PMT MACHINES LTD, MUMBAI V. DCIT 2(4), MUMBAI

ITA 4055/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4173 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 07-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SREEKAR
• Keywords: Opportunity of being heard; Proportionate interest; TDS; Set aside
• Section: 271(1)(c); 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI VIKAS AWASTHY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4055/MUM/2018 ASSESSMENT YEAR: 2014-15 M/S PMT MACHINES LIMITED, 214, LINK WAY ESTATE, NEW LINK ROAD, MALAD (WEST), MUMBAI-64. VS. DCIT, CENTRAL CIRCLE-2(4), MUMBAI PAN NO. AAACP4680L APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MR. V. SREEKAR, DR DATE OF HEARING : 27/10/2020 DATE OF PRONOUNCEMENT : 29/10/2020 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2014-15. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-48, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX A CT 1961, (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 29.08.2019 , 23.01.2020 AND 27.10.2020, NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE TRIBUNAL ON THE ABOVE DATES. AS THERE IS NON-COMPLIANCE BY THE M/S PMT MACHINES LTD. ITA NO. 4055/MUM/2018 2 ASSESSEE, WE ARE PROCEEDING TO DISPOSE OFF THIS APP EAL, AFTER EXAMINING THE MATERIALS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE (DR). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 1. THE LD. CIT(A) ERRED IN CONFIRMING THE REDUCTION IN CAPITAL WIP BY RS.12,21,06,513/- BEING INTEREST DEBITED TO FOREIGN BRANCHES OF INDIAN BANKS WITHOUT TDS. 2. THE LD. CIT(A) ERRED IN CONFIRMING DISALLOWAN CE OF PROPORTIONATE INTEREST EXPENSE OF RS.12,94,70,007/- CALCULATED @ 12% P.A. ON LOANS &ADVANCES OF RS.107,89,16,730/-. 3. THE LD. CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF PROFESSIONAL FEES PAID TO BIGLINE TRADING PVT. LTD. OF RS.1,81,65,000/-. 4. THE LD. CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF SUNDRY BALANCES WRITTEN OFF OF RS.16,80,249/-. 5. THE LD. CIT(A) ERRED IN CONFIRMING THE INTEREST CHA RGED U/S 234B OF THE INCOME TAX ACT, 1961. 6. THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY INIT IATED U/S. 271(1)(C) OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2014-15 ON 2 9.11.2014 DECLARING TOTAL LOSS OF RS.26,84,11,099/-. IN THE ASSESSMENT PASSED U/S 143(3) DATED 16.12.2016, THE ASSESSING OFFICER (AO) ARRIVED AT T HE FOLLOWING TOTAL ASSESSED INCOME : RUPEES RUPEES TOTAL RETURNED INCOME ( - ) 26,84,11,098/ - ADD: DISALLOWED INTEREST EXPENSES 12,94,70,007/ - M/S PMT MACHINES LTD. ITA NO. 4055/MUM/2018 3 ADDITION ON ACCOUNT OF PROFESSIONAL FEES PAID 1,81,65,000/ - ADDITION ON ACCOUNT OF SUNDRY BALANCES WRITTEN OFF. 16,80,249/ - TOTAL ASSESSEE INCOME ( - ) 11,90,95,842/ - 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 28.03.201 8, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE EX-PARTE ON THE FOLLOWING GROUND : 4.1 THE APPEAL WAS FILED ON 28.01.2017, NOTICE ON 14.02.2018 WAS SENT FIXING THE CASE FOR HEARING ON 22.02.2018 THROUGH SPEED POST A T THE GIVEN ADDRESS BUT SAME WAS RETURNED UNDELIVERED. HOWEVER, ON 22.02.2018 ON ADJOURNMENT LETTER THROUGH DEVESH VASAVADA & CO. (C.AS) WAS FILED IN OFFICE. O NE SHRI PANKAJ MORE WAS CARRYING THE ADJOURNMENT LETTER. THE CARRIER OF LETTER WAS H ANDED OVER LETTER ISSUED FROM THIS OFFICE DATED 22.02.2018, RE-FIXING THE CASE ON 26.0 2.2018. IT WAS MENTIONED IS THE LETTER THAT SINCE APPEAL HAS BEEN FILED IN THE YEAR 2016-17, IT IS TO BE PRESUMED THAT GROUNDS/ISSUES ON WHICH THE APPEAL HAS BEEN FILED W OULD HAVE BEEN WELL UNDERSTOOD AND DELIBERATED BY ASSESSED ALREADY AT T HE TIME OF FILING OF APPEAL IT WAS MENTIONED IN THE LETTER THAT THIS IS LAST OPPORTUNI TY. HOWEVER ON 26.02.2018, ONE SHRI RONAK VASAVADA ATTE NDED WHO SOUGHT ADJOURNMENT AND CASE WAS ADJOURNMENT TO 12.03.2018. ON 12.03.2018 AGAIN SHRI RONAK ATTAINED AND SOUGHT FURTHER TIME VIDE ORDER S HEET ENTRY. SINCE THERE WAS NO L/A FILED, SHRI RONAK WAS ASKED TO FILE L/A. AGAIN ON 20.03.2018, NO L/A WAS FILED AND FURTHER TIME UPTO 23.03.2018 WAS ASKED. TILL 28.03.2018, NO ONE ATTENDED ON BEHALF OF ASSES SEE OR FILED ANY DETAILS. SINCE L/A ALSO HAS NOT BEEN FILED DESPITE SPECIFICALLY BEING REMINDED, SHRI RONAK'S ATTENDANCE IS ALSO NOT LAWFUL. M/S PMT MACHINES LTD. ITA NO. 4055/MUM/2018 4 IN THE CONTEXT OF ABOVE DETAILS, IT IS CLEAR THAT A SSESSEE HAS SHOWN TOTAL DISINTEREST IN PURSUING THE APPEAL. 5. BEFORE US, THE LD. DR SUBMITS THAT AS THERE IS N ON-COMPLIANCE BY THE ASSESSEE, THE ORDER PASSED BY THE LD. CIT(A) BE AFF IRMED. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVAN T MATERIALS ON RECORD. AS MENTIONED EARLIER, THE AO HAS MADE AN ADDITION O F RS.12,94,70,007/- (INTEREST EXPENSES), RS.1,81,65,000/- (PROFESSIONAL FEES PAID) AND RS.16,80,249/- (SUNDRY BALANCES WRITTEN OFF) TO THE LOSS OF RS.26,84,11,098/- DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. AS MENTIONED EARLIER, ON 22.02.2018, AN ADJOURNMEN T LETTER THROUGH DEVESH VASAVADA & CO. (CAS) WAS FILED IN THE OFFIC E OF THE CIT(A). THE APPEAL WAS RE-FIXED ON 26.02.2018. IT IS ALSO MENTIONED TH AT ON 26.02.2018, ONE SHRI RONAK VASAVADA ATTENDED, WHO SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 12.03.2018. ON 12.03.2018 AGAIN SHRI R ONAK ATTENDED AND SOUGHT FURTHER TIME VIDE ORDER SHEET ENTRY. THE LD. CIT(A) ASKED THE RONAK TO FILE LETTER OF AUTHORITY. HOWEVER, THE LETTER OF AU THORITY WAS NOT FILED. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF T HE CASE, WE ARE OF THE CONSIDERED VIEW THAT A REASONABLE OPPORTUNITY MAY B E GIVEN TO THE ASSESSEE TO PRESENT ITS CASE BEFORE THE LD. CIT(A). THEREFOR E, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIM TO DEC IDE THE MATTER AFRESH, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO APPEAR BEFORE THE LD. CIT(A) AND FILE T HE RELEVANT DOCUMENTS/EVIDENCE ON THE DATE TO BE FIXED FOR HEAR ING. M/S PMT MACHINES LTD. ITA NO. 4055/MUM/2018 5 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/10/2020. SD/- SD/- ( VIKAS AWASTHY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 29/10/2020 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI