Precision Equipment (Chennai) Private Ltd, , Chennai V. ITO, Corporate Ward -5(2), Chennai

ITA 34/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2303 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 03-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MATHIVANAN ACIT
• Assessee Lawyers: K RAVI
• Keywords: Principle of natural justice; Commercial expediency
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.34/CHNY/2018 ( / ASSESSMENT YEAR: 2014-15) M/S.PRECISION EQUIPMENTS- (CHENNAI) PVT. LTD., NO.26, MOUNT POONAMALLEE ROAD, NANDAMBAKKAM, CHENNAI-600 089. VS THE INCOME TAX OFFICER, CORPORATE WARD-5(2), CHENNAI. PAN: AABCP 3452 H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.K.RAVI, ADVOCATE / RESPONDENT BY : MR.M.MATHIVANAN, ACIT /DATE OF HEARING : 28.06.2018 /DATE OF PRONOUNCEMENT : 30.08.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, CHENNAI, DATED 27.10.2017 IN ITA NO.202/2016-17/CIT(A)-3 FOR THE ASSESSMENT YEAR 2014-15 PASSED U/S.250(6) R.W.S. 143(3) OF THE ACT. 2 ITA NO.34/CHNY/201 8 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE AND AGAINST PRINCIPLES OF NATURAL JUSTICE.THE LEARNED CIT (APPEALS) ERRED IN DISMISSING THE APPEAL WITHOUT CONSIDERING THE WRITTEN SUBMISSION FILED BY THE APPELLANT. 2 DISALLOWANCE U/S 40A (3) THE LEARNED ASSESSING OFFICER ERRED IN MAKING ADDITION U/S 40A (3) IN THE LIGHT OF THE FACT THAT NO ADDITION COULD BE MADE WHEN THE EXPENDITURE IS BONAFIDE .COMMERCIAL EXPEDIENCY AND ALLOWABLE ON PLAIN READING OF MAIN PROVISION OF SECTION 40 (A) (3) 1. DISALLOWANCE OF EXPENSES ON ADHOC BASIS MADE WITHOUT ENQUIRY THE LEARNED ASSESSING OFFICER ERRED IN MAKING ARBITRARY ADHOC ADDITION OF 20 % EXPENSES MAKING ASSAULT ON SECTION 143 (3) WITHOUT CAUSING ANY ENQUIRY/MATERIALS PROPELLED BY SUSPICION, SURMISES AND CONJECTURES WHICH IS NOT PERMISSIBLE IN LAW; 2. THE LEARNED ASSESSING OFFICER CANNOT TAKE OF HIS OWN WRONG IN MAKING ASSESSMENT AT THE FAG END OF THE ASSESSMENT YEAR AND WANT OF TIME FOR MAKING ENQUIRY, SHOULD NOT RESULT IN MAKING ADDITION FOR THE SAKE OF ADDITION. 3. THE LEARNED ASSESSING OFFICER ERRED IN CHARGING INTEREST U/S 234A.3\234B AND 234C OF THE INCOME TAX ACT 4. THE APPELLANT CRAVES LEAVE TO FILE ADDITION GROUNDS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF HEAT EXCHANGERS, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ELECTRONICALLY ON 25.11.2014. THE CASE WAS SELECTED FOR 3 ITA NO.34/CHNY/201 8 SCRUTINY UNDER CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 03.09.2015 AND FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 27.12.2016 WHEREIN THE LD.AO MADE SEVERAL ADDITIONS. 4. AT THE OUTSET, THE LD.AR SUBMITTED BEFORE US THAT DUE TO UNAVOIDABLE CIRCUMSTANCES HE COULD NOT APPEAR BEFORE THE LD.CIT(A) WHEN THE APPEAL CAME UP FOR HEARING AND THEREFORE THE LD.CIT(A) HAD PASSED AN EX-PARTY ORDER DISMISSING THE APPEAL OF THE ASSESSEE INLIMINE . IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.CIT(A) THEREBY PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. THE LD.DR ON THE OTHER HAND VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE LD.AR AND PRAYED FOR CONFIRMING THE ORDERS OF THE LD.REVENUE AUTHORITIES. 5. AFTER HEARING BOTH SIDES, WE DO NOT FIND MERIT IN THE ARGUMENTS ADVANCED BY THE LD.AR. HOWEVER IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD.CIT(A) FOR DE-NOVA CONSIDERATION. WE ALSO HEREBY DIRECT THE ASSESSEE AND HIS COUNSEL TO CO-OPERATE BEFORE THE LD.REVENUE AUTHORITIES PROMPTLY IN ORDER TO EXPEDITE THEIR PROCEEDINGS, FAILING WHICH THEY SHALL BE AT LIBERTY 4 ITA NO.34/CHNY/201 8 TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW BASED ON THE MATERIALS ON RECORD. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED ON THE 30 TH AUGUST, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 30 TH AUGUST, 2018 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF