MAHINDRA UGINE STEEL COMPANY LTD, MUMBAI V. ASST CIT 6(3), MUMBAI

ITA 4126/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0840 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 03-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHANDR
• Assessee Lawyers: PRASAD BAPATAR
• Keywords: Depreciation; Opportunity of being heard; Scheme of amalgamation
• Section: 147; 144; 154; 15

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4126/MUM/2015 ASSESSMENT YEAR: 2008-09 MAHINDRA UGINE STEEL COMPANY LIMITED ( NOW MERGED WITH MAHINDRA CIE AUTOMOTIVE LTD. AS PER SCHEME OF AMALGAMATION ) 74, SHREE GANESH APARTMENT, OPP. SITLADEVI TEMPLE, LADY JAMSHETJI ROAD, MAHIM, MUMBAI-400016 / VS. ACIT-6(3), AAYAKAR BHAVAN M.K. ROAD, MUMBAI-400020 ( !' # /ASSESSEE) ( $ / REVENUE) PAN. NO.AAACM4998G $% & # ' / DA TE OF HEARING : 22/01/2018 & # ' / DATE OF ORDER: 22/01/2018 !' # ! / ASSESSEE BY SHRI PRASAD BAPAT-AR $ ! / REVENUE BY SHRI T.A. KHAN-DR ITA NO. 4126/MUM/2015 MAHINDRA UGINE STEEL COMPANY LIMITED ( NOW MERGED WITH MAHINDRA CIE AUTOMOTIVE LTD. AS PER SCHEME OF AMALGAMATION ) 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED EX-PARTE ORDER DATED 04/03/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, DISALLOWING A SUM OF RS.15,84,72 0/- IN RESPECT OF ESOPS EXPENSES AND FURTHER A SUM OF RS.16,49,442/- U/S 35DDA OF THE INCOME TAX ACT, 196 1 (HEREINAFTER THE ACT) IN RESPECT OF COMPENSATION AN D ALSO DEPRECIATION OF SAP EXPENSES @ 60% AMOUNTING TO RS.83,05,188/- AND OTHER DEPRECIATION DISALLOWANCE OF RS.82,650/-. 2. DURING, HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI PRASAD BAPAT, EXPLAINED THAT THE ASSESSMENT WAS FRAMED U/S 144 R.W.S. 147 OF THE ACT AND EVEN BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL) NETHER ANYBODY WAS PRESENT FOR THE ASSESSE E NOR FROM THE DEPARTMENT. ON QUESTIONING BY THE BENCH A S TO WHY THE ASSESSEE COULD NOT APPEAR BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL). IT WAS EXPLAI NED THAT THE MERGER TOOK PLACE IN OCTOBER 2013 AND THE CONCERNED PERSON, DUE TO CERTAIN UNAVOIDABLE ITA NO. 4126/MUM/2015 MAHINDRA UGINE STEEL COMPANY LIMITED ( NOW MERGED WITH MAHINDRA CIE AUTOMOTIVE LTD. AS PER SCHEME OF AMALGAMATION ) 3 CIRCUMSTANCES COULD NOT APPEAR ONE DATE AND THUS AN EX-PARTE ORDER WAS PASSED. ON THE OTHER HAND, THE L D. DR, SHRI T.A. KHAN CONTENDED THAT IT WAS THE DUTY O F THE ASSESSEE TO MAKE EFFECTIVE REPRESENTATION BEFORE TH E LD. COMMISSIONER OF INCOME TAX (APPEAL) ON THE APPOINTE D DATE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE AT THE RELEVANT TIME W AS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TOOLS, ALLOYS, SPECIAL STEEL AND PROCESSING CHARGES OF STAMPING DI VISION, DECLARED INCOME OF RS.30,72,30,750/- ON 30/09/2008. THE CASE OF THE ASSESSEE WAS TAKEN FOR SCRUTINY, THEREFORE, THE CASE OF THE ASSESSEE WAS REOPENED U/ S 147 OF THE ACT. THE ASSESSEE HAD ALREADY RESPONDED AGAI NST DISALLOWANCE AND REQUESTED FOR RECTIFICATION U/S 15 4 OF THE ACT. THE LD. ASSESSING OFFICER FRAMED ASSESSMEN T U/S 144 R.W.S. 147 OF THE ACT. THE LD. ASSESSING OF FICER MADE THE DISALLOWANCE IN RESPECT OF ESOPS EXPENSES AND DEDUCTION U/S 35DDA OF THE ACT TOWARDS PAYMENT UNDE R VOLUNTARY RETIREMENT SCHEME. DEPRECIATION ON SAP ITA NO. 4126/MUM/2015 MAHINDRA UGINE STEEL COMPANY LIMITED ( NOW MERGED WITH MAHINDRA CIE AUTOMOTIVE LTD. AS PER SCHEME OF AMALGAMATION ) 4 EXPENSES @ 60% AMOUNTING TO RS.83,05,188/- WAS ALSO MADE. THUS, AN EX-PARTE ASSESSMENT WAS MADE. LIKEWISE, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE ASSESSEE COULD NOT APPEAR AS THE NOTI CE OF HEARING WAS GIVEN FOR 03/03/2015. AS CLAIMED BY THE ASSESSEE, SINCE, THE CONCERNED PERSON WAS BUSY IN MERGER PROCEEDINGS, THEREFORE, HE COULD NOT APPEAR AND AN EX-PARTE ORDER WAS PASSED. CONSIDERING THE TOTAL ITY OF FACTS AND SINCE THE ASSESSMENT ORDER AS WELL AS THE IMPUGNED ORDERS ARE EX-PARTE ORDERS, THEREFORE, BY TAKING A LENIENT VIEW, AS NO PREJUDICE IS CAUSED TO EITHER SIDE, WE DEEM IT APPROPRIATE TO REMAND THIS APPEAL TO THE FILE OF THE FIRST APPELLATE AUTHORITY TO ADJUDICATE THE ISSUES AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVE N OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DI RECTED TO REMAIN VIGILANT IN FUTURE AND TO MAKE EFFECTIVE REPRESENTATION TO SUBSTANTIATE ITS CLAIM. IT IS MAD E CLEAR THAT IF THE ASSESSEE STILL REMAINS ABSENT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS FREE TO DECI DE IN ACCORDANCE WITH LAW. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 4126/MUM/2015 MAHINDRA UGINE STEEL COMPANY LIMITED ( NOW MERGED WITH MAHINDRA CIE AUTOMOTIVE LTD. AS PER SCHEME OF AMALGAMATION ) 5 FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 22/01/2018. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER S INGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER % MUMBAI; ( DATED : 22/01/2018 F{X~{T? P.S / /. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE RESPONDENT. 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI, 5. 3$4 .# , 0 *+' * 5 , % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. ! / BY ORDER, /! (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI