ACIT, New Delhi V. Deepak Casting Ltd., New Delhi

ITA 3948/DEL/2010

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8824 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 23-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI ABY. T. VARKEY : JUDICIAL MEMBER ITA NO. 3948/DEL/2010 A.Y. 2006-07 ACIT, CIRCLE 10(1), VS. DEEPAK CASTING LTD., NEW DELHI. M-13, GALI NO. 19, SHASTRI NAGAR, NEW DELHI. PAN: AAAFD 4319 H ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SMT PARVINDER KAUR SR. DR RESPONDENT BY : NONE DATE OF HEARING : 09-12-2014 DATE OF ORDER : 09-02-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE DEPARTMENT, IS DIR ECTED AGAINST THE ORDER DATED 04-06-2010, PASSED BY THE CIT(APPEALS) -XIII, NEW DELHI IN APPEAL NO. 102/08-09, RELATING TO A.Y. 2006-07. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HEARING, DESPITE ISSUE OF NOTICE FOR HEARING THROUGH RPAD. WE PROCEE D TO DISPOSE OF THE APPEAL, EX PARTE, QUA THE ASSESSEE, ON MERITS AND IN THAT PROC ESS WE HAVE HEARD LD. DR AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. SOLE EFFECTIVE GROUND RAISED BY THE DEPARTMENT I S AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE IS E NTITLED FOR 2 CLAIM OF EXPENDITURE OF RS. 11,85,019/- WHICH WAS D ISALLOWED BY THE THEN AO AS THE ASSESSEE CLOSED DOWN ITS BUSI NESS. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD FI LED ITS RETURN OF INCOME, DECLARING LOSS OF RS. 29,63,425/-. IN COURSE OF AS SESSMENT PROCEEDINGS THE ASSESSEE VIDE ITS LETTER DATED 19-11-2008 INFORMED THAT DUR ING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY DID NOT CONDUCT ANY MANUFACTUR ING ACTIVITY DUE TO DISCONNECTION OF ELECTRICITY IN OCTOBER 2000. THE A O REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY ALL EXPENSES MIGHT NOT BE DISALLOW ED AS WAS DONE IN AY 2004-05, SINCE NO BUSINESS ACTIVITY WAS ACTUALLY CARRIED OUT DURING THE YEAR. THE ASSESSEE POINTED OUT THAT IN AY 2004-05 ASSESSEE HAD FILED I TS APPEAL BEFORE LD. CIT(A), WHO DECIDED IN ITS FAVOUR AND THE ADDITION MADE BY AO WAS DELETED. HOWEVER, THE DEPARTMENTAL APPEAL BEFORE THE TRIBUNAL WAS PENDING . THE AO, AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, DETERMINED THE TOTAL IN COME AT NIL BY DISALLOWING THE EXPENDITURE CLAIMED BY THE ASSESSEE. 4. LD. CIT(A) ALLOWED THE ASSESSEES APPEAL. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE US. 5. HAVING HEARD LD. DR AND PERUSING THE MATERIAL AV AILABLE ON RECORD WE FIND THAT IN A.Y. 2004-05 THE ITAT, DELHI BENCH B, REN DERED IN ITA NO. 1269/DEL/2008, VIDE ORDER DATED 26-6-2009 HAS RESTO RED THE MATTER TO THE FILE OF AO BY OBSERVING AS UNDER: 6 . W E HAVE CA R EF UL L Y CONS I DERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATER I AL PLACED ON RECORD . THERE IS A CONTRADICT I ON IN THE C L A I M OF THE REVENUE AND AS STATED BY THE ASSESSEE BEFO RE THE LD . CI ' T (A). THE LD . CIT (A) HAS HELD THAT THERE WAS A THEF T OF ST OC K IN TRADE . AS AGAI N ST THAT THE DEPARTMENT IS CLAIMING THAT THE THEF T WAS ON ACCOUNT OF PLANT AND MACH I NERY AND MISCELLANEOUS FIXED ASSET WHICH WAS NOT STOCK-IN-TR ADE. THE 3 ASSESSMENT ORDER IN THIS REGARD IS SILENT . I T HAS BEEN THE CASE OF THE ASSESSEE THAT THE ASSESSING OFFICER DID NOT GIV E PROPER OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE. IT APPEARS FROM THE ORDER OF THE LD . CIT' (A) THA T THE SUBMISSION OF THE ASSESSEE HAVE NOT BEEN REFERRED TO THE ASSESS I NG OF F ICE R TO MAKE HIM APP R ISED OF THE SUBM I SSION OF T HE ASSESSEE AS THE AS S ES S EE D I D NOT FURNI SH A N Y SU CH E XP L A N AT I ON A T THE TIME O F ASS ESSMENT . KEEP I N G IN V IEW T HE ENTIRET Y O F T H E SE FA CT S , WE A R E O F THE OP IN I ON THAT I T W I LL MEET T HE I NT E R E S T OF JUSTICE IF T H E MA TT E R I S R ES T O R ED BACK T O THE F I L E OF ASSESSING OFFICER FOR FRAMING DE NOVO ASSESSMENT AS PER PROVISIONS OF LAW AFTER GIVING TH E ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. WE DIRECT ACCORD INGLY. 6. RESPECTIVELY FOLLOWING THE DECISION OF THE ITAT FOR A.Y. 2004-05, THE ISSUE IS RESTORED TO THE FILE OF AO FOR DE NOVO ASSESSMEN T AS PER LAW, AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE . 7. IN THE RESULT, DEPARTMENTS APPEAL IS ALLOWED F OR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON 09-02-2015. SD/- SD/- (ABY. T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09-02-2015. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4