NASENT POLYMERS PVT. LTD., Nagpur V. ACIT-CIRCLE-2, Nagpur

ITA 378/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1667 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: K C BUTHRAJA
• Keywords: Unexplained cash credit; Depreciation; Difference of opinion
• Section: 143(3); 234B

Judgement Text

1 ITA NO. 378/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER (S.M.C.) I.T.A. NO. 378/NAG/2013 ASSESSMENT YEAR : 2006 - 07 NASENT POLYMERS PVT. LTD., ASSTT. COMMISSIONER OF FLAT NO. 501 AMAN VELLAY, V/S. INCOME - TAX. CIRCLE - 2, BEHIND DINSHAW FACTORY, NAGPUR. BORGAON ROAD, NAGPUR - 13. PAN AABW3085G APPELLANT. RESPONDENT. APPELLANT BY : SHRI K.C. BUTHRAJA. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 23 - 07 - 2015 DATE OF PRONOUNCEMENT : 18 TH AUGUST, 2015 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - 16, MUMBAI, CAMP AT NAGPUR DATED 16 - 07 - 2013. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE COMMISSIONER OF INCOME TAX (APPEALS) - 16 ERRED IN SAYING THAT THE ASSESSEE HAS RECEIVED CHEQUE FROM MR. SHAZIL ANSARI FOR ` .2,90,000/ - . IT IS INCORRECT TO SAY THAT IN FACT THE MONEY BELONGS TO THE ASSESSEE ITSELF & WAS GIVEN TO THE CREDITOR IN CA SH AND TAKEN BACK AS CHEQUE AS MENTIONED ISN THE ORDER. THERE IS NO PROOF TO THIS. 2 ITA NO. 378/NAG/2013 THE COMPANY IS IN LOSSES SINCE LAST SO MANY YEARS, HAVING BROUGHT FORWARD LOSSES OF ` .39.26 LACS. THE COMPANY DID NOT HAVE MUCH INCOME & THEREFORE TAKEN LOAN. IF THIS I NCOME BELONGED TO THE COMPANY, COMPANY COULD HAVE VERY WELL SHOWN AS INCOME AGAINST THE LOSSES AND STILL WOULD NOT HAVE BEEN LIABLE TO TAX. ONLY BECAUSE THE COMPANY DID NOT HAVE MONEY, IT LOOK IF FROM MR. SHAZIL ANSARI. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) - 16 ERRED IN NOT CONSIDERING THE BROUGHT FORWARD LOSSES OF ` .36.26 LAC & NOT SETTING OFF AGAINST THE SAID INCOME. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) - 16 ERRED IN LEVYING OF INTEREST U/S 234B OF ` .244 53/ - & U/S 234D OF ` .2031/ - AND ALSO INTEREST U/S 220(2) OF ` .5430/ - . 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 16 ERRED IN NOT ACCEPTING THAT THE SUBSIDY IS GRANTED BY THE GOVERNMENT ON THE BASIS OF VALUE OF PLANT & MACHINERY. BUT IT IS NOT A REIMB URSEMENT FOR PLANT & MACHINERY. THEREFORE, SUBSIDIARY IS NOT TO BE DEDUCTED FROM THE VALUE OF PLANT & MACHINERY AND SHOULD BE SHOWN SEPARATELY IN BALANCE - SHEET AS CAPITAL/RESERVE/SHARE OF THE COMPANY. HENCE NOT DEDUCTED FROM THE PLANT & MACHINERY BEFOR E CHARGING DEPRECIATION. MOREOVER, THE SUBSIDY DOES NOT BELONG TO THIS YEAR BUT PERTAINS TO 10 YEARS BACK HENCE CANNOT BE ADDED TO THIS YEARS INCOME. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) - 16 ERRED IN INITIATING PENALTY U/S 271(1)(C) WHEN THERE I S NO CONCEALMENT OF INCOME BUT ONLY DIFFERENCE OF OPINION. 2. AT THE OUTSET, LEARNED A.R. MR. K.C. BUTHRAJ H AS EXPRESSED NOT TO PRESS GROUND NO. 2. HE HAS ALSO INFORMED THAT LEARNED CIT(APPEALS) HAS PASSED AN EXPARTE ORDER WITHOUT PROVIDING A REASONABLE OPPORTUNITY OF HEARING. 3. ON MERITS THE LEARNED A.R. HAS PLEADED THAT AN ORDER UNDER SECTION 143(3) WAS PASSED FOR ASSESSMENT YEAR 2006 - 07 IN THE STATUS OF A COMPANY WHO IS IN THE BUSINESS OF TRADING OF CHEMICALS. THE ASSESSING OFFICER HAS ENQUIRED ABOUT AN 3 ITA NO. 378/NAG/2013 UNSECURED LOAN OF ONE SHRI SHAZIL ANSARI OF ` .2,90,000/ - . LEARNED A.R. HAS INFORMED THAT ALTHOUGH MR. SHAZIL ANSARI IS ONE OF THE DIRECTOR OF THE COMPANY AND ASSESSED TO TAX AS WELL AS HAVING SUFFICIENT PROOF IN RESPECT OF THE SOURCE OF DEPOSIT BUT THE ASSESSING OFFICER HAS IGNORED ALL THOSE EVIDENCES. MOREOVER WHEN THE MATTER WAS PENDING BEFORE THE LEARNED CIT(APPEALS) THE ASSESSEE WAS NOT GRANTED PROPER OPPORTUNITY. THE LEA RNED CIT(APPEALS) WAS VISITING FROM MUMBAI AND THE APPEAL WAS DECIDED IN A HURRIED MANNER. HE HAS FINALLY PLEADED THAT IN A SITUATION WHEN THE REQUISITE DOCUMENTS IN SUPPORT OF THE AMOUNT IN QUESTION W ERE VERY MUCH IN POSSESSION OF THE ASSESSEE THEN HE H AS EVERY HOPE OF SUCCESS TO THE EFFECT THAT THE AMOUNT IN QUESTION SHOULD BE DELETED IF AN OPPORTUNITY BE GRANTED. 4. IN RESPECT OF ONE OF THE GROUND PERTAINING TO THE QUESTION OF SUBSIDY RECEIVED FROM THE GOVERNMENT HE HAS INFORMED THAT THE SUBSIDY WAS A CAPITAL INCENTIVE, THEREFORE, THE AMOUNT OF THE SUBSIDY WAS NOT REQUIRED TO BE DEDUCTED FROM THE VALUE OF THE PLANT & MACHINERY. 5. FROM THE SIDE OF THE REVENUE, LEARNED D.R. HAS OBJECTED THE ARGUMENTS MAINLY ON THE GROUND THAT WHEN THE HEARING WAS GRANTE D NO ONE WAS PRESENT AND NOW THE ASSESSEE IS TRYING TO FURNISH ALL FRESH EVIDENCES. 6. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES PRIMA FACIE IT APPEARS THAT THIS IS A FIT CASE TO RESTORE IT BACK TO THE FILE OF LEARNED CIT(APPEALS) BECAUSE THE ASSESSEE WAS NOT PROVIDED A REASONABLE OPPORTUNITY OF HEARING. LEARNED A.R. MR. K.C. BUTHRAJA H AS CORRECTLY MENTIONED THAT THE LEARNED CIT(APPEALS) FROM MUMBAI WAS CAMPING AT NAGPUR WHEN THE EXPARTE ORDER WAS PASSED . RATHER IT IS APPARENT FROM THE RECORDS THAT WH EN A DIRECTOR HAS ADVANCED A SMALL AMOUNT OF ` .2,90,000/ - TO THE COMPANY THEN NATURALLY THE COMPANY SHOULD NOT BE HELD AS IN 4 ITA NO. 378/NAG/2013 DEFAULT FOR THE ALLEGATION AS MENTIONED BY THE ASSESSING OFFICER UNEXPLAINED CASH CREDIT. FROM THE SIDE OF THE ASSESSEE NOW A PAP ER BOOK IS FURNISHED CONTAINING THE RELEVANT DOCUMENTS, COPIES OF ACCOUNTS, BANK PASS BOOK, ARTICLE AND MEMORANDUM OF ASSOCIATION OF THE COMPANY IN SUPPORT OF THE IMPUGNED AMOUNT RECEIVED , THAT TOO THROUGH ACCOUNT PAYEE CHEQUES. HAD THESE INFORMATION WERE ALLOWED TO BE FURNISHED THEN THE LEARNED CIT(APPEALS) WOULD HAVE NOT TAKEN AN ADVERSE VIEW. BE THAT AS IT WAS, WE NOW DIRECT THIS ASSESSEE TO APPEAR SUO MOTO BEFORE THE LEARNED CIT(APPEALS) WITHIN 30 DAYS ON RECEIPT OF THIS ORDER WITHOUT WAITING FOR ANY NOTICE OF HEARING AND GET THIS APPEAL FINALIZED AT AN EARLY DATE BY FURNISHING ALL EVIDENCES AND TAKE ALL NECESSARY STEPS TO GET THIS APPEAL FINALIZED AT AN EARLY DATE. HOWEVER, THE REVENUE AUTHORITIES ARE AT LIBERTY TO ADOPT DUE LEGAL RECOURSES AS PRESCRI BED UNDER THE I.T. ACT. HENCE THE APPEAL IS RESTORED BACK TO THE FILE OF THE LEARNED CIT(APPEALS) AS DIRECTED ABOVE. 7. FOR REST OF THE GROUNDS THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE EVIDENCES WHICH ARE NOW PLACED BEFORE US SO THAT ON THE BASIS O F THOSE EVIDENCES THE ISSUE OF CAPITAL SUBSIDY CAN BE PROPERLY ADJUDICATED BY THE LEARNED CIT(APPEALS). WITH THESE DIRECTIONS GROUND NO. 1 AND 4 CAN BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. REST OF THE GROUNDS I.E. GROUND NOS. 2 AND 3 NEED NO A DJUDICATION. HENCE DISMISSED. 8. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED THAT TOO FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2015. SD/ - (MUKUL K. SHRAWAT) JUDICIAL MEMBER N A G P U R , DATED: 18 TH AUGUST, 2015. 5 ITA NO. 378/NAG/2013 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. RE VENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSIS TANT REGISTRAR, ITAT, NAGPUR.