Globus Infocom Ltd., New Delhi V. DCIT Circle-10(1), New Delhi

ITA 4088/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2840 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 07-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 40A(3)

Judgement Text

ITA NO. 4088/DEL/2019 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBE R AND MS SUCHITRA KAMBLE, JUDIC IAL MEMBER ITA NO. 4088/DEL/2019 ( A .Y 2012-13) (THROUGH VIDEO CONFEREN CING) GLOBUS INFOCOM LTD. C , SAFDARJANG DEVELOPMENT AREA, NEW DELHI - 110016 AABCG3985C (APPELLANT) VS DCIT, CIRCLE-10(1), CENTRAL REVENUE BUILDING, I.P. ESTATE, NEW DELHI. (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. AJAY KUMAR, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 01/04/2015 PASSED BY CIT(A)-18, NEW DELHI FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORREC T FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 3,62,37,000/- ON ACCOUNT OF WRITTEN OFF OF ADVANCE TO STAFF WHICH WAS PAID IN PRECEDING ASSESSMENT YEARS FOR THE PURPOSE OF BUSIN ESS. DATE OF HEARING 19.11.2020 DATE OF PRONOUNCEMENT 25.11.2020 ITA NO. 4088/DEL/2019 2. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORREC T FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE ADDITION OF RS. 4363132/- ON ACCOUNT OF 50% OF BUSINESS PROMOTION E XPENSES UNDER SECTION 40A(3) OF THE INCOME TAX ACT, 1961. 3. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 7,07,796/- OUT OF BUSINESS PROMOTION EXPENSES UNDER SECTION 40A(3) OF THE INCOME TAX ACT, 1961. 4. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 2,27,930/- ON ACCOUNT OF 50% OUT OF DEEPAWALI EXPEN SES ON ESTIMATION BASIS. 5. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 7,08,191/- ON ACCOUNT OF 50% OUT OF STAFF TRAINING AND WELFARE EXPENSES ON ESTIMATION BASIS. 6. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 5,78,631/- ON ACCOUNT OF 50% OUT OF FREIGHT AND CAR TAGE EXPENSES ON ESTIMATION BASIS. 7. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND ITA NO. 4088/DEL/2019 FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 2924492/- ON ACCOUNT OF 20% OF VEHICLE RUNNING AND MAINTENANCE EXPENSES ON ESTIMATION BASIS. 8. THAT LD. CIT(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE AND WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD IS NOT JUSTIFIED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING T HE DISALLOWANCE OF RS. 19,59,215/- OUT OF INTEREST PAID ON BORROWED FUNDS FOR THE ADVANCE PAID TO STAFF. 9. APPELLANT HAS EVERY RIGHT TO MAKE, ADD, DELETE, MODIFY OR ALTER ANY GROUNDS OF THE APPEAL AT THE TIME OF HEARING. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING AND TRADING OF AUDIO, VIDEO PRODUCTS. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL LOSS OF RS.(-)14,80,77,072/- ON 30.09.2012. THE ASSESSIN G OFFICER PASSED ASSESSMENT ORDER DATED 27.02.2015 UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 THEREBY ASSESSING THE INCOME OF THE ASSES SEE AT RS.(-) 10,03,70,690/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. NONE APPEARED AT THE TIME OF HEARING HENCE WE AR E PROCEEDINGS ON THE BASIS OF THE RECORDS AVAILABLE BEFORE US. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD LD. DR AND PERUSED THE MATERIAL AV AILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT(A) HAS NOT GIVEN ANY CATEGORICAL FINDING ON MERIT OF THE CASE AND DISMISSED THE APPEAL ON THE GROUND OF NON-PROSECUTION OF ITA NO. 4088/DEL/2019 APPEAL. BEFORE THE CIT(A) NONE APPEARED ON BEHALF O F THE ASSESSEE. FROM THE PERUSAL OF THE ORDER OF THE CIT(A), IT CAN BE SEEN THAT THE CIT(A) HAS NOT GIVEN ANY CATEGORICAL FINDING ON MERIT OF THE CASE. THER EFORE, IT WILL BE APPROPRIATE TO GIVE THE OPPORTUNITY OF HEARING TO THE ASSESSEE BEF ORE THE CIT(A). HENCE, WE ARE REMANDING BACK THE ENTIRE ISSUE TO THE FILE OF THE CIT(A) TO BE DECIDED ON MERIT. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. WE FURTHER DIRECT TH E ASSESSEE TO CO-OPERATE THE REVENUE AUTHORITIES FOR JUST AND PROPER DISPOSAL BY REMAINING PRESENT ON THE HEARING DATES AND SUBMIT THE RELEVANT DOCUMENTS, OT HERWISE, THE REVENUE IS AT LIBERTY TO DISMISS THE APPEAL OF THE ASSESSEE EX-PA RTE ON MERIT. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURP OSE. 8. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER, 2020 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 25/11/2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO. 4088/DEL/2019