Asiann Consolidated Industries Ltd., New Delhi V. ITO, New Delhi

ITA 4008/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91249 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-06-2015
• Assessment Year: 1993-1994
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA MISHRA
• Keywords: Rejection of books of accounts; Depreciation; Opportunity of being heard; Reasonable cause; Condonation of delay
• Section: 143(3); 133(6); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. GEORGE GEORGE K. , JM ITA NO . 4008 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NE W DELHI - 110001 VS THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4009 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 1 10001 VS THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4010 /DEL/2013 : ASSTT. YEAR : 1995 - 96 ASIAN CONSOLIDATED INDUSTRIES LTD., C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4011 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASST T. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4012 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS ASIAN CLOSURES LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPAT H, NEW DELHI - 110001 VS THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18, NEW DELHI (APPELLANT) (RESPONDENT) ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 2 ITA NO . 4013 /DEL/2013 : ASSTT. YEAR : 1992 - 93 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS ASIAN CLOSURES LTD.) C/O LALIT K. KH ANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4014 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS ASIA N CLOSURES LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4015 /DEL/2013 : ASSTT. YEAR : 1994 - 95 ASIAN CONSOLIDATED INDUSTRIE S LTD., (FORMERLY KNOWN AS ASIAN CLOSURES LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4016 /DEL/2013 : ASSTT. YEAR : 1993 - 9 4 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS ASIAN CLOSURES LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4017 / DEL/2013 : ASSTT. YEAR : 1994 - 95 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS ASIAN CLOSURES LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLAN T) (RESPONDENT) ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 3 ITA NO . 401 8/DEL/2013 : ASSTT. YEAR : 1995 - 96 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS ASIAN CLOSURES LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4019 /DEL/2013 : ASSTT. YEAR : 1992 - 93 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS TRANS ASIA PACKAGING LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE DY . C OMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1 2 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4020 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS TRANS ASIA PACKAGING LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANP ATH, NEW DELHI - 110001 VS THE ASSTT . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4021 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS TRANS ASIA PACKAGING LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE DY . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 3 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NO . 4022 /DEL/2013 : ASSTT. YEAR : 1993 - 94 ASIAN CONSOLIDATED INDUSTRIES LTD., (FORMERLY KNOWN AS TRANS ASIA PACKAGING LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE DY . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLANT) (RESPONDENT) ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 4 ITA NO . 4023 /DEL/2013 : ASSTT. YEAR : 1994 - 95 ASIAN CONSOLIDATE D INDUSTRIES LTD., (FORMERLY KNOWN AS TRANS ASIA PACKAGING LTD.) C/O LALIT K. KHANNA ASSOCIATES, 74, JANPATH, NEW DELHI - 110001 VS THE DY . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 18 , NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AA ACA5887A ASSESSEE BY : SH. SUDHIR SEHGAL & SUNIL MATHUR, ADV. REVENUE BY : SMT. ANURADHA MISHRA, CIT DR DATE OF HEARING : 10 . 06 .2015 DATE O F PRONOU NCEMENT : 19 .06 .2015 ORDER PER BENCH: THESE APPEALS OF THE ASSESSEE HAVING SOME COMM ON ISSUES WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ITA NOS. 4010 TO 4013/DEL/2013, 4015 TO 4019/DEL/2013 AND 4022 - 4023/DEL/2013 ARE APPEALS ON QUANTUM ADDITIONS WHILE ITA N OS. 4008 - 4009/DEL/2013, 4014/DEL/2013 & 4020 - 4021/DEL/2013 ARE APPEALS ON PENALTY. 3. FACTS RELATED TO THESE CASES AS EMERGING FROM THE ORDERS OF THE AUTHORITIES BELOW AND THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE IN BRIEF ARE THAT M/S ASIAN CONSOLIDAT ED INDUSTRIES LTD. INCORPORATED ON 18.01.1985 WAS ENGAGED IN ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 5 THE BUSINESS OF MANUFACTURING OF OPEN TOP SANITARY AND GENERAL LINE CANES. THERE WERE TWO OTHER SISTER CONCERNS NAMELY M/S ASIAN CLOSURES LTD. & M/S TRANS ASIA PACKAGING LTD. THE SISTER CONCERNS M/S ASIAN CLOSURES LTD. WAS AMALGAMATED WITH M/S ASIAN CONSOLIDATED INDUSTRIES LTD. W.E.F. 20.03.1992 BY VIRTUE OF AN ORDER DATED 06.01.1994 OF THE HON BLE PUNJAB & HARYANA HIGH COURT. THE EFFECT OF THE SAID ORDER WAS GIVEN BY THE REGISTRAR OF COMPANIES ON 07.07.1998. THE ASSESSEE CLAIMED TO HAVE MAINTAIN ED SEPARATE BOOKS OF ACCOUNTS OF BOTH THE ABOVE SAID COMPANIES FOR THE ASSESSMENT YEARS 1992 - 93 TO 1996 - 97 FOR BOTH THE COMPANIES AND THE RETURNS OF INCOME WERE FILED SEPARATELY OF BOTH THE AFORESAID COMPAN IES. THE ANOTHER SISTER CONCERN NAMELY M/S TRANS ASIA PACKAGING LTD. ALSO AMALGAMATED WITH M/S ASIAN CONSOLIDATED INDUSTRIES LTD. W.E.F. 01.04.1992 BY VIRTUE OF THE ORDER OF HON BLE PUNJAB & HARYANA HIGH COURT DATED 28.07.1995 AND THE EFFECT OF THIS AMALGA MATION WAS GIVEN BY THE REGISTRAR OF COMPANIES ON 12.10.1995. THE RETURNS OF INCOME FOR THE ASSESSMENT YEARS 1993 - 94 - 1994 - 95 WERE FILED SEPARATELY BY M/S TRANS ASIA PACKAGING LTD. HOWEVER, WHILE COMPLETING THE VARIOUS ASSESSMENTS FOR THE ASSESSMENT YEARS 1 992 - 93 TO 1996 - 97 IN THE CASE OF M/S ASIAN CLOSURES LTD. AND FOR THE ASSESSMENT YEARS 1992 - 93 TO 1994 - 95 IN THE CASE OF M/S TRANS ASIA PACKAGING LTD., THE DEPARTMENT HAD NOT ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 6 TAKEN COGNIZANCE OF SUCH MERGER AND THAT SET - OFF THE LOSSES AND UNABSORBED DEPRECI ATION OF THE ABOVE SAID AMALGAMATING COMPANIES I.E. M/S ASIAN CONSOLIDATED INDUSTRIES LTD. AND M/S TRANS ASIA PACKAGING LTD. HAD NOT BEEN GIVEN AGAINST THE AMALGAMATED COMPANY M/S ASIAN CONSOLIDATED INDUSTRIES LTD. THEREAFTER THE AMALGAMATED COMPANY M/S AS IAN CONSOLIDATED INDUSTRIES LTD. HAD GONE INTO LIQUIDATION BY AN ORDER OF THE HON BLE PUNJAB & HARYANA HIGH COURT W.E.F. 07.01.1999 AND SUBSEQUENT TO THE ORDER OF THE HON BLE HIGH COURT FOR WINDING UP OF THE COMPANY, THE LIQUIDATOR WAS APPOINTED AND ALL TH E CONTROLS AND MANAGEMENT OF THE COMPANY WAS TAKEN OVER BY HIM. IT WAS FURTHER SUBMITTED THAT THE MANAGEMENT OF THE COMPANY CEASED TO EXIST AND THE PRE MISES OF THE COMPANY WAS SEALED . A LL THE PLANT & MACHINERY, RECORDS HAD BEEN TAKEN POSSESSION OF BY THE L IQUIDATOR ON AS WAS, WHERE WAS BASIS. IN THE MEAN TIME, THE ASSESSEE APPROACHED THE HON BLE PUNJAB & HARYANA HIGH COURT FOR STAY OF THE DEMAND RAISED BY THE AO IN THE EX - PARTE ORDER , AMOUNTING TO RS. 135 CRORES, VIDE COMPANY PETITION NO. 8/1998. THE HON BL E HIGH COURT PASSED THE ORDER DATED 08.05.2013 AS UNDER: THE ORDERS PASSED BY THE INCOME TAX DEPARTMENT RANGES FOR THE ASSESSMENT YEARS 1991 TO 2001. THE ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 7 COMPANY WAS ORDERED TO BE WOUND UP BY THIS COURT VIDE ORDER DATED 07.01.1999 PASSED IN CP - 8 - 1998. SINCE THE PERMISSION OF THIS COURT IS REQUIRED TO ASSAIL THE POST - WINDING UP ASSESSMENT ORDERS ONLY, HENCE THE EX - MANAGEMENT WOULD BE AT LIBERTY TO CHALLENGE SUCH ORDERS IN ACCORDANCE WITH LAW THROUGH THE STATUTORY APPEAL/REVISION, IF SO PERMISSIBLE IN LAW . AS REGARDS THE ASSESSMENT ORDERS PERTAINING TO PRE - WINDING UP PERIOD, LEARNED COUNSEL FOR THE EX - MANAGEMENT UNDERTAKES TO APPROACH THE INCOME TAX DEPARTMENT I.E. THE CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES (CBDT), NORTH BLOCK, NEW DELHI FOR SETTLEMENT OF THE CLAIM, WITHIN A PERIOD OF ONE MONTH FROM THE DATE OF RECEIPT OF A CERTIFIED COPY OF THIS ORDER. ORDERED ACCORDINGLY. 4. IN THE PRESENT CASE, T HE PETITION FOR REVIVAL OF THE COMPANY WAS FILED BY THE MANAGEMENT/EX - MANAGEMENT OF THE COMPANY VIDE CA NO. 393 OF 2013 & CP NO. 6 OF 2013 BY STATING THAT THE EX - MANAGEMENT HAD FAILED TO APPROACH THE TAX AUTHORITIES WITHIN THE STIPULATED PERIOD FIXED BY ORDER DATED 08.05.2013 AND A REQUEST WAS MADE TO ENLARGE THE PERIOD FIXED SO AS TO ENABLE THE EX - MANAGEME NT TO APPROACH THE TAX AUTHORITIES WITH A VIEW TO SETTLE ITS OUTSTANDING TAX DUES. THEIR LORDSHIPS IN THE ORDER DATED 28.01.2014 OBSERVED AS UNDER: ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 8 THE REQUEST APPEARS TO BE JUST AND REASONABLE. THE PRAYER IS ACCEPTED TO SECURE THE ENDS OF JUSTICE, EX - MA NAGEMENT OF THE (COMPANY - IN - LIQUIDATION) WOULD NOW APPEAR IN THE OFFICE OF THE COMMISSIONER OF INCOME TAX, DELHI - 1, NEW DELHI ON 04.02.2014, FOR THE TAX AUTHORITIES TO TAKE FURTHER STEPS IN ACCORDANCE WITH LAW. IT HAS F URTHER BEEN OBSERVED AS UNDER: TH IS COURT HAS NO DOUBT THAT THE APPELLATE AUTHORITIES, WHERE APPEALS ARE PENDING WOULD TAKE A SYMPATHETIC VIEW IN CONDONING THE DELAY IN FILING THE APPEAL SINCE THE COMPANY WAS IN LIQUIDATION AND THE OFFICIAL LIQUIDATOR WAS IN POSITION BY OPERATION OF ORDER S OF THIS COURT AND HAD A PRIMARY DUTY TO CONTEST ALL CASES ON BEHALF OF THE COMPANY IN WHICH OFFICERS OF LARGE NUMBER OF COMPANIES ARE INVOLVED. 5 . ACCORDINGLY, THE ASSESSEE FILED THE APPEALS UNDER CONSIDERATION . A LONGWITH THESE APPEALS , THE ASSESSEE A LSO MOVED APPLICATIONS FOR CONDONATION OF DELAY , IF ANY, BY FILING AFFIDAVIT S OF THE EX - DIRECTOR SH. RAJIV JAIN . CONTENTS OF ALL THOSE AFFIDAVITS ARE IDENTICAL AND FOR THE SAKE OF CONVENIENCE THE CONTENTS OF THE AFFIDAVIT PERTAINING TO ITA NO. 4010/DEL/201 3 ARE REPRODUCED AS UNDER: 1. THAT THE ABOVE SAID APPELLANT HAD FILED AN APPEAL BEFORE HON BLE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH ON 28.06.2013 AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XXX, NEW DELHI. THE ORDER WHICH WAS ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 9 CONTESTED IN APPEAL WAS PASSED U/S 143(3) OF THE ACT. THE APPEAL FILED BEFORE HON BLE TRIBUNAL IS REGISTERED AT ITA NO. 4010/DEL/2013. 2. SUBSEQUENT TO FILING OF THE APPEAL BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XXX, NEW DELHI, THE SAID C OMPANY M/S ASIAN CONSOLIDATED INDUSTRIES LTD. WENT INTO LIQUIDATION AND THE OFFICIAL LIQUIDATOR WAS APPOINTED WITH EFFECT FROM 07.01.1999. AFTER THE COMPANY WENT INTO LIQUIDATION, THE CONTROL AND MANAGEMENT OF THE COMPANY VESTED WITH THE OFFICIAL LIQUIDATO R APPOINTED BY THE HON BLE PUNJAB & HARYANA HIGH COURT AT CHANDIGARH. THE SAID APPEAL WHICH WAS FILED BEFORE CIT(A) - XXX, NEW DELHI WAS DECIDED AT THE BACK OF THE ASSESSEE COMPANY WHEN IT WAS UNDER LIQUIDATION ON 09.03.2001. SINCE THE ASSESSEE COMPANY WAS U NDER LIQUIDATION AND WAS NOT SERVED WITH ANY NOTICE AND EVEN THE ORDER PASSED, THE ASSESSEE WAS PREVENTED BY SUFFICIENT REASONS IN NOT ABLE TO CONTEST THE APPEAL WHICH WAS DECIDED AT ITS BACK. 3. THAT IT IS BY VIRTUE OF THE ORDER OF HON BLE PUNJAB & HARYA NA HIGH COURT AT CHANDIGARH DATED 08.05.2013, THAT THE EX - MANAGEMENT OF THE ASSESSEE COMPANY WAS PERMITTED TO CONTEST THE ORDERS BY WHICH HUGE DEMANDS WERE CREATED BEFORE THE APPROPRIATE AUTHORITIES. IT IS ONLY WHEN PERMITTED BY THE HON BLE HIGH COURT THAT THE ASSESSEE COMPANY WAS ABLE TO FILE ITS APPEAL BEFORE THE HON BLE ITAT WHICH IS REGISTERED AT ITA NO. 4010/DEL/2013. 4. THAT IT IS SUBMITTED THAT THE PRESENT APPEAL IS BEING FILED IN PURSUANCE OF THE LIBERTY GIVEN BY THE HON BLE PUNJAB & HARYANA HIGH C OURT HAVING ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 10 REGARDS TO THE CIRCUMSTANCES AND FACTS RELATING TO INABILITY OF THE ASSESSEE COMPANY TO APPEAL EARLIER. 5. IN VIEW OF THE ABOVE SUBMISSIONS, IT IS MOST RESPECTFULLY SUBMITTED THAT THE DELAY IN SUBMITTING THE PRESENT APPEAL MAY KINDLY BE CONDONE D AS THE ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSES. IT IS PRAYED THAT THE APPEAL MAY KINDLY BE HEARD AND DISPOSED OF ON MERITS. DEPONENT VERIFICATION I, RAJIV JAIN THE ABOVE NAMED DEPONENT DO HEREBY VERIFY ON OATH THAT THE CONTENTS OF T HE AFFIDAVIT ABOVE ARE TRUE TO MY PERSONAL KNOWLEDGE AND BELIEF AND NOTHING MATERIAL HAS BEEN CONCEALED OR FALSELY STATED. VERIFIED AT NEW DELHI ON THIS 15 TH DAY OF MAY 2015 DEPONENT 6 . WE FIND MERIT IN THE ABOVE SUBMISSIONS AND A CCORDINGLY, THE APPEALS ARE ADMITTED BY KEEPING IN VIEW FOR DIRECTIONS GIVEN BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE ORDER S DATED 08.05.213 & 28.01.2014 IN C.P. NO. 8 OF 1998 AND CA NO. 393 OF 2013 RESPECTIVELY. 7. FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA NO. 4010/DEL/ 2013: ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 11 1. THAT THE ORDER IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE ORDER PASSED BY AO IS PERVERSE IN LAW AND FACTS AND HAS BEEN PASSED WITHOUT PROPER APPLICATION OF MIND. 3. THAT THE SUBMISSION REGARDING THE MERGER OF THE ASSESSEE WITH M/S ASIAN CONSOLIDATED INDUSTRIES LTD. DULY SUPPORTED BY THE ORDER OF THE HON BLE HIGH COURT OF PUNJAB & HARYANA WERE MADE BUT THE SAME WERE COMPLETELY IGNORED BY THE ASSESSING OFFICER. 4. THAT THE APPELLANT COMPANY HAVING MERGED WITH M/S ASIAN CLOSURE LTD. ( ACIL) AND M/S TRANS ASIA PACKAGING LTD. (TAPL) AS PER THE ORDERS OF THE HON BLE PUNJAB & HARYANA HIGH COURT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND FACTS IN NOT VIEWING THE INTER - SE TRANSACTIONS BETWEEN THE GROUP COMPANIES IN THE LIGHT OF ORDER OF THE MERGER. THE REJECTION OF BOOKS OF ACCOUNTS UNDER SECTION 145 IS BASED ON SUSPICION AND SURMISES AND DESERVES TO BE CANCELLED AND THE BUSINESS LOSS AS PER THE PROFIT AND LOSS ACCOUNT DESERVES TO BE FULLY ALLOWED IN THE CASE OF AMALGAM ATED COMPANY M/S ACIL IN ACCORDANCE WITH PROVISIONS OF SEC. 72A OF THE ACT. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OFFICER HAS ERRED IN LAW AND ON FACT IN NOT CONSIDERING THAT COMPANIES M/S ASIAN CLOSURES LTD. (ACL) AND M/S TRANS ASIA PA CKAGING LTD. (TAPL) HAVING MERGED WITH M/S ACIL UNDER THE ORDERS OF THE PUNJAB & HARYANA HIGH COURT UNDER THE LAW ONLY ONE ASSESSMENT IN THE CASE OF ACIL WAS TO BE MADE. THE FRAMING OF THREE DIFFERENT ASSESSMENTS IN ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 12 THE CASE OF ALL THE THREE COMPANIES AND THE DISALLOWANCE OF VARIOUS EXPENSES IN THE HANDS OF THOSE COMPANIES IS THEREFORE ILLEGAL AND INVALID. 6. THAT THE ASSESSING OFFICER HAS MADE VARIOUS ADDITION WITHOUT CALLING FOR THE RECORDS & DETAILS FROM THE OFFICIAL LIQUIDATOR WHO WAS HAVING CUSTODY OF THE SAME AND WITHOUT GIVING ANY NOTICE TO HIM AND IN ANY CASE, NO OPPORTUNITY IS AFFORDED TO THE ASSESSEE COMPANY. 7. THAT THE MATERIAL COLLECTED AT THE BACK OF ASSESSEE & RELIED UPON BY THE AO WAS NEVER CONFRONTED TO THE ASSESSEE AND THE SUBMISSIONS MAD E BEFORE THE CIT(A0 IN THE FIRST ROUND OF APPEAL BY THE ASSESSEE AND THE DIRECTION GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE SETTING ASIDE THE CASE HAVE NOT BEEN FOLLOWED/DEALT WITH. 8. THAT THE ASSESSING OFFICER HAS FAILED TO APPREC IATE THAT ALL THE RECORD WAS IN CUSTODY OF THE OFFICIAL LIQUIDATOR & INFORMATION CALLED FOR WAS AVAILABLE WITH HIM AND IT WAS FOR HIM TO PRODUCE THE SAME AND IN CASE OF ANY DIFFICULTY ASSESSING OFFICER COULD SEEK ASSISTANCE OF THE EX - MANAGEMENT. 9. THAT T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT MR. RAKESH MAHAJAN WHO WAS APPEARING ON BEHALF OF THE OFFICIAL LIQUIDATOR DID NOT HAVE THE REQUIRED AUTHORIZATIONS FOR THE SAME AND NEVER MADE THE CONCESSION ATTRIBUTED TO HIM WH ILE TAKING ADVERSE VIEW. 10. THAT THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THAT THERE HAS BEEN DENIAL TO NATURAL ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 13 JUSTICE TO THE ASSESSEE AS NO OPPORTUNITY IS AFFORDED TO IT. 11. THAT THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THAT THE ORDER HAS CAUSED A LOT OF HARDSHIP AND PREJUDICE TO THE ASSESSEE AS ALL THE REQUIRED INFORMATION AND DOCUMENTS EVIDENCING/JUSTIFYING THE CONTENTIONS RAISED BY THE ASSESSEE WERE IN THE CUSTODY OF THE OFFICIAL LIQUIDATOR. 12. THAT THE ASSESSEE HAS NOT BEEN AFFORDED WITH ANY OPPORTUNITY TO EXPLAIN HIS CASE AND PROVE THE GENUINENESS OF HIS CLAIMS. 13. THAT THE ASSESSING OFFICER COULD HAVE ISSUED NOTICE UNDER SECTION 131(6) DIRECTING THE EX - DIRECTORS OF THE COMPANY TO BE PRESENT AND PROVIDE THE DETAILS THEREOF IT THE O FFICIAL LIQUIDATOR HAD FAILED TO PROVIDE THE SAME. 14. THAT WITHOUT PREJUDICE TO THE ABOVE MENTIONED GROUNDS: I. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING INTEREST PAID AMOUNTING TO RS. 19,77,840/ - . THE EXPENSES INCURRED ON ACCOUNT OF INTEREST HAVING BEEN INCURRED WHOLLY AND EXCLUSIVELY DESERVE TO BE FULLY ALLOWED. II. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF T HE ASSESSING OFFICER IN DISALLOWING ADMINISTRATIVE, SELLING ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 14 AND DISTRIBUTION EXPENSES AMOUNTING TO RS. 1,61,97,155/ - SINCE THESE EXPENSES ARE INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE APPELLANT COMPANY. THESE DESERVE TO BE FULLY ALLOWED. III . THAT THE THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM OF THE APPELLANT COMPANY UNDER SECTION 80HH AND 80 - I OF THE INCOME TAX, 1961 SINCE COMPLETE DETAIL S AND JUSTIFICATION OF THE ABOVE DEDUCTION WAS AVAILABLE IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. 15. THAT THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE AND ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE AN Y OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING ESPECIALLY WHEN THE DETAILS SOUGHT BY THE ASSESSEE COMPANY FROM THE ASSESSING OFFICER VIDE VARIOUS LETTERS HAVE NOT BEEN MADE AVAILABLE TO THE ASSESSEE COMPANY IN PURSUANCE TO THE HON BLE HIGH COURT S ORDER DATED 08.05.2013 RECEIVED BY THE ASSESSEE COMPANY ON 28.05.2013. 8. DURING THE COURSE OF HEARING T HE LD. COUNSEL FOR THE ASSESSEE REQUESTED FOR SETTING ASIDE THESE APPEALS TO THE AO AND STATED IN WRITING AS UNDER: A) ASSESSMENTS OF THE ASSESSEE FOR AYS 19 96 - 97 TO 2001 - 02 STANDS SET - ASIDE U/S 264 OF THE INCOME TAX ACT. IN ORDER TO ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 15 AVOID THE SITUATION THAT PROCEEDINGS BE COMPLETED BY MULTIPLE AUTHORITIES, THE ASSESSMENTS FOR AY 91 - 92 TO 95 - 96 MAY ALSO BE COMPLETED BY ONE AUTHORITY AND MOST OF THE GROUNDS ARE COMMON WITH THE ORDER AS PASSED U/S 264 VIZ. PRESENT APPEALS AND, AS SUCH, SUITABLE ORDERS BE PASSED AS THE HON BLE BENCH MAY DEEM IT FIT IN THE INTEREST OF JUSTICE AND EQUITY. B) THE ISSUE RELATED TO AMALGAMATION OF COMPANIES, GIVING EFFECT TO THEIR AFFAIR S, SET OFF DEPRECIATION AND LOSSES IN THE AMALGAMATED COMPANY, PROVISIONS OF SECTION 72A ARE THE ISSUES WHICH REQUIRE COMPLETION OF ASSESSMENTS BY THE AO. THIS ISSUE OF AMALGAMATION AND APPLICABILITY OF SECTION 72A IS ALSO PENDING IN AY 96 - 97 IN THE CASES OF M/S ACIL AND M/S ACL, THE ASSESSMENTS OF WHICH STANDS SET - ASIDE U/S 264. SINCE THIS ISSUE IS TO BE ADJUDICATED FROM AY 92 - 93 ONWARDS, IT WOULD BE LOGICAL AS WELL AS JUSTIFIED THAT THE SAME MAY BE DECIDED BY THE ONE AUTHORITY I.E. AO AND ONLY THEN CORREC T EFFECT CAN BE GIVEN BY THE DEPARTMENT. C) THE APPELLANTS HAVE CLAIMED DEDUCTIONS U/S 80HH AND 80I FROM AYS 92 - 93 ONWARDS. HOWEVER, THE SAID DEDUCTIONS WERE NOT ALLOWED NOT ONLY IN ASSESSMENT YEARS 92 - 93 TO 95 - 96, BUT IN AY 96 - 97 ALSO, WHICH STANDS SET - ASID E U/S 264 OF THE ACT. AS SUCH DECISION ON THE ISSUE REQUIRES TO BE ADJUDICATED BY ONE AUTHORITY I.E. AO IN ORDER TO AVOID DECISION BY MULTIPLE AUTHORITIES AND AVOIDANCE OF LITIGATION. D) IN ALMOST ALL THE ASSESSMENTS THE DEPARTMENT HAS DOUBTED PURCHASES AND SALES OF TRADING BUSINESS. SUCH DOUBTS HAVE NOT ONLY BEEN RAISED IN THE YEARS BEFORE HON BLE ITAT, BUT ALSO IN THE YEARS WHICH HAVE BEEN DECIDED U/S 264 OF THE ACT. IN VIEW OF SETTING ASIDE OF ORDER U/S 264 OF THE ACT, THE ISSUE RELATED TO GENUINENESS OF T RADING ACTIVITY IS YET TO BE DECIDED AND IT IS PREFERRED THAT BY SINGLE AUTHORITY SHOULD ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 16 CONSIDER THAT AND NOT BY MULTIPLE AUTHORITY. SIMILAR IS THE POSITION WITH RESPECT TO INVOKING OF PROVISIONS U/S 145 OF THE ACT AND GENUINENESS OF BOOKS OF ACCOUNTS MAI NTAINED BY THE GROUP IS TO BE EXAMINED BY A SINGLE AUTHORITY, SO THAT A DECISION CAN BE TAKEN AND THERE MAY NOT BE MULTIPLE OBSERVATIONS/VIEWS ON THE ISSUE. THE ISSUES RELATED TO MANUFACTURING EXPENSES, ADMINISTRATIVE AND SELLING EXPENSES ETC. HAVE ALSO BE EN SET - ASIDE FOR FRESH ADJUDICATION U/S 264 OF THE ACT. SINCE SAME ISSUES ARE ALSO PENDING IN APPEAL BEFORE ITAT, IT IS REQUESTED THAT THE SAME MAY ALSO BE ADJUDICATED BY THE SAME AUTHORITY TO AVOID MULTIPLE VIEW ON A SINGLE ISSUE. E) THE APPELLATE AUTHORITI ES HAVE PASSED ORDERS IN THE CASES OF ASSESSEE COMPANIES IN A N EX - PARTE MANNER AND AT PRESENT ARE HAVING NO RECORDS WITH THEM. (CONFIRMED BY CIT(A) AS PER LETTER WHICH IS FILED BEFORE REGISTRY FOR REMOVING DEFECTS.) F) PERIOD UNDER CONSIDERATION IS VERY OLD AND ALMOST MORE THAN 22 YEARS HAVE PASSED AND COLLECTION OF INFORMATION WOULD BE VERY DIFFICULT. THE AO HAS POWERS U/S 133(6) WHICH CAN BE USED FOR THE ASSESSMENTS TO BE FRAMED IN AN EQUITABLE AND JUSTIFIED MANNER. IT IS NOT OUT OF PLACE TO MENTION THAT PR EVIOUSLY MOST OF THE ASSESSMENTS WERE FRAMED IN AN EX - PARTE MANNER, WITHOUT DUE VERIFICATION AND APPRAISAL OF THE FACTS. HENCE IN ORDER TO GET A JUSTIFIED CORRECT DETERMINATION OF INCOME, THE SAME MAY BE FINALIZED AFRESH BY THE ASSESSING OFFICER, AFTER VER IFICATION OF THE FACTS AND RECORDS EITHER SUBMITTED BY THE ASSESSEE OR REQUISITION U/S 133(6). THUS, IN VIEW OF THE LATER DEVELOPMENTS BY THE HON BLE HIGH COURT ORDERS, IT IS PRAYED THAT THE ORDERS AS PASSED BE SET ASIDE TO THE FILE OF ASSESSING OFFICER AS HAS BEEN DONE BY THE CIT - I, DELHI. ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 17 9 . THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE AFORESAID SUBMISSIONS AND REQUESTED THAT THE APPEALS UNDER CONSIDERATION MAY BE SET ASIDE TO THE AO SINCE THE FACTS FOR THE YEARS UNDER CONSIDERATION ARE SIMILAR TO TH E FACTS INVOLVED FOR THE ASSESSMENT YEAR 1996 - 97 WHEREIN THE LD. CIT - I, DELHI WHILE EXERCISING HIS POWER U/S 264 OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) H AS SET ASIDE THE ISSUES TO THE FILE OF THE AO TO BE DECIDED DE - NOVO AFTER PRO VIDING DUE AND REASONABLE OPPORTUNITY TO THE ASSESSEE. THE LD. CIT DR ALTHOUGH OPPOSED THE SETTING ASIDE OF THE IMPUGNED ORDER S TO THE AO BUT COULD NOT CONTROVERT THE FACTUAL MATRIX NARRATED BY THE LD. COUNSEL FOR THE ASSESSEE. 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE DEPARTMENT PASSED THE EX - PARTE ORDER DURING THE PERIOD O F LIQUIDATION AND THE LD. CIT - I, DELHI WHILE DECIDING THE PETI TIONS OF THE ASSESSEE U/S 264 OF THE ACT FOR THE ASSESSMENT YEARS 1996 - 97 TO 2001 - 02 VIDE SEPARATE ORDER S EACH DATED 11.03.2015 SET ASIDE THE ISSUES TO THE FILE OF THE AO FOR MAKING ASSESSMENT DE - NOVO AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS DEEM IT APPROPRIATE TO REMAND ALL THE CASE S UNDER ITA NOS. 4 008 TO 4023 /DE L/2013 ASIANN CONSOLIDATED INDUSTRIES LTD. 18 CONSIDERATION TO THE FILE OF THE AO TO BE DECIDED EXPEDITIOUSLY AFRESH , IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO CO - OPERAT E AND NOT SEEK UNDUE OR UNWARRANTED ADJOURNMENTS. 1 1 . IN THE RESULT, APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 19 /0 6 / 2015) . SD/ - SD/ - (GEORGE GEORGE K. ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19 /06 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR