SHRI MANINDER SINGH CHEEMA, HOSHIARPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE HOSHIARPUR, HOSHIARPUR

ITA 334/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7090 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VEDPAL SINGH
• Assessee Lawyers: J S BHASIN
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3)

Judgement Text

PAGE | 1 ITA NO.334/ASR./2018 A.Y. 2013-14 SHRI MANINDER SINGH CHEEMA VS. DY. CIT IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.334/ASR./2018 (ASSESSMENT YEARS: 2013-14) SHRI MANINDER SINGH CHEEMA, VILLAGE DALLEWAL, DISTT. HOSHIARPUR. VS. DY. CIT, CIRCLE, HOSHIARPUR. PAN AEYPC4778B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI J. S. BHASIN, A.R. RESPONDENT BY: SHRI VED PAL SINGH, D.R DATE OF HEARING: 07.01.2019 DATE OF PRONOUNCEMENT: 15.01.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-1, JALANDHAR, DATED 22.03.2018, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT I.T. ACT), DATED 16.12.2016. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ARBITRARILY CONFIRMINGTHE ADDITION OF RS.1,54,012/- AS MADE BY THE LD. ITO, BY WAY OF DISALLOWANCE OF DEPRECIATION ON TRACTOR. 2. THAT THE LD. CIT(A) ALSO ERRED IN ARBITRARILY CONFIRMING THE ADDITION OF RS.1,10,352/- AS MADE BY THE LD. ITO BY WAY OF DISALLOWANCE OUT OF INTEREST PAID ON SECURRED LOAN INVESTED ON TRACTOR. 3. THAT THE ORDER OF CIT(A) IS NOT SUSTAINABLE AS IT WAS PASSED WITHOUT AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO ASSESSEE. 4. THAT THE ORDER UNDER APPEAL, IS AGAINST LAW AND FACTS OF THE CASE HENCE NOT SUSTAINABLE. PAGE | 2 ITA NO.334/ASR./2018 A.Y. 2013-14 SHRI MANINDER SINGH CHEEMA VS. DY. CIT 2. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM DIFFERENT STREAMS OF INCOME VIZ. (I). INCOME AS A CIVIL CONTRACTOR FROM THE BUSINESS OF SALE OF PLOTS IN A COLONY DEVELOPED BY HIM; (II). INCOME FROM RUNNING A DAIRY UNDER THE NAME AND STYLE OF KARTAR DAIRY FARM; AND (III). INCOME FROM AGRICULTURAL ACTIVITIES UNDER THE NAME M/S HITECH ORGANIC CULTIVATION PROJECT FOR FRUITS AND VEGETABLES. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE WHILE COMPUTING HIS NET TAXABLE INCOME FROM THE DAIRY BUSINESS HAD DEBITED DEPRECIATION OF RS.2,05,350/- ON A TRACTOR IN HIS PROFIT & LOSS ACCOUNT. APART THEREFROM, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD ALSO DEBITED INTEREST EXPENDITURE OF RS. 1,47,136/- PERTAINING TO REFINANCING OF THE TRACTOR FROM M/S SUNDRAM FINANCE LTD. THE A.O BEING OF THE VIEW THAT THE TRACTOR WOULD HAVE BEEN USED BY THE ASSESSEE IN THE COURSE OF HIS SUBSTANTIAL AGRICULTURAL ACTIVITIES AND HAD NO RELEVANCE FOR EARNING OF THE INCOME FROM DAIRY BUSINESS, THUS CALLED UPON HIM TO SHOW CAUSE AS TO WHY THE AFORESAID CLAIM OF DEPRECIATION AND INTEREST EXPENDITURE SO RAISED BY HIM AGAINST THE INCOME FROM DAIRY BUSINESS MAY NOT BE DISALLOWED. IN REPLY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE TRACTOR WAS USED BY HIM IN THE COURSE OF HIS DAIRY BUSINESS FOR CULTIVATING GREEN FODDER FOR THE CATTLE. HOWEVER, THE EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O, WHO FOLLOWED THE VIEW THAT WAS TAKEN BY HIS PREDECESSOR IN THE ASSESSMENT FRAMED IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR VIZ. A.Y. 2013-14. ON THE BASIS OF HIS AFORESAID DELIBERATIONS THE A.O FOLLOWING THE VIEW TAKEN BY HIS PREDECESSOR RELATED THE USE OF THE TRACTOR FOR DAIRY BUSINESS ONLY TO THE EXTENT OF 25% AND RESULTANTLY DISALLOWED THE ASSESSES CLAIM OF DEPRECIATION OF RS.1,54,012/- (OUT OF TOTAL CLAIM OF RS.2,85,350/-). ON A SIMILAR FOOTING, THE A.O RESTRICTED THE ENTITLEMENT OF THE ASSESSEE TOWARDS INTEREST PAID ON REFINANCING OF THE TRACTOR FROM M/S SUNDARAM FINANCE LTD. TO THE EXTENT OF 25% AND DISALLOWED THE INTEREST EXPENDITURE OF RS.1,10,352/- (OUT OF TOTAL INTEREST EXPENDITURE OF RS.1,47,136/-). 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IN THE COURSE OF THE APPELLATE PROCEEDINGS AS THE ASSESSEE FAILED TO PUT UP PAGE | 3 ITA NO.334/ASR./2018 A.Y. 2013-14 SHRI MANINDER SINGH CHEEMA VS. DY. CIT AN APPEARANCE, THUS THE CIT(AL) PROCEEDED WITH THE MATTER AND DISMISSED THE APPEAL. 4. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED THAT THE APPEAL HAD BEEN DISPOSED OFF BY THE CIT(A) WITHOUT AFFORDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT WAS AVERRED BY THE LD. A.R THAT AS THE ASSESSEE HAD REMAINED DIVESTED OF AN OPPORTUNITY TO EXPLAIN HIS CASE, THUS IN ALL FAIRNESS THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT(A). PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT AS THE ASSESSEE HAD FAILED TO PUT UP AN APPEARANCE BEFORE THE APPELLATE AUTHORITY, THUS THE LATTER BEING LEFT WITH NO OTHER ALTERNATIVE HAD DISPOSED OFF THE APPEAL BY WAY OF AN EXPARTE ORDER. 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, IT IS OBLIGATORY ON THE PART OF AN ASSESSEE TO REMAIN VIGILANT AFTER FILING OF AN APPEAL WITH THE CIT(A), AND THEREIN PUT UP AN APPEARANCE BEFORE THE APPELLATE AUTHORITY AS AND WHEN THE SAME IS FIXED FOR HEARING. ADMITTEDLY, IN CASE OF REPEATED FAILURE ON THE PART OF AN APPELLANT IN PUTTING UP AN APPEARANCE BEFORE THE CIT(A) DESPITE HAVING BEEN INTIMATED ABOUT THE FIXATION OF HIS APPEAL, THE APPELLATE AUTHORITY UNDER SUCH CIRCUMSTANCES REMAINS VESTED WITH THE POWER TO DISPOSE OFF THE APPEAL BY WAY OF AN EXPARTE ORDER. HOWEVER, WE ALSO CANNOT REMAIN OBLIVIOUS OF THE FACT THAT THE CIT(A) WHILE DISPOSING OFF AN APPEAL BY WAY OF AN EXPARTE ORDER, HAS TO BASE HIS DECISION ON MERITS AFTER REFERRING TO THE MATERIAL AVAILABLE ON RECORD AND ADDRESSING THE RESPECTIVE GROUNDS ON THE BASIS OF WHICH THE IMPUGNED ORDER HAS BEEN ASSAILED BY THE ASSESSEE BEFORE HIM. IN THE CASE BEFORE US, WE FIND THAT THE CIT(A) ADOPTING A CASUAL APPROACH HAD AFTER REFERRING TO THE FACTS, THEREIN BY WAY AN IDLE FORMALITY HAD ENDORSED THE OBSERVATIONS AND THE VIEW TAKEN BY THE A.O. WE ARE UNABLE TO PERSUADE PAGE | 4 ITA NO.334/ASR./2018 A.Y. 2013-14 SHRI MANINDER SINGH CHEEMA VS. DY. CIT OURSELVES TO SUBSCRIBE TO THE MANNER IN WHICH THE APPEAL HAD BEEN DISPOSED OFF BY THE CIT(A). WE ARE OF THE CONSIDERED VIEW THAT IN THE CASE BEFORE US, AS THE GRIEVANCES OF THE ASSESSEE HAD NOT BEEN ADDRESSED BY THE APPELLATE AUTHORITY IN THE RIGHT PERSPECTIVE, THEREFORE, IN ALL FAIRNESS THE MATTER REQUIRES TO BE REVISITED BY HIM. IN TERMS OF OUR AFORESAID OBSERVATIONS WE RESTORE THE MATTER TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. NEEDLESS TO SAY, THE CIT(A) WHILE DISPOSING OFF THE APPEAL SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 15.01.2019. SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDICIAL MEMBER PLACE: JALANDHAR; DATE 15.01.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , DR, ITAT, CAMP BENCH AT JALANDHAR. 6. [ / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) / ITAT, CAMP BENCH, JALANDHAR. PAGE | 5 ITA NO.334/ASR./2018 A.Y. 2013-14 SHRI MANINDER SINGH CHEEMA VS. DY. CIT SR.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS 15.1.19 SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON 15.1.19 SR.PS/PS 7 FILE SENT TO THE BENCH CLERK 16.1.19 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER