ALFA ERECTORS P. LTD, MUMBAI V. ITO 8(1)(4), MUMBAI

ITA 3717/MUM/2011

• Counselvise Citation: 371719914 RSA 2011
• Duration Of Justice: 4 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 69C; 143(3); 133(6); 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 3717/MUM/2011 (ASSESSMENT YEAR : 2007-08) ALFA ERECTORS PRIVATE LIMITED, SUKH SAGAR, PLOT NO.10, 4 TH GULMOHAR CROSS ROAD, VILE PARLE(W), MUMBAI 400 049 PAN: AAGCA 1622F ... APPELLANT VS. THE ITO 8(1)(4), 260, AAYAKAR BHAWAN, MUMBAI 400020 .... RESPONDENT APPELLANT BY : SHRI NISHIT GANDHI REVENUE BY : SHRI A.K.KARDAM DATE OF HEARING : 29/09/2015 DATE OF PRONOUNCEMENT : 29/09/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-16, MUMBAI DATED 1 8/02/2011 PERTAINING TO THE ASSESSMENT YEAR 2007-08, WHICH I N TURN HAS ARISEN OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER DATED3 1/12/2009 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2 ITA NO. 3717/MUM/2011 (ASSESSMENT YEAR : 2007-08) 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL:- 1. PRINCIPLES OF NATURAL JUSTICE 1.1 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) - 16, MUMBAI, ['THE ID. CIT (A)'] ERRED IN PASSING THE APPELLATE ORDER AND MAKING FURTHER ENHANCEMENTS TO THE INCOME OF THE APPELLANT WITHOUT GIVING PROPER, EFFECTIVE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 1.2 IT IS SUBMITTED THAT THE APPELLATE ORDER SO PA SSED BY THE ID. CIT (A) IS BAD, ILLEGAL AND UNCALLED FOR, INASMUCH AS THE SAME IS PASSED IN GROSS BREACH OF THE PRINCIPLES OF NATURAL JUSTICE. WITHOUT PREJUDICE TO THE ABOVE : 2. RE: ENHANCEMENT 2.1 THE ID. CIT (A) ERRED IN ENHANCING THE INCOME OF THE APPELLANT OVER AND ABOVE THE INCOME ASSESSED BY THE A.O., FOR THE FOLL OWING ITEMS; (I) MAKING ADDITION OF RS.4,34,580/- U/S 69C OF TH E ACT ON ACCOUNT OF ALLEGED DIFFERENCE ARISING OUT OF PURCHASES MADE FR OM YASH INDUSTRIES (DAMAN); AND (II) MAKING DISALLOWANCE OF DONATION, AMOUNTING TO RS. 11,000/, U/S 80 G OF THE ACT. 2.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE, AND IN LAW, THE ENHANCEMENT OF THE ASSESSED INCOME IS BAD, ILLEGAL AND VOID, AS MANDATORY CONDITIONS FOR INITIATION AS WELL AS COMP LETION THEREOF WERE NOT FULFILLED. 2.3 WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT, IN ANY CASE: (I) THE PURCHASES MADE FROM M/S YASH INDUSTRIES WE RE PROPERLY AND FULLY RECORDED IN THE BOOKS OF THE APPELLANT AND WERE REC ONCILABLE WITH THE PURCHASES AS REPORTED BY M/S YASH INDUSTRIES IN RES PONSE TO NOTICE II] 133(6) OF THE ACT. (II) PROPER RECEIPTS EVIDENCING THE CHEQUE PAYMENT S OF DONATIONS TO THE TRUST THAT WAS ELIGIBLE XX] S 80G OF THE ACT WERE F ILED BY THE APPELLANT. 2.4 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, AND IN LAW, NO SUCH ACTIONS I ADDITIONS WERE CALLED FOR. WITHOUT FURTHER PREJUDICE TO THE ABOVE : 3. RE: ADDITION U/S 69C 3.1 THE ID. CIT (A) ERRED IN CONFIRMING THE ACTION OF THE INCOME TAX OFFICER - 8 (1) (4) ['THE A.O.'], WHEREBY THE A.O. HAD MADE A DDITION OF RS.22,30,743/- 3 ITA NO. 3717/MUM/2011 (ASSESSMENT YEAR : 2007-08) U/S 69C OF THE ACT, BEING THE ALLEGED DIFFERENCE ON ACCOUNT OF PURCHASES MADE FROM M/S HINDALCO INDUSTRIES. 3.2 WHILE DOING SO, THE ID. CIT (A) FAILED TO APPRE CIATE THAT THE APPELLANT HAD RECONCILED THE PURCHASES AS SHOWN IN THE BOOKS WITH THE PURCHASES AS REPORTED BY M/S HINDALCO INDUSTRIES IN RESPONSE TO NOTICE U/S 133 (6). 3.3 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMST ANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 4. RE: DISALLOWANCE U/S 40 (A) (IA): 4.1 THE ID. CIT (A) ERRED IN CONFIRMING THE ACTION OF THE A.O WHEREBY THE A.O. HAD DISALLOWED RS.64,318J- U/S 40(A)(IA) OF TH E ACT ON ACCOUNT OF NON- DEDUCTION OF TAX AT SOURCE. 4.2 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, AND IN LAW, NO SUCH DISALLOWANCE WAS CALLED FOR. 5. RE: DISALLOWANCE OF DEDUCTION CLAIMED U /S.80G 5.1 THE ID. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE A.O. IN NOT ALLOWING THE DEDUCTION OF RS. 22,000/- U/ S 80G OF THE ACT. 5.2 WHILE DOING SO, THE ID. CIT (A) FAILED TO APPRE CIATE THAT THE DONATIONS GIVEN BY THE APPELLANT WERE ELIGIBLE FOR DEDUCTION U/S 80G OF THE ACT AND WERE PROPERLY SUPPORTED BY DOCUMENTARY EVIDENCES. 5.3 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMST ANCES OF THE CASE, AND IN LAW, NO SUCH ACTION WAS CALLED FOR. 3. AT THE TIME OF HEARING , LD. REPRESENTATIVE APPEARING FOR THE ASSESSEE HAS VEHEMENTLY PRESSED THE GRIEVANCE IN G ROUND OF APPEAL NO.1, WHICH IS TO THE EFFECT THAT THE ORDER PASSED BY THE CIT(A) IS IN BREACH OF THE PRINCIPLES OF NATURAL JUSTICE. ON TH IS ASPECT, THE LD. REPRESENTATIVE APPEARING FOR THE ASSESSEE POINTED O UT THAT THE CIT(A) HAS PASSED THE ORDER WITHOUT GIVING APPROPRIATE AND EFFECTIVE OPPORTUNITY OF HEARING, IN AS MUCH AS ENHANCEMENT T O INCOME HAS ALSO BEEN MADE WITHOUT CONFRONTING THE ASSESSEE. ON THI S PRELIMINARY ASPECT, IT WAS SOUGHT TO BE CANVASSED THAT THE ORD ER OF THE CIT(A) BE SET ASIDE AND THE MATTER BE RESTORED BACK FOR ADJU DICATION AFRESH. 4 ITA NO. 3717/MUM/2011 (ASSESSMENT YEAR : 2007-08) 4. THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FO R THE REVENUE HAS NOT OPPOSED THE PRAYER OF THE ASSESSEE OF RESTO RING THE MATTER BACK TO THE FILE OF THE CIT(A) FOR ADJUDICATION AFRESH. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS ON THE A FORESAID PRELIMINARY ASPECT, WE FIND THAT THE CIT(A) HAS ENH ANCED THE INCOME WITHOUT AFFORDING AN APPROPRIATE OPPORTUNITY TO TH E ASSESSEE, AS IS SPECIFICALLY REQUIRED BY THE PROVISIONS OF SUB-SECT ION (2) OF SECTION 251 OF THE ACT. THUS, WE ARE INCLINED TO AGREE TO THE PLEA OF THE ASSESSEE FOR SETTING ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORING THE MATTER BACK TO HIM FOR ADJUDICATION AFRESH AS PER LAW. NE EDLESS TO MENTION, THE CIT(A) SHALL ALLOW THE ASSESSEE AN APPROPRIATE OPPORTUNITY OF BEING HEARD AND ONLY THEREAFTER, ADJUDICATE THE VARIOUS G ROUNDS RAISED BY THE ASSESSEE AS PER LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES, AS ABOVE. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COU RT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF T HE HEARING ON 29/09/2015. SD/- SD/- (RAMLAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 29/09/2015 5 ITA NO. 3717/MUM/2011 (ASSESSMENT YEAR : 2007-08) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS