJUDICATED THE ISSUES IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE. 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A) IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT IN PAGES 3 TO 6 OF THE ORDER OF THE LD. CIT(A), THE LD. CIT(A) HAS REPRODUCED THE SUBMISSIONS RAISED BY THE ASSESSEE AND ONLY IN THREE LINES HE DELETED THE ENTIRE ADDITIONS MADE BY THE ASSESSING OFFICER. FOR THE SAKE OF REFERENCE, WE EXTRACT THE FINDINGS OF THE LD. CIT(A) AS UNDER:- :- 3 -: 4.1 THE FINDINGS OF THE LD. A.O AND THE AVERMENTS OF THE LD. AR HAVE BEEN CONSIDERED. CONSIDERING THE SUBMISSIONS ONE ACH POINT AND THE CASE LAWS RELIED UPON, EACH OF THE DISALLOWANCES/ADDITIONS TO INCOME ARE DELETED AND ALL THE GROUNDS DEALT WITH HERE BEING ALLOWED. 5. FROM A CAREFUL PERUSAL OF THE ABOVE FINDINGS OF THE LD. CIT(A) WHILE DELETING THE ADDITION, WE FIND THAT THE LD. CIT(A) EVEN HAS NOT APPLIED HIS MIND ON THE ISSUES IN DISPUTE AND THE SUBMISSIONS MADE BY THE ASSESSEE. HE HAS SIMPLY REPRODUCED THE SUBMISSIONS AND DELETED THE ADDITIONS. THIS APPROACH OF THE LD. CIT(A) APPEARS TO BE VERY CASUAL IN NATURE. SUCH APPROACH CANNOT BE ACCEPTED FROM A JUDICIAL OFFICER. HE IS REQUIRED TO ADJUDICATE EACH AND EVERY ISSUE BY APPLICATION OF HIS MIND AND BY PASSING A REASONED ORDER. IN THE INSTANT CASE, SINCE THE LD. CIT(A) HAS NOT APPLIED HIS MIND TO THE ISSUES IN DISPUTE AND SUMMARILY DELETED THE ADDITION, WE HAVE NO OTHER OPTION BUT TO SET ASIDE HIS ORDER AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO ADJUDICATE THE ISSUES RAISED BEFORE HIM BY PASSING A REASONED ORDER. ACCORDINGLY, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH OCTOBER, 2015 JJ:2109 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT :- 4 -: 5. DR ASSISTANT REGISTRAR