ALLIED ASIA GEARS LTD, MUMBAI V. ITO 8(1)(3), MUMBAI

ITA 3633/MUM/2010

• Counselvise Citation: 363319914 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIM KUMAR MODI
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI G.E. VEERABHADRAPPA, PRESIDENT AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.3633/MUM/2010 (ASSESSMENT YEAR: 2006-07) ALLIED ASIA GEARS LIMITED, FLAT NO.02, OM NATRAJ BUILDING, BEHIND BOON BON, 7 BUNGLOWS, JUHU VERSOVA LINK ROAD END. ANDHERI (WEST), MUMBAI -400 053 ...... APPELLANT VS ITO-8(1)(3), MUMBAI ..... RESPONDENT PAN: AADCA 3112 B APPELLANT BY: SHRI RONAK G. DOSHI RESPONDENT BY: SHRI ASHIM KUMAR MODI DATE OF HEARING: 30.11.2011 DATE OF PRONOUNCEMENT: 23.01.2012 O R D E R PER R.S. PADVEKAR, JM : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT (A)-16, MUMBAI DATED 03.03.201 0 FOR THE A.Y. 2006-07. THE ASSESSEE HAS TAKEN THE MULTIPLE GROUN DS. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT PROPER OPPORTUNIT Y HAS NOT BEEN GIVEN BY BOTH THE AUTHORITIES BELOW TO REPRESENT TH E CASE. THE ASSESSEE WAS ALSO PREVENTED FOR FILING THE REQUIRED DETAILS BEFORE THE A.O. FOR THE REASONS STATED IN THE AFFIDAVIT. THE ASSESSEE TRIED TO FILE THE DETAILS / DOCUMENTS BEFORE THE LD. CIT (A) BUT THE SAME WERE REJECTED ON THE REASON THAT THE ASSESSEE DID NOT FI LE THE SAME BEFORE THE A.O. 2. THE FACTS REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2006-07 ON 30.11.2006 DECLARING TOTAL LOSS OF ` (-) 1,18,478/-. THE SAID RETURN WAS SELECTED ITA 3633/M/2010 ALLIED ASIA GEARS LIMITED 2 FOR SCRUTINY AND ASSESSEE WAS SERVED WITH THE NOTIC E U/S.143(2) OF THE ACT. THE ASSESSEE IS ENGAGED IN THE MANUFACTURING OF AUTOMOTIVE GEARS. THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S.143(3) BY DETERMINING THE TOTAL INCOME OF ` 64,42,131/- AS AGAINST THE LOSS DECLARED BY MAKING THE FOLLOWING ADDITIONS: (I) ADDITION U/S.68 - ` 11,27,200/- (II) DISALLOWANCE OF EXPENSES - ` 53,53,612/- (III) DISALLOWANCE U/S.2(22)(X) R.W.S. 36(1)(4) - ` 82,797/- ------------------ - ` 65,60,609/- ============ 3. THE MAIN REASON GIVEN FOR MAKING THE DISALLOWANC E OF EXPENSES AS WELL AS ADDITION U/S.68 IS THAT THE ASSESSEE DID NOT FURNISH THE REQUIRED EVIDENCES TO SUBSTANTIATE THE CLAIM OF EXP ENDITURE AS WELL AS TO PROVE THE GENUINENESS OF THE LOAN SHOWN IN THE B OOKS OF A/C. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A) AND SUCCEEDED TO GET THE PARTIAL RELIEF. THE ASSESSEE FILED THE DETAILS AS WELL AS OTHER EVIDENCES IN SUPPORT OF HIS CLAIM BEF ORE THE LD. CIT (A) BUT THE SAME WERE REJECTED BY GIVING REASON THAT TH E ASSESSEE HAS FAILED TO PROVE THAT THERE WAS ANY REASONABLE CAUSE FOR NOT FILING THE EVIDENCE BEFORE THE A.O. IN ASSESSMENT STAGE. NOW, THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER OF THE LD. CIT ( A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE LD. COUNSEL ARGUES THAT INITIALLY THE NOTICE U/S.143(2) WAS ISSUED TO THE ASSESSE-COMPANY BY THE ITO 8(1)(1), MUMBAI AND THEREAFTER, THE CASE WAS TRANSFERRED TO ITO 8(1)(3), MUMBAI. THE ITO VESTED WITH THE NEW JURISDICTION I SSUED THE FRESH NOTICE U/S.143(2) ON 12.11.2008 CALLING THE DETAILS FROM THE ASSESSEE. HE SUBMITTED THAT COMPANYS ACCOUNTANT SHRI NAGESH KUMAR MAHODAY APPEARED BEFORE THE A.O. ON 17.12.2008 AND FILED THE DETAILS, BUT, SOME OF THE DETAILS COULD NOT BE FILE D. THE A.O. WAS REQUESTED TIME UP TO 22.12.2008 FOR FILING THE DETA ILS. HE ARGUES THAT THE ASSESSE-COMPANY WAS INCURRING LOSSES AND REFERE NCE APPLICATION HAD BEEN MADE BEFORE BIFR AND BY ORDER DATED 21.08. 2006 BIFR ITA 3633/M/2010 ALLIED ASIA GEARS LIMITED 3 DECLARED THE ASSESSE-COMPANY AS A SICK INDUSTRY. THE ASSESSEE COMPANY SHIFTED ITS OPERATION FROM MUMBAI TO INDORE AND HENCE, THE NOTICES ISSUED BY THE DEPARTMENT COULD NOT BE ATTEN DED. HE SUBMITS THAT THE ASSESSEE HAS FILED THE DETAILED AFFIDAVIT. HOW THE DETAILS COULD NOT BE FILED BEFORE THE A.O.? HE PLEADED THA T THE ENTIRE MATTER MAY BE SENT BACK TO THE A.O. WE HAVE ALSO HEARD TH E LD. D.R. 5. WE FIND THAT THE ASSESSEE DID NOT FILE THE REQU IRE DETAILS BEFORE THE A.O. AND HENCE, THE A.O. MADE HUGE DISALLOWANCE I.E. 50% OF THE EXPENSES CLAIMED AND MADE ADDITION OF ` 53,50,612/- IN RESPECT OF THE EXPENSES CLAIMED AND ` 11,27,200/- TOWARDS CASH CREDIT U/S.68. THE ASSESSEE FILED THE DETAILS BEFORE THE LD. CIT ( A) AND SAME IS CLEAR FROM HIS ORDER BUT LD. CIT (A) DECLINED TO ADMIT TH E EVIDENCES FILED BY THE ASSESSEE BY GIVING THE REASON THAT THE ASSESSEE COULD NOT PROVE HOW HE WAS PREVENTED BEFORE THE A.O. TO FILE THE DE TAILS. THE ASSESSEE HAS FILED THE AFFIDAVIT WHICH WE HAVE PERUSED. THE ASSESSEE IS DECLARED AS SICK INDUSTRY BY BIFR AND THIS IS NOT CONTROVERTED BY THE DEPARTMENT. THE ASSESSEE SHIFTED ITS ADMINISTRATIV E OFFICE FROM MUMBAI TO INDORE. MOREOVER, WE FIND THAT THE ASSES SEE FILED THE DETAILS BEFORE THE LD. CIT (A) WHO DECLINED TO ADMI T THE SAME. IN OUR OPINION, IN THE INTEREST OF THE ADVANCEMENT OF JUST ICE THE LD. CIT (A) SHOULD HAVE ADMITTED THE EVIDENCE. MOREOVER, THE A .O. HAS ALSO MADE THE HIGH PITCH ASSESSMENT HAVING NO BASIS. UNDER T HE CIRCUMSTANCES, WE CONSIDER IT FIT TO ADMIT ALL THE EVIDENCES FILED BEFORE US BY THE ASSESSEE PAGE NOS.18 TO 364 IN THE PAPER BOOK AND R EMIT THE MATTER BACK TO THE A.O. FOR COMPLETING THE ASSESSMENT WITH THE DUE PROCESS OF LAW. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERAT E WITH THE A.O. FOR THE EARLIER COMPLETION OF THE ASSESSMENT AND SHOULD NOT SEEK UNNECESSARILY ADJOURNMENTS. ACCORDINGLY, THE ORDER OF THE CIT (A) IS SET ASIDE AND ENTIRE MATTER IS RESTORED TO THE FILE OF THE A.O. NEEDLESS TO SAY THE A.O. SHOULD GIVE REASONABLE OPPORTUNITY OF BEING HEAR TO THE ASSESSEE. THE ASSESSEE ALSO SHOULD FILE ITS ADDRE SS BEFORE THE A.O. FOR SERVICE OF THE NOTICE WITHIN ONE MONTH FROM THE DAT E OF RECEIPT OF THIS ORDER. ITA 3633/M/2010 ALLIED ASIA GEARS LIMITED 4 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 25TH JANUARY, 2012 SD/- ( G.E. VEERABHADRAPPA ) PRESIDENT SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 25TH JANUARY, 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-16, MUMBAI. 4) THE CIT- VIII, MUMBAI. 5) THE D.R. A BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN