MADHAV STRUCTURAL ENGINEERING P. LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 349/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4055 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 15-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Assessee Lawyers: S C AGARWAL
• Keywords: Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN, AM AND PAWAN SINGH, JM ./ I.T.A. NO . 349 / MUM/ 201 4 ( / ASSESSMENT YEA R : 200 4 - 05 ) MADHAV STRUCTU RAL ENGINEERING LTD., 29/1 JUHU SUPREME SHOPPING CENTRE, 1 ST FLOOR, GULMOHAR CROSS - ROAD, JUHU, MUMBAI 400049. / VS. DY. COMMISSIONER OF INCOME TAX - 8 (2), 2 ND FLOOR, ROOM NO.216 A AAYAKAR BHAVAN, M K ROAD MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAACM3259L / APPELLANT BY SHRI S C AGARWAL / RESPONDENT BY SHRI NAVEEN GUPTA / DATE OF HEARING : 19 .1 . 201 6 / DATE OF PRONOUNCEMENT: 3. 2 . 201 6 / O R D E R P ER B R BASKARAN, AM : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.11.2013 PASSED BY THE LD.CIT ( A) - 17, MUMBAI AND IT RELATES TO THE ASSESSME NT YEAR 2004 - 05. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD.CIT(A) IN REJECTING THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE CLAIM OF THE APPELLANT IS PURELY ACADEMIC IN NATURE. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION RELATED TO INFRASTRUCTURE I.T.A. NO. 349 / MUM/ 201 4 2 PROJECT S SUCH AS CONSTRUCTION OF NEW ROADS, IMPROVEMENT OF EXISTING ROADS, LAYING OF PIPELINES FOR WATER SUPPLY AND S EWE GE DISPOSAL ETC. 4 . FOR THE YEAR UNDER CONSIDERATION, THE AS SESSEE FILED A RETURN OF INCOME DECLARING A LOSS OF RS.4.83 CRORES. SINCE THE ASSESSEE DID NOT RESPOND TO THE NOTICES ISSUED BY THE AO , THE AO COMPLETED THE ASSESSMENT TO THE BE S T OF HIS JUDGMENT BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE AS NIL, MEAN ING THEREBY, THE AO DISALLOWED THE ENTIRE AMOUNT OF LOSS DECLARED BY THE ASSESSEE . 5 . IN THE APPELLATE PROCEEDINGS, THE LD.CIT(A) NOTICED THAT THE ASSESSEE HAS CONTINUED TO INCUR LOSSES IN THE SUBSEQUENT YEARS ALSO AND ACCORDINGLY TOOK THE VIEW THAT THE ADJUDICATION OF THE APPEAL OF THE ASSESSEE WOULD BE AN ACADEMIC EXERCISE. ACCORDINGLY, HE DISMISSED THE APPEAL FILED BY THE ASSESSEE. 6 . THE CONTENTION OF THE ASSESSEE IS THAT IT HA D WON A CONTRACT FROM MAHARASHTRA STATE ROAD DEVELOPMENT CORPORATION (MSR DC) FOR IMPROVEMENT OF CERTAIN EXISTING ROADS. SINCE THE ASSESSEE GOT SUCH A KIND OF BIG CONTRACT FOR THE FIRST TIME , IT HAD INVESTED A SUM OF RS.2 .00 CRORES IN PURCHASING MACHINERY AND IT ALSO AVAILED A LOAN OF RS.4 .00 CRORES FROM BANKS . HOWEVER, DUE T O CERTAIN OPERATION AL DIFFICULTIES, THE ASSESSEE COULD NOT COMPLETE THE CONTRACT IN TIME AND THE WORK ALREADY EXECUTED WAS ALSO FOUND TO BE BELOW THE ACCEPTED STANDARD S . HENCE , MSRDC TERMINATED THE WORK ORDER AND THE ASSESSEE HAD TO PURSUE THE MATTER WITH THEM. SINCE THE TERMINATION OF THE CONTRACT RESULT ED IN HUGE LOSS TO THE ASSESSEE, THE LD.AR SUBMITTED THAT THE ASSESSEE COULD NOT CO - OPERATE WITH THE AO, SINCE IT WAS INVOLVED IN LITIGATION WITH MSRDC. ACCORDINGLY, THE LD. AR PRAYED THAT THE ASSESSEE S HOULD BE PROVIDED ONE MORE OPPORTUNITY TO PRODUCE ALL THE DETAILS BEFORE THE AO. I.T.A. NO. 349 / MUM/ 201 4 3 7 . THE LD. DR DID NOT OBJECT TO THE PLEA RAISED BY THE LD.AR. 8 . HAVING HEARD THE RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THERE WAS A REASONABLE CAUSE FOR THE ASSESSEE IN NOT CO - OPERATING WITH THE AO. FURTHER, WE HAVE ALSO NOTICE D THAT THE LD.CIT(A) HAS NOT ADJUDICATED THE ISSUE ON MERITS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT ALL THE ISSUES REQUIRE FRESH EXAMINATION AT THE END OF THE AO . ACCORDINGLY, WE SET ASIDE THE ORDER OF LD.CIT(A) AND RESTORE ALL THE ISSUE TO THE FILE OF THE AO FOR CONSIDERING THEM AFRESH. THE ASSESSEE IS ALSO DIRECTED TO EXTEND FULL COOPERATION TO THE ASSESSING OFFICER BY PROVIDING ALL THE INFORMATION AND EXPLANATIONS THAT MAY BE CALL ED FOR BY HIM. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED ACCORDINGLY ON 3RD FEB , 2 01 6 . 3RD FEB, 2 01 6 SD SD ( PAWAN SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 3RD FEB , 2 01 6 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDE NT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. I.T.A. NO. 349 / MUM/ 201 4 4 / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI