BIOTOR INDUSTRIES LTD, MUMBAI V. ADDL CIT 6(1), MUMBAI

ITA 3892/MUM/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8512 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: RAJESH KAPADIA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH , JUDICIAL MEMBER ITA NO. 3892/MUM/2012 : A.Y : 2008 - 09 M/S. BIOTOR INDUSTRIES LTD., 13, SITAFALWADI, DR. MASCARENHAS ROAD, MAZGAON, MUMBAI 400 010 (APPELLANT) PAN : AAACJ2845F VS. ADDL. COMMISSIONER OF INCOME TAX - 6(1), MUMBAI (RESPONDENT) APPELLANT BY : SHRI RAJESH KAPADIA RESPONDENT BY : SHRI SUMAN KUMAR DATE OF HEARING : 08/11/2017 DATE OF PRONOUNCEMENT : 08/11/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 14, MUMBAI DATED 28.03.2012 PERTAINING TO THE ASSESSMENT YEAR 2008 - 09 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 27.12.2010 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN ITS APPEAL, ASSESSEE HAS RAISED VARIOUS GROUNDS, WHICH READ AS UNDER : - 2 M/S. BIOTOR INDUSTRIES LTD. ITA NO. 3892/MUM/2012 1. DISALLOWAN CE ON ACCOUNT OF PENALTY A) THE LEARNED ASSESSING OFFICER HAS ERRED IN ADDING BACK RS5,28,149/ - ON ACCOUNT OF PENALTY PAID FOR LAND REVENUE TAX ON N.A. LAND TOWARDS CUSTOM DUTY FOR UNDER VALUATION OF IMPORTED GOODS. B) THE AO'S CONTENTION TO CONSIDER P ENALTY FOR VIOLATION AND NON - COMPLIANCE OF THE RULES OF LAND REVENUE AUTHORITY & CUSTOM AUTHORITY IS NOT VALID AND SUBSISTING. C) THE A.O. HAS DISALLOWED AN AMOUNT OF RS. 3,28,149/ - ON ACCOUNT OF PENALTY PAID FOR LAND REVENUE TAX ON N.A. LAND AND RS. 2,0 0,000/ - PAID AS PENALTY TOWARDS CUSTOM DUTY FOR UNDER VALUATION OF IMPORTED GOODS. D) THE APPELLANT SUBMITS THAT THE AO HAS ERRED IN ERRED IN ADDING BACK RS5,28,149/ - ON ACCOUNT OF PENALTY PAID FOR LAND REVENUE TAX ON N.A. LAND TOWARDS CUSTOM DUTY FOR UN DER VALUATION OF IMPORTED GOODS. 2. DISALLOWANCE U/S.14A A) THE APPELLANT SUBMITS THAT THE LEARNED AO HAS ERRED IN ADDING BACK RS.3,55,715/- EXPENSES TO EARN TAX FREE INCOME OF RS.3,38,843/ - AS DIVIDEND. B) THE LEARNED AO HAS ERRED IN DISALLOWING RS. 3,55,715/ - U/S.14A OF THE INCOME TAX ACT ON THE BASIS OF RULE 8D. 3. DISALLOWANCE OF DEPRECIATION ON TECHNICAL KNOW HOW FOR SHORT DEDUCTION OF TDS A) THE APPELLANT SUBMITS THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOWING DEPRECIATION U/S.32 OF THE ACT FOR SHORT DEDUCTION OF TDS ON TECHNICAL KNOW HOW. B) THE APPELLANT HAS ACQUIRED A SEBASIC PLANT ALONG WITH TECHNICAL KNOW HOW FROM SHANDONG OCEAN CHEM INDUSTRIES, CHINA. THE APPELLANT HAS 3 M/S. BIOTOR INDUSTRIES LTD. ITA NO. 3892/MUM/2012 NOT PAID TDS ON THE LAST INSTALLMENT OF RS.1,43,03,941 WHICH WAS NOT PAYABLE AS PER TERMS OF CONTRACT. C) THE APPELLATE SUBMITS THAT IT WAS CRYSTALLISED IN FY 2009 - 10 FOR NOT TO PAY LAST INSTALLMENT OF RS 14,303,941 AS APPLICATION OF TECHNICAL KNOW HOW W AS NOT FEASIBLE IN INDIAN ENVIRONMENT AS PER THE AGREEMENT EXECUTED WITH M/S SHANDONG OCEAN CHEM INDUSTRIES, CHINA. D) THE APPELLANT SUBMITS THAT IN FY 2009 - 10, THE COMPANY HAS CREDITED LAST INSTALLMENT OF RS. 14,303,941 AS IT WAS NO LONGER PAYABLE AND ACCORDINGLY WRITTEN BACK DEPRECIATION ON TECHNICAL KNOW HOW PROVISION CHARGED IN EARLIER YEARS. E) THE APPELLANT SUBMITS THAT THE AO HAS ERRED IN ALLOWING THE DEPRECIATION OF RS. 35,75,941. 4. PRIOR PERIOD EXPENSES A) THE LEARNED ASSESSING OFFICER HAS ERRED IN ADDING BACK RS 21,35,146/ - ON ACCOUNT OF EXPENSES PAID IN CURRENT YEAR PERTAINS TO EARLIER YEAR. B) THE APPEL LATE SUBMITS THAT ALL THOSE EXPENSES WHICH WERE PAID IN CURRENT YEAR ARE ALTHOUGH PERTAINS TO PRIOR YEARS BUT ARE AUTHORIZED AND APPROVED IN CURRENT YEAR AND CRYSTALLIZED FOR PAYMENT. C) THE APPELLATE SUBMITS THAT THE DEPARTMENT DOESN'T LOSS REVENUE WHET HER THE COMPANY CLAIMS EXPENSES IN CURRENT YEAR OR IN LAST YEAR AS THE COMPANY COMES UNDER THE SAME TAX BRACKET. D) THE APPELLATE RELIES ON THE FOLLOWING JUDGMENT: COMMISSIONER OF INCOME TAX VERSUS EXXON MOBIL LUBRICANTS PVT LTD. (DELHI HIGH COURT ITA 288/2010) E) THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE ADDITION SO MADE BY HIM. 4 M/S. BIOTOR INDUSTRIES LTD. ITA NO. 3892/MUM/2012 5. THE APPELLANT SUBMITS THAT THE AO HAS ERRED IN INITIATING PENALTY PROCEEDING U/S 217(1)(C) FOR FURNISHING IN ACCURATE PARTICULARS OF INC OME. 3. OSTENSIBLY, THE GROUNDS RAISED BY THE ASSESSEE ARISE OUT OF AN ASSESSMENT MADE BY THE ASSESSING OFFICER AND THE VARIOUS ADDITIONS MADE ARE IN CHALLENGE. THE CAPTIONED PROCEEDINGS THROW - UP A VERY PECULIAR SITUATION, WHICH IS NARRATED HEREINAFTER. 4. THE APPEAL HAS BEEN FILED BY THE ASSESSEE BEFORE THE TRIBUNAL IN 2012 AND SINCE JUNE, 2013 IT HAS COME UP FOR HEARING ON MULTIPLE OCCASIONS AND ON EACH OF THE OCCASION, ASSESSEE HAS SOUGHT ADJOURNMENT. IN FACT, SINCE DECEMBER, 2014 A COMMON REFRAIN O F THE ASSESSEE IN ORDER TO SEEK ADJOURNMENT IS THE INABILITY TO SUPPORT THE GROUNDS RAISED IN APPEAL ON ACCOUNT OF ITS RECORDS BEING UNDER SEIZURE BY THE VAT AUTHORITIES AT GUJARAT AS WELL AS THE CBI AND STATE BANK OF INDIA. WHEN THE APPEAL CAME UP FOR HE ARING TODAY, THE FOLLOWING APPLICATION HAS BEEN MOVED SEEKING FURTHER TIME, WHICH IS REPRODUCED AS UNDER : - DATE : NOVEMBER 8, 2017 TO, THE HON'BLE MEMBERS, B BENCH, INCOME TAX APPELLATE TRIBUNAL MUMBAI. RESPECTED SIRS, REF : BIOTOR INDUSTRIES LTD . ITA NO. : 3892/M/12 5 M/S. BIOTOR INDUSTRIES LTD. ITA NO. 3892/MUM/2012 SUB : REQUEST FOR ADJOURNMENT IN THE CASE AS THE SUPPORTING PAPERS NEEDED FOR SUBMISSION ARE NOT IN POSSESSION OF THE APPELLANT COMPANY WHICH ARE SEIZED BY VARIOUS AUTHORITIES NAMELY VAT DEPARTMENT, CBI AND STATE BANK OF INDIA. THE ABOVE REFERRED CASE IS FIXED FOR HEARING FOR TODAY. IT IS TO BRING TO YOUR KIND KNOWLEDGE THAT, DESPITE OUR EFFORTS TO OBTAIN THE RECORDS, TILL DATE WE ARE NOT IN A POSITION TO GET THE PAPERS RELEASED FROM THE VAT (SALES TAX) AUTHORITIES AT GUJARAT AS WELL AS FROM THE CBI WHERE THE RECORDS ARE SEIZED BY THEM ON ACCOUNT OF SOME ALLEGED IRREGULARITIES FOR WHICH INVESTIGATIONS ARE IN THE PROCESS. SINCE THE ADDITIONS ARE HUGE AT RS.75,98,77,834/ - WHICH IMPACTS THE VERY EXISTENCE OF THE APPELLANT COMPANY, WE REQUEST YOUR HONOURS TO KINDLY GRANT US TIME TO AVAIL THE DOCUMENTS FROM THE CUSTODY OF CBI/VAT AUTHORITIES AND OBLIGE. WE ARE MAKING EVERY EFFORT TO OBTAIN POSSESSION OF THE RECORDS WHICH MAY PLEASE BE CONSIDERED SYMPATHETICALLY. INCONVENIENCE IS HIG HLY REGRETTED. THANKING YOU, YOURS FAITHFULLY, FOR BIOTOR INDUSTRIES LIMITED SD/ - RAJESH KAPADIA DIRECTOR 5. IT WAS PUT ACROSS TO THE LEARNED REPRESENTATIVE THAT THE SAID PLEA HAS BEEN TAKEN ON NUMEROUS OCCASION S AND, IN FACT, THE APPLICATION DOES NOT BRING OUT ANY PROGRESS MADE BY THE ASSESSEE OR THE STEPS TAKEN TO EXPEDITIOUSLY OBTAIN THE RECORDS ; AND, EVEN NO TIME - FRAME HAS 6 M/S. BIOTOR INDUSTRIES LTD. ITA NO. 3892/MUM/2012 BEEN AVERRED FOR OBTAINING THE RECORDS . N O SATISFACTORY EXPLANATION CAME FORTH EXCEPT T HE PRAYER FOR ADJOURNMENT OF THE MATTER. 6. PERTINENTLY, SUCH LIKE CASES CLOG THE CAUSE LISTS OF THE TRIBUNAL AND WHENEVER THE APPEAL IS PUT - UP FOR HEARING, ASSESSEE EXPLAINS ITS INABILITY TO PROCEED WITH THE APPEAL. IT IS NOTABLE THAT THE APPEAL HAS BEE N FIXED FOR ALMOST EIGHT OCCASIONS AND THE ASSESSEE HAS EXPRESSED ITS INABILITY TO ARGUE THE GROUNDS RAISED BY IT. CONSIDERING THE ENTIRETY OF CIRCUMSTANCES, IN OUR VIEW, IT WOULD BE IN THE FITNESS OF THINGS THAT THE APPEAL OF THE ASSESSEE IS CONSIGNED TO RECORDS AND THE ASSESSEE IS GIVEN A LIBERTY TO APPROACH THE TRIBUNAL FOR RE - INSTITUTION OF ITS APPEAL AND ITS ADJUDICATION ON MERITS AS AND WHEN IT IS ABLE TO OBTAIN THE REQUISITE MATERIAL. ACCORDINGLY, SUBJECT TO THE AFORESAID REMARK S , APPEAL OF THE ASS ESSEE IS DIRECTED TO BE CONSIGNED TO RECORDS AND IS TREATED AS DISMISSED FOR STATISTICAL PURPOSES. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 8 TH NOVEMBER, 2017. SD/ - SD/ - ( PAWAN SINGH ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 8 T H NOVEMBER , 201 7 *SSL* 7 M/S. BIOTOR INDUSTRIES LTD. ITA NO. 3892/MUM/2012 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, B BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI