NETWORTH COMMODITIES & INVESTMENT LTD, MUMBAI V. DCIT (OSD) CIR 2(3), MUMBAI

ITA 337/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5824 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 21-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D K GOPAL SHRI T A KHAN
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 337 / MUM/ 20 1 6 ( / ASSESSMENT YEAR: 2011 - 1 2 ) M/S. NETWORTH COMMODITIES & INVESTMENTS LTD. OFFICE NO. 901/902 , ATLANTA CENTRE, OPP, UDYOG BHAWAN, SONAWALA ROAD, GOREGAON (E), MUMBAI - 400063. / VS. DY. CIT (O.S.D) CIRCLE 2(3), MUMBAI ROOM NO. 552, AAYAKAR BHAVAN, SONAWALA ROAD, GOREGAON (W), MUMBAI - 400063. ./ ./ PAN/GIR NO. : AABCN 9894 K ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 04 .0 7 .201 8 / DATE OF PRONOUNCEMENT : 06. 07. 2018 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 27 . 1 1 .201 5 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 6 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO T HE A.Y. 2011 - 12 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 6, MUMBAI ERRED IN PASSING THE ORDER DATED 27.11.2015 UPHOLDING THE ASSESSMENT ORDER DATED 30.03.2014 PASSED UNDER SECTION 143(3) OF TH E ACT WITHOUT PROVIDING THE ASSESSEE BY : SHRI D. K. GOPAL REVENUE BY: SHRI T. A. KHAN (DR) ITA. NO.337 /M/201 6 A.Y. 20 11 - 12 2 APPELLANT REASONABLE OPPORTUNITY OF BEING HEARD. HENCE, THE ORDER DATED 27.11.2015 PASSED BY THE LD. CIT(A) IS AGAINST THE PROVISION OF NATURAL JUSTICE AND THE SAME MAY BE SET ASIDE, 2. THE LD - C1T(A) ERRED IN CONFIRMING THE AC TION OF THE LD. A.O. IN MAKING ADDITION OF RS. 1,68,47,784/ - UNDER SECTION 40A(2)(B) OF THE ACT WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. HENCE, THE ADDITION OF RS.1,68,47,784/ - MADE UNDER SECTION 40A(2)(B) IS UNJUSTIFIED AND THE SAME MAY BE DELETED, 3. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ADMINISTRATIVE EXPENSES OF RS. 1,68,47,784/ - HAVE BEEN INCURRED BY THE APPELLANT DURING THE COURSE OF BUSINESS ACTIVITIES AND THE SAME ARE SUPPORTED WITH PROPER DOCUMENTARY EVIDENCES. HENCE, THE ADDITION OF RS. 1,68,47,784/ - MADE UNDER SECTION 40A(2)(B) IS UNJUSTIFIED AND THE SAME MAY BE DELETED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE ABOVE GROUNDS OF APPEAL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCO ME TO THE TUNE OF RS. NIL WITH CURRENT YEAR LOSS AT RS. 61,37,913/ - ON 28.09.2011. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2 ) OF THE I.T. ACT, 1961 DATED 07.09.2012 WAS ISSUED AND SERVED UPON THE ASSESSEE. NOTICE S U/S 142(1) OF THE ACT DATED 24.01.2013, 06.08.2013 & 29.11.2013 WERE ALSO ISSUED AND SERVED UPON THE ASSESSEE. THE COMPANY WAS A MEMBER OF MCX AND NCDEX AND PROVIDING BROKING SERVICE IN ONLINE COMMODITY BUSINESS. THEREAFTER THE INCOME OF THE ASSESSEE WAS ASSESSED AFTER SOME DISALLOWANCE TO THE TUNE OF RS.1,07,09,870/ - . FEELING AGGRIEVED , THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALSO CONFIRM ED THE ORDER PASSED BY THE ASSESSING OFFICER , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ITA. NO.337 /M/201 6 A.Y. 20 11 - 12 3 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. AT THE VERY OUTSET, T HE LD. REPRESENTATIVE OF THE ASSESSEE H AS ARGUED THAT THE CIT(A) HAS DECIDED THE APPEAL OF THE ASSESSEE EXPARTE WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE , THEREFORE, THE SAID CIRCUMSTANCES, THE ORDER OF THE CIT(A) IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW. IT IS ALSO ARGUED THAT THE ASSESSEE SOUGHT THE ADJOURNMENT ON 10.11.2015 BECAUSE THE CASE WAS FIXED ON 12.11.2015 BUT ON THAT LETTER THE OFFICER RECORDED THE ADJOURNMENT DATE ON 1 0.12.2015 WHEREAS THE APPEAL HAD BEEN DECIDED ON 27.11.2015 WRONGLY AND ILLEGALLY, THER EFORE, THE ORDER PASSED BY THE CIT(A) IS NOT JUSTIFIABLE. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE REVENUE HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE ORDER DATED 27.11.2015, WE NOTICED THAT THE APPEAL OF THE ASSESSEE HAS BEEN DEC IDED BY THE CIT(A) - 6 MUMBAI IN ABSENCE OF BOTH THE PARTIES ON 27.11.2015. THE LETTER OF REQUEST DATED 10.11.2015 IS ON RECORD IN WHICH IT IS SPECIFICALLY MENTIONED THAT THE ASSESSEE WAS SEEK ING ADJOURNMENT ON 12.11.2015 BECAUSE HIS ACCOUNTANT WAS ON LEAV E. THE OFFICE OF THE CIT(A) ENDORSED THE ADJOURNMENT DATED AS ON 10.12.2015 AT ABOUT 11.55 A.M WHEREAS THE APPEAL HAD ALREADY DECIDED ON 27.11.2015 . IT ALSO CAME INTO NOTICE THAT THE ENDORSED HAS BEEN RECORDED BY OFFICE OF THE CIT(A) - 5, MUMBAI WHEREAS THE MA TTER OF CONTROVERSY WAS ADJUDICATED BY THE CIT(A) - 6, MUMBAI. THE EXPLANATION RENDERED BY ASSESSEE SEEMS JUSTIFIABLE BECAUSE UNDER ITA. NO.337 /M/201 6 A.Y. 20 11 - 12 4 THESE CIRCUMSTANCES, THERE WAS NO INTENTION OF THE ASSESSEE TO AVOID THE PROCEEDING BEFORE THE CIT(A) . SINCE THE CIT(A) HAS DE CIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE REPRESENTATIVE OF THE ASSESSEE, THEREFORE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT(A) IN QUESTION IS NOT JUSTIFIABLE, THEREFORE, WE SET ASIDE THE SAME AND RESTORED THE ISSUES BEFORE THE CIT(A) T O DECIDE THE MATTER OF CONTROVERSY AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OP EN COURT ON 06. 07. 201 8 . SD/ - SD/ - ( R. C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 06. 07 . 201 8 . V IJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI