MADHAVI S. LAD, MUMBAI V. ITO 20(2)(2), MUMBAI

ITA 3448/MUM/2012

• Counselvise Citation: 344819914 RSA 2012
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 15-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO 3448/MUM/2012 ASSESSMENT YEAR: - 2007-08 MRS. MADHAVI S. LAD 6C, SWAMI VIVEKANAND CO-OP HSG. SOC, AZAD NAGAR NO. 3, VEERA DESAI ROAD, ANDHERI (W) MUMBAI - 400 058. VS.` ITO 20(20(2), MUMBAI. PAN/GIR NO. AABFM7783R APPELLANT RESPONDENT ORDER PER G.S. PANNU, AM THE CAPTIONED APPEAL PREFERRED BY THE ASSESSEE IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREIN AFTER REFERRED TO AS THE CIT(A)] DATED 09.03.2012 WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS THE ACT) DATED 15.12.2009 PERTAINING TO ASSESSMENT YEAR 2007-08. ASSESSEE BY SHRI JEETENDRA SINGH REVENUE BY SHRI YOGESH KAMAT DATE OF HEARING 19.05.2015 DATE OF PRONOUNCEMENT 29.5.2015 2 ITA NO 3448/MUM/2012 ASSESSMENT YEAR 2007-08 PAGE 2 OF 6 IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWING G ROUNDS OF APPEAL. 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXX I, MUMBAI [HEREINAFTER REFERRED TO AS 'LD. CIT(A)'] ERRED IN PASSING THE ORDER DATE D 09.03.2012 CONFIRMING THE ASSESSMENT ORDER DATED 15.12.2009 IN WHICH TO TAL INCOME WAS DETERMINED AT. RS.22,78,606/- AS AGAINST THE RETURNED INCOME OF RS .7,13,870/- BY DISALLOWING THE FOLLOWING BY REJECTING THE BOOK RESULTS IN AN ARBITRARY MANNER: SR. NO. PARTICULARS AMOUNT (RS.) A DISALLOWANCE OF SET OFF AND CARRY FORWARD OF CURRENT YEAR LOSSES 15,64,733 B DISALLOWANCE OF SET OFF AND CARRY FORWARD OF THE CARRY FORWARD LOSSES 29,54,782 A DISALLOWANCE OF SET OFF AND CARRY FORWARD OF CUR RENT YEAR LOSSES RS. 15,64,733/- 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE LD. A.O. IN REJECTING THE BOOK RESULTS AND DETERMINING THE INCOME FROM PROPRIE TARY CONCERN M/S MEGHANA FISHERIES AT NIL DISALLOWING SET OFF AND CARRY FORW ARD TO THE LOSSES AMOUNTING TO RS. 15.64.733/-, WITHOUT APPRECIATING THE FACTS AND CIR CUMSTANCES OF THE CASE. B. DISALLOWANCE OF SET OFF AND CARRY FORWARD OF THE CARRY FORWARD LOSSES RS. 29,54,782/- 3. THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE LD. A.O. IN NOT GRANTING SET OFF AND CARRY FORWARD OF THE LOSSES AMOUNTING TO RS . 29,54,782/- WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE APPELLANT DENIES ANY LIABILITY TO PAY INTERES T UNDER SECTION 234B. HENCE, THE SAME IS NOT LEVIABLE. 2. THE APPELLANT BEFORE US IS AN INDIVIDUAL WHO FILE D A RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08, DECLARING AN INCOME OF RS. 7,13,870/-, WHEREAS IN THE ASSESSMENT FINALIZED U/S 143(3) OF THE ACT, THE ASSE SSING OFFICER DETERMINED THE TOTAL INCOME AT RS. 22,78,610/-, AGAINST SUCH ASSES SMENT, ASSESSEE WAS AGGRIEVED ON VARIOUS GROUNDS. FIRSTLY THE ASSESSEE HAD DECLARED A LOSS OF RS. 15,64,733/- FROM THE 3 ITA NO 3448/MUM/2012 ASSESSMENT YEAR 2007-08 PAGE 3 OF 6 BUSINESS OF PRAWNS CARRIED OUT IN HER PROPRIETARY CO NCERN M/S MEGHANA FISHERIES. THE ASSESSING OFFICER DETERMINED THE INCOME OF PROP RIETARY CONCERN M/S MEGHANA FISHERIES AT NIL AS AGAINST THE LOSS OF RS. 15,64,7 33/- DECLARED BY THE ASSESSEE. SECONDLY, THE ASSESSING OFFICER DID NOT PERMIT CARR Y FORWARD OF LOSSES BROUGHT FORWARD FROM PAST YEARS AMOUNTING TO RS. 29,54,782/ -, WHICH PERTAINED TO M/S MEGHANA FISHERIES. BOTH THE AFORESAID GRIEVANCES WE RE UNSUCCESSFULLY CARRIED BY THE ASSESSEE IN APPEAL TO THE CIT(A). THE CIT(A) DI SMISSED THE PLEA OF THE ASSESSEE BY NOTICING THAT SIMILAR DISPUTE IN THE CASE OF THE ASSESSEE FOR PRECEDING ASSESSMENT YEAR OF 2006-07 WAS DECIDED BY HIM AGAINST THE ASSES SEE. IN THIS BACKGROUND, ASSESSEE IS IN APPEAL BEFORE US ON THE AFORESTATED GROUNDS OF APPEAL. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER REJECTED THE BOOKS OF AC COUNT MAINTAINED WITH REGARD TO THE BUSINESS CARRIED ON IN THE PROPRIETARY CONCERN, M/S MEGHANA FISHERIES AND ACCORDINGLY HE ASSESSED THE INCOME AT NIL INSTEAD OF THE RETURNED LOSS OF RS. 15,64,733/-. IT WAS FURTHER POINTED OUT THAT FOR AS SESSMENT YEAR 2006-07, SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL AND VIDE ORDER IN ITA NO. 1718/MUM/2011 DATED 13.10.2014, THE MATTER WAS REMANDED BACK TO TH E FILE OF THE ASSESSING OFFICER FOR EXAMINATION AFRESH. IT WAS ASSERTED THAT THE FA CTS AND CIRCUMSTANCES IN THE INSTANT ASSESSMENT YEAR ARE SIMILAR TO THOSE IN ASS ESSMENT YEAR 2006-07 CONSIDERED BY THE TRIBUNAL. 4. THE AFORESAID FACTUAL MATRIX IS NOT DISPUTED BY T HE LD. DR APPEARING FOR THE REVENUE. WE FIND THAT THE TRIBUNAL IN ITS ORDER DATE D 13.10.2014 (SUPRA), HAS ADJUDICATED A SIMILAR ISSUE IN THE FOLLOWING MANNER :- 4 ITA NO 3448/MUM/2012 ASSESSMENT YEAR 2007-08 PAGE 4 OF 6 WE NOTICE THAT THE TAX AUTHORITIES HAVE MADE GENER AL OBSERVATIONS WITHOUT POINTING OUT THE SPECIFIC FAILURE, IF ANY, ON THE P ART OF THE ASSESSEE IN FURNISHING THE DETAILS THAT WERE CALLED FOR. THOUGH THE LD CIT(A) HAS REFERRED TO THE COMMENTS MADE BY THE SPECIAL AUDITOR THAT THE ASSESSEE DID NOT MA INTAIN PROPER RECORDS OF, THE MANUFACTURING ACTIVITY VIZ., DELIVERY CHALLANS, SAL ES/PURCHASE RECORDS, RECORD FOR PURCHASE OF PRAWN SEEDS, RECORD FOR DEATH OF PRAWNS , PRODUCTION AT DIFFERENT STAGES OF CULTURE ETC . YET THERE IS NO REFERENCE TO THE EXPL ANATIONS FURNISHED BY THE ASSESSEE AND THE VALIDITY/VERACITY OR ACCEPTABILITY OF THOSE EXPL ANATIONS. ACCORDING TO LD A.R, THE ASSESSEE HAS FURNISHED ALL THE DETAILS THAT WERE CA LLED FOR BY THE SPECIAL AUDITOR AND VERY SAME DETAILS WERE ALSO FURNISHED TO THE ASSESS ING OFFICER. THIS STATEMENT MADE BY LD A. R IS TOTALLY IN CONTRADICTION TO THE OBSERVAT IONS MADE BY THE TAX AUTHORITIES. IN OUR VIEW, THE EXPLANATIONS OF THE ASSESSEE SHOULD BE EXAMINED IN THE LIGHT OF PECULIARITIES ATTACHED TO THE PRAWN CULTURE BUSINES S, WHEREIN NO STRICT STANDARDS COULD BE PRESCRIBED AND FURTHER IT WOULD DEPEND UPON THE NA TURE OF DISEASES AFFLICTING THE PRAWNS THAT WERE GROWN. 6. ACCORDING TO LD A.R, THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE, WHICH MAY W ARRANT ITS REJECTION. WE FIND FORCE IN THE SAID CONTENTIONS, SINCE THE SPECIFIC FAILURE ON THE PART OF THE ASSESSEE HAS NOT BEEN POINTED OUT. BEFORE REJECTING THE BOOKS OF ACCOU NT. IN OUR VIEW, THE ASSESSING OFFICER SHOULD EXAMINE THEM AND POINT OUT THE DEFIC IENCIES, WHICH IS ABSENT IN THE PRESENT CASE. IN THE CASES LIKE THE PRESENT ONE, TH E PECULIARITIES OF THE BUSINESS ALSO NEEDS TO BE KEPT IN MIND. HENCE, IN OUR VIEW, THIS I SSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE S ET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASS ESSING OFFICER WITH THE DIRECTION TO EXAMINE THIS ISSUE AFRESH BY DULY CONSIDERING THE BO OKS OF ACCOUNTS AND EXPLANATIONS OF THE ASSESSEE AND THEN TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE DETAIL S THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER AND EXTEND FULL CO-OPERATION IN F INALIZING THE ASSESSMENT. 5. FOLLOWING THE AFORESAID DECISION IN THE ASSESSEE S OWN CASE, WHICH HAS BEEN RENDERED IN IDENTICAL CIRCUMSTANCES, WE DEEM IT FIT AND PROPER TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO REVISIT THE ISSUE KEEPING IN MIND THE DISCUSSION CONTAINED IN THE ORDER OF THE T RIBUNAL FOR ASSESSMENT YEAR 2006-07 (SUPRA). NEEDLESS TO SAY, THE ASSESSING OFF ICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD BEFORE PASSING AN ORDER AFRESH ON THIS ASPECT AS PER LAW. 5 ITA NO 3448/MUM/2012 ASSESSMENT YEAR 2007-08 PAGE 5 OF 6 6. THE ONLY OTHER ASPECT WHICH REMAINS FOR CONSIDER ATION IS DENIAL OF CARRY FORWARD OF THE BROUGHT FORWARD BUSINESS LOSSES PERTAI NING TO M/S MEGHANA FISHERIES OF RS. 29,54,782/-. THIS ISSUE IS ALSO LI ABLE TO BE REVISITED BY THE ASSESSING OFFICER AFTER HIS DECISION IN THE ASSESSMENT YEAR 2 006-07, WHICH HAS BEEN REMANDED BACK TO HIM BY THE TRIBUNAL IN ITS ORDER DATED 13.10.2 014 (SUPRA). NEEDLESS TO MENTION, THE ASSESSING OFFICER SHALL ALLOW THE ASSE SSEE A REASONABLE OPPORTUNITY OF BEING HEARD BEFORE PASSING AN ORDER AFRESH ON THIS AS PECT AS PER LAW. 7. THE LAST ISSUE RAISED BY THE APPELLANT IS WITH R EGARD TO LEVY OF INTEREST U/S 234B OF THE ACT, WHICH IS CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC FINDING. 8.. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY 2015. SD/- SD/- (SANJAY GARG) (G.S. PANNU) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER ) MUMBAI DATED 29-05-2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, B BENCH, ITAT, MUMBAI 6 ITA NO 3448/MUM/2012 ASSESSMENT YEAR 2007-08 PAGE 6 OF 6 BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI