EXCELSIOR DESIGN & PROJECTS CONSOLIDATED P.LTD, MUMBAI V. ACIT 8(1), MUMBAI

ITA 3401/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49322 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2001-2002
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Assessee Lawyers: K SHIVARAM MR RAHUL K HAKANI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M. JAGTAP, A.M. AND SHRI V. DURGA RAO , J.M. ITA NOS. 3401 & 3402/MUM/2010 ASSESSMENT YEAR: 2001-02 EXCELSIOR DESIGN & PROJECTS CONSOLIDATED PVT. LTD. APPELLANT A-202, KAILASH TOWER SOCIETY, N.S. PHADKE ROAD, WESTERS EXPRESS HIGHWAY, ANDHERI-EAST, MUMBAI 400 069. VS. ASSTT. COMMISSIONER OF INCOME-TAX, RESPONDENT 8(1), AAYAKAR BHAVAN, MUMBAI. APPELLANT BY : MR. K. SHIVARAM/ MR. RAHUL K. HAKANI RESPONDENT BY : MR. G.P. TRIVEDI . ORDER PER V. DURGA RAO, J.M.: BOTH THESE APPEALS PERTAIN TO SAME ASSESSEE ARE DI RECTED AGAINST THE ORDERS OF CIT(A)-16, MUMBAI, FOR THE AS SESSMENT YEAR 2001-02. ITA NO. 3401/MUM/2010 2. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF CIT (A)-16, DATED 23/02/2010 WHEREIN THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL:- GROUND OF APPEAL NO. (1): ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE HON.BLE CIT(A) FAILED TO CONSIDER THAT THE NON-ATT ENDANCE ON THE VARIOUS DATES OF HEARING OF THE SET ASIDE ASSESSMEN T WAS ENTIRELY THE FAULT OF THE APPELLANTS COUNSEL AND THAT DURIN G THE APPELLATE ITA NOS. 3401 & 3402/M/2010 EXCELSIOR DESIGN & PROJECTS PVT. LTD. 2 PROCEEDING THE APPELLANTS COUNSEL HAD FILED AN AFF IDAVIT FOR CONFIRMING THE SAID FACT. GROUND OF APPEAL NO. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN MAK ING THE ASSESSMENT ORDER U/S 144 OF THE ACT. WITHOUT PREJUDICE TO THE AFORESAID GROUNDS OF APPEA L GROUND OF APPEAL NO. (3): ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A) FAILED TO UNDERSTAND THAT THE APPELLANTS HAD SUBMIT TED VARIOUS DETAILS RELATED TO THE IMPUGNED ASSESSMENT IN THE A PPELLATE PROCEEDINGS BEFORE ITAT IN ITA NO. 2555/M/2008, WHI CH WAS DECIDED ON 21/02/08. 3. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDIT IONAL GROUNDS OF APPEAL:- 1. THE LEARNED CIT(A) ERRED IN NOT ADMITTING AND CO NSIDERING VOLUMINOUS EVIDENCE FILED BEFORE HIM FROM TIME TO T IME. IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(A) OUGHT TO HAVE ADMITTED THE SAID EVID ENCE AS ADDITIONAL EVIDENCE. THE LEARNED CIT(A) ALSO ERRED IN NOT APPRECIATING THAT THE CA OF THE APPELLANT HAD INDEE D ATTENDED THE PROCEEDINGS FROM TIME TO TIME. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADDITI ON OF RS. 10,33,967/- IN RESPECT OF HYPOTHETICAL/NOTIONAL INT EREST ON THE FOOTING THAT INTEREST BEARING FUNDS WERE INVESTED I N SHARES WHICH WOULD YIELD TAX FREE DIVIDEND INCOME. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWA NCE OF ERECTION CHARGES OF RS. 5,69,210/-. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING A HUGE AD DITION OF RS. 45,58,481/- IN RESPECT OF CREDIT BALANCE OF M/S KAL PANA ENTERPRISES, A CREDITOR AND A REGULAR SUPPLIER TO T HE APPELLANT COMPANY. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME ON 31/10/2001, DECLARING TOTAL LOSS OF R S. (-) 41,20,913/-, WHICH WAS PROCESSED AND SELECTED FOR REGULAR SCRUTI NY AND ASSESSMENT U/S 143(3) OF THE ACT WAS MADE ON 18/03/ 2004 ITA NOS. 3401 & 3402/M/2010 EXCELSIOR DESIGN & PROJECTS PVT. LTD. 3 DETERMINING TAXABLE INCOME AT RS. 62,33,854/-. AGGR IEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A) AND THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. STILL AG GRIEVED THE ASSESSEE FILED APPEAL BEFORE THE ITAT. THE ITAT SET ASIDE TH E ORDER OF THE CIT(A) AND REMITTED THE MATTER BACK TO THE FILE OF THE AO FOR THE REASON THAT CERTAIN DETAILS WHICH WERE FURNISHED BEFORE THE CIT (A) WERE NOT GIVEN TO THE AO. AS PER THE DIRECTIONS OF THE ITAT, THE A O ISSUED NOTICE U/S 142(1) DATED 24/11/2008. SINCE THE ASSESSEE FAILED TO COMPLY WITH THE SAID NOTICE, THE AO CONCLUDED THAT THE ASESSSEE IS NOT SERIOUSLY INTERESTED TO PURSUE THE PRESENT PROCEEDING, HENCE , HE CONCLUDED THAT IN ABSENCE OF ANY FRESH DOCUMENTS THE CLAIM OF THE ASSESEE CANNOT BE SUSTAINED. AGGRIEVED, THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE CIT(A). SINCE THE ASSESSEE FAILED TO APPEAR BEFORE THE CIT(A), THE CIT(A) PASSED AN EX-PARTE ORDER BY HOLDING THAT THE AO HAS RIGHTLY PASSED ORDER U/S 144 AFTER ALLOWING SUF FICIENT TIME TO THE ASSESSEE. AGAINST THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE PRELIMINARY CONTENTION OF T HE ASSESSEE IS THAT THE REVENUE AUTHORITIES HAVE NOT GIVEN SUFFICIENT O PPORTUNITY TO PRESENT ITS CASE BEFORE THEM. T HE REASONS FOR NOT ATTENDING THE HEARING OF ITS CASE BEFORE THE REVENUE AUTHORITIES HAVE BEEN MENTIONED IN THE AFFIDAVIT FILED BEFORE US. THEREFO RE, THE SUBMISSION OF THE LEARNED COUNSEL BEFORE US IS THAT MATTER MAY BE REMITTED BACK TO THE FILE OF THE AO TO PRESENT AND ARGUE THE ASSESSE ES CASE ON MERIT. AFTER CONSIDERING THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE ORDER OF CIT(A) NEEDS TO BE SET ASIDE AND THE CASE IS REQUIRED TO BE RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUES ON MERIT AND IN ACCORDANCE WITH L AW, AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN TH E MATTER. THE ASSESSEE IS ALSO DIRECTED TO EXTEND ALL THE CO-OPER ATION AND COMPLY ITA NOS. 3401 & 3402/M/2010 EXCELSIOR DESIGN & PROJECTS PVT. LTD. 4 WITH THE REQUIREMENTS OF THE AO FOR THE PURPOSE OF COMPLETING THE ASSESSMENT AFRESH. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 3402/MUM/10 7. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF CIT (A)-16, DATED 23/02/2010. 8. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME ON 31/10/2001 DECLARING LOSS OF RS. 41,20 ,913/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DETE RMINING TOTAL INCOME AT RS. 62,33,854/- BY MAKING VARIOUS ADDITIO NS. ON APPEAL, THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESS EE. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE ITAT AND TH E ITAT RESTORED THE MATTER TO THE FILE OF THE AO TO DECIDE AFRESH THE I SSUES. AS PER THE DIRECTIONS OF THE ITAT, THE AO ISSUED THE NOTICE U/ S 142(1), WHICH WAS NOT COMPLIED WITH BY THE ASSESSEE, THEREFORE, THE A O SUSTAINED THE ORIGINAL ADDITIONS. THEREAFTER, THE AO INITIATED PE NALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASS ESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND HE LEVIED A MINIMUM PENALTY OF RS. 33,40,244/-. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO. THE ASSESSEE IS AGGRIEVED AND FILED APPE AL BEFORE ITAT. 9. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WHILE DISPOSING OF THE QUANTUM APPEAL, WE HAVE RESTORED THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUES ON MERIT AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE VIDE ITA NO. 3401/MUM/10 (SUPRA). SINCE THE ASSESSM ENT ORIGINALLY MADE BY THE AO ITSELF HAS BEEN SET ASIDE BY US, THE PENALTY IMPOSED BY THE AO DOES NOT HAVE ANY LEGS TO STAND. THE SAME IS, THEREFORE, ITA NOS. 3401 & 3402/M/2010 EXCELSIOR DESIGN & PROJECTS PVT. LTD. 5 CANCELLED ALLOWING THE APPEAL OF THE ASSESSEE. THE AO, HOWEVER, WILL BE FREE TO IMPOSE PENALTY CONSEQUENT TO THE FRESH A SSESSMENT IN ACCORDANCE WITH LAW. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 11. TO SUM UP, ITA NO. 3401/MUM/10 IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES AND ITA NO. 3402/MUM/10 IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JUNE, 2011. SD/- SD/- (P.M. JAGTAP) (V. DURG A RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 24 TH JUNE, 2011 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, E BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.