DCIT, CHENNAI V. M/s. Raghavendra Automation P Ltd., CHENNAI

ITA 395/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57923 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: P V RAVIK UMAR
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 395/MDS/2011 (ASSESSMENT YEARS : 2006-07) THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE V(3), CHENNAI - 600 034. (APPELLANT) V. M/S RAGHAVENDRA AUTOMATION P. LTD., A-20, PHASE III, THIRUVIKA INTERNATIONAL ESTATE, GUINDY, CHENNAI - 600 032. PAN : AAACR3001R (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI P.V. RAVIK UMAR, ADVOCATE DATE OF HEARING : 30.01.2012 DATE OF PRONOUNCEMENT : 30.01.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E IS THAT THE CIT(APPEALS) DELETED AN ADDITION OF ` 45,50,399/- BEING SITE ERECTION EXPENSES CLAIMED BY THE ASSESSEE, DISALLOWED BY A.O . AS CAPITAL I.T.A. NO. 395/MDS/11 2 OUTGO. AS PER THE REVENUE, ASSESSEE HAD NOT PRODUC ED ANY EVIDENCE IN SUPPORT OF ITS CLAIM NOR WAS ANY RECONC ILIATION FILED BEFORE THE COMPLETION OF ASSESSMENT. REVENUE IS ALSO AG GRIEVED THAT LD. CIT(APPEALS) ACCEPTED FRESH EVIDENCE WITHOUT GIVIN G AN OPPORTUNITY TO THE A.O. TO SUBMIT HIS VIEW THEREBY VIOLATING RU LE 46A OF INCOME- TAX RULES, 1962. 2. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD DEBITE D IN ITS PROFIT & LOSS ACCOUNT A SUM OF ` 45,50,399/- AS SITE ERECTION EXPENSES. A.O. DISALLOWED THE CLAIM FOR WANT OF RECONCILIATION AND SUPPORTING DOCUMENTS. HE TREATED IT AS CAPITAL OUTGO. 3. IN ITS APPEAL BEFORE LD. CIT(APPEALS), ASSESSEE ARGUED THAT THE EXPENDITURE INCURRED WERE AT ITS VARIOUS WORK SITES AND WAS REVENUE IN NATURE. ASSESSEE ALSO FURNISHED A CHART GIVING A BREAK-UP OF SITE ERECTION EXPENSES INCURRED AT 33 DIFFERENT SITES. IT SEEMS ASSESSEE ALSO PRODUCED SALES BILLS RAISED IN THIS REGARD FOR PROVING THE EXPENDITURE BEFORE LD. CIT(APPEALS) . LD. CIT(APPE ALS) ACCEPTED THE CLAIM AND DELETED THE DISALLOWANCE. I.T.A. NO. 395/MDS/11 3 4. NOW BEFORE US, LEARNED D.R. SUBMITTED THAT ASSES SEE HAD NEVER FILED THE BREAK-UP OF THE EXPENSES BEFORE A.O . NOR THE SALES BILLS IN SUPPORT OF ITS CLAIM. LD. CIT(APPEALS) A CCEPTED THE CLAIM OF THE ASSESSEE IN VIOLATION OF RULE 46A. 5. PER CONTRA, LEARNED A.R. SUBMITTED THAT ASSESSIN G OFFICER PASSED THE ASSESSMENT ORDER ON 11.12.2008 BUT, THE SAID ASSESSMENT ORDER WAS SERVED ON THE ASSESSEE ON 23.1 2.2008. ACCORDING TO LEARNED A.R., ON 22.12.2008 ASSESSEE HAD FILED DOCUMENTS IN SUPPORT OF ITS CLAIM. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. IT IS CLEAR FROM THE ABOVE FACTS THAT THE RECONCILI ATION STATEMENT AND EVIDENCE IN SUPPORT OF THE CLAIM OF SITE ERECTION E XPENSES WERE NEVER AVAILABLE TO THE A.O. AT ANY TIME BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS. NO DOUBT, ASSESSEE MIGHT HAVE FILED I T BEFORE THE A.O. ON 22.12.2008, BUT, THE ASSESSMENT ORDER STOOD ALRE ADY PASSED ON 11.12.2008. IN SUCH CIRCUMSTANCES, LD. CIT(APPEALS ) WAS JUSTIFIED IN ACCEPTING THE ADDITIONAL EVIDENCE. NEVERTHELESS, RULE 46A REQUIRES THAT SUCH ADDITIONAL EVIDENCE BE PUT TO THE A.O. FO R HIS COMMENTS I.T.A. NO. 395/MDS/11 4 BEFORE BEING ACCEPTED. THIS RULE OF NATURAL JUSTIC E HAS NOT BEEN FOLLOWED BY LD. CIT(APPEALS). WE ARE, THEREFORE, O F THE OPINION THAT THE MATTER HAS TO GO BACK TO A.O. FOR FRESH CONSIDE RATION. ORDERS OF BOTH A.O. AND LD. CIT(APPEALS) ARE SET ASIDE AND TH E ISSUE IS REMITTED BACK TO A.O. FOR CONSIDERATION AFRESH DE NOVO. ASS ESSEE SHALL FILE NECESSARY RECONCILIATION AND EVIDENCE IN SUPPORT OF THE EXPENDITURE BEFORE A.O. AND A.O. SHALL PROCEED IN ACCORDANCE WI TH LAW. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 30 TH JANUARY, 2012. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH JANUARY, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-V, CHENNAI-34/ CIT, CHENNAI-III, CHENNAI/D.R./GUARD FILE