ACIT CC 3(3) CEN RG 3, MUMBAI V. WELSPUN SYNTEX LTD, MUMBAI

ITA 377/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3234 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 14-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A G BHATKAR
• Assessee Lawyers: MITESH SHAH
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G, BENCH MUM BAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO.375 TO 377/MUM/2015 ( / ASSESSMENT YEAR: 2008-09 TO 2010-11) THE ACIT, CENTRAL CIRCLE- 3(3), ROOM NO. 401, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI- 400 020. VS. M/S. WELSPUN SYNTEX LTD., B- WING, TRADE WORLD, 9 TH FLOOR, KAMALA MILL COMPOUND, S.B.MARG, LOWER PAREL, MUMBAI- 400 013. ./ ./ PAN/GIR NO. : AAACW0489L ( / APPELLANT ) .. ( !' / RESPONDENT ) /REVENUE BY : SHRI. A.G.BHATKAR #$% /ASSESSEE BY : SHRI. MITESH SHAH & ' ( %) / DATE OF HEARING : 24/08/2016 *+,- ( %) / DATE OF PRONOUNCEMENT : 24/08/2016 !' / O R D E R PER RAM LAL NEGI, JM THESE APPEALS HAVE BEEN PREFERRED BY THE RE VENUE AGAINST COMMON ORDER DATED 10/10/2014 PASSED BY THE LD. CIT(APPEALS)-39, MUMBAI, FOR THE ASST. YEARS 2008-09 TO 2010-11. SINCE ALL THESE APPEALS P ERTAIN TO THE SAME ASSESSEE FOR THE DIFFERENT ASSESSMENT YEARS AND THE ISSUES I NVOLVED ARE COMMON, THE SAME WERE CLUBBED AND HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO 375 TO 377/MUM/2015 ASSESSMENT YEAR: 2008-09 TO 2010-11 ITA 375/MUM/15 A.Y. 2008-09 SINCE THE GROUNDS URGED IN THESE APPEALS ARE IDENTI CAL, WE TAKE THE APPEAL FOR THE ASSESSMENT YEAR 2009-10 AS LEAD CASE AND DISCUSS THE FACTS THEREIN. THE APPELLANT/ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING, PROCESSING AND TRADING IN POLYSTER Y ARN, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 30.9.2008 DECLARING THE TOTAL INCOME OF RS. (-)2,32,96,876/-. A SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT THE BUSINESS/RESIDENTIAL PREMISES OF THE WELSPUN GROUP INCLUDING THE ASSESSEE COMPANY ON 13.10,2010. ACCOR DINGLY, THE AO INITIATED PROCEEDINGS UNDER SECTION 153A. THE ASSESSEE AGAIN FILED THE SAME RETURN. HOWEVER, THE AO COMPLETED THE ASSESSMENT ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT) DETERMINING THE TOTAL INCOME AT RS. 1,74,74,430/-. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE LD. CIT(A). THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGAINST THE SAID ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O THAT DISCOUNTING & BANKING CHARGES OF RS. 294.83 LAKHS CANNOT BE CONSI DERED AS PART OF INTEREST PAID WHEREAS THE ASSESSEE HAS NOT GIVE N BREAK UP OF THESE CHARGES AND MAJORITY OF THESE CHARGES RELATES TO OVERDRAFT CHARGES ON THE CURRENT ACCOUNT. 3 ITA NO 375 TO 377/MUM/2015 ASSESSMENT YEAR: 2008-09 TO 2010-11 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN PARTLY DELETING THE ADD ITION OF RS. 1,33,64,268/- TO BOOK PROFIT BY DISALLOWANCE U/S 14 A R.W. RULE 8D. 3. AT THE OUTSET, THE LD. AUTHORISED REPRESENTAT IVE (AR) SUBMITTED THAT THE ASSESSEE AND THE REVENUE HAD FILED CROSS APPEAL S BEFORE THE ITAT AGAINST IMPUGNED ORDER PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEARS 2007-08 TO 2010-2011. THE TRIBUNAL HEARD THE ASSESS EES APPEALS AND FOLLOWING ITS EARLIER DECISION RENDERED IN ITA NO 7 630/MUM/2011 DATED18.12.15, REMANDED THE ISSUE PERTAINING TO DIS ALLOWANCE U/S 14A TO THE FILE OF AO FOR FRESH ADJUDICATION. IN THE PRESE NT APPEALS ONE OF THE COMMON ISSUES IS DISALLOWANCE UNDER SECTION 14A. IN THE LIGHT OF THE AFORESAID FACTS THE LD. AR SUBMITTED THAT THESE APP EALS ARE REQUIRED TO BE REMANDED BACK TO THE AO FOR ADJUDICATING THE ISSUES IN ACCORDANCE WITH THE DIRECTIONS ISSUED BY THE TRIBUNAL IN ASSESSEES APPEALS. THE LD DEPARTMENTAL REPRESENTATIVE (DR) DID NOT CONTROVERT THE SUBMISSIONS OF THE LD. AR. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE DOCU MENTS ON RECORD. WE FIND THAT THE ASSESSEES APPEALS INCLUDING THE APPE ALS PERTAINING TO THE ASSESSMENT YEARS UNDER CONSIDERATION HAVE BEEN REMA NDED BACK TO THE AO FOR FRESH ADJUDICATION IN THE LIGHT OF THE VIEW TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL, IN ASSESSEES OWN CASE ITA N O 7630/MUM/2011(SUPRA). SINCE THE DISALLOWANCE UNDER SECTION 14A IS IN DISPUTE IN THE REVENUES APPEALS UNDER CONSIDERATIO N, WE ARE OF THE CONSIDERED VIEW THAT THESE APPEALS SHOULD BE REMAND ED BACK TO THE AO TO DECIDE THE CROSS APPEALS AS DIRECTED BY THE COORDIN ATE BENCH. 5. ACCORDINGLY, WE REMAND THESE APPEALS BACK TO T HE AO FOR FRESH ADJUDICATION AND DECISION IN THE MATTER. AO SHALL G RANT A REASONABLE 4 ITA NO 375 TO 377/MUM/2015 ASSESSMENT YEAR: 2008-09 TO 2010-11 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER T HE PRINCIPLES OF NATURAL JUSTICE. ITA 376/MUM/15 A.Y. 2009-10 AND ITA 377/MUM/15 A.Y. 2010-11 SINCE THE FACTS AND CIRCUMSTANCES OF THE APPEALS AN D THE ISSUES INVOLVED IN THE APPEAL FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11 ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THE APPEAL FOR THE ASSES SMENT YEAR 2008-09 AFORESAID, EXCEPT THE AMOUNT INVOLVED AND SINCE WE HAVE REMANDED BACK THE APPEAL FOR THE ASSESSMENT YEAR 2008-09 TO THE AO FO R FRESH ADJUDICATION, WE SEND THESE APPEALS ALSO BACK TO THE AO FOR FRESH AD JUDICATION IN TERMS OF ORDER PASSED IN APPEAL PERTAINING TO THE ASSESSMENT YEAR 2008-09. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE R EVENUE ARE ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST, 2016 SD/- SD/- ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER & .' MUMBAI; / DATED: 24/08/2016 5 ITA NO 375 TO 377/MUM/2015 ASSESSMENT YEAR: 2008-09 TO 2010-11 !'#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. & 1% ( ) / THE CIT(A)- 4. & 1% / CIT 5. 45 !%6# , ) 6#- , & .' / DR, ITAT, MUMBAI 6. 7 8' / GUARD FILE. !' / BY ORDER, '4% !% //TRUE COPY// ()*+ (DY./ASSTT. REGISTRAR) , & .' / ITAT, MUMBAI PRAMILA