Indian Cable Net Co. Ltd., Kolkata V. A.C.I.T, Circle-1., Kolkata

ITA 433/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100265 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 02-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 2

Judgement Text

I.T.A. NO. 433/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 433/KOL/ 2013 ASSESSMENT YEAR: 2005-2006 INDIAN CABLE NET CO. LIMITED,...................... ..........................APPELLANT J-1/15, BLOCK-EP, 4 TH FLOOR, SALT LAKE ELECTRONIC COMPLEX, SECTOR-V, SALT LAKE CITY, KOLKATA-700 091 [PAN : AABCR 4726 Q] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ..................RESPONDENT CIRCLE-1, KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE & SHRI A.K. TEKRIWAL, A. R. , FOR THE ASSESSEE N O N E, FOR THE DEPARTMENT NATE OF CONCLUDING THE HEARING : DECEMBER 03, 2015 DATE OF PRONOUNCING THE ORDER : DECEMBER 09, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA D ATED 20.12.2012 FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF TRANSMISSION AND DISTRIBUTION OF CA BLE TV SIGNAL. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY IT DECLARING LOSS OF RS.1,62,84,776/-. IN THE ASSESSME NT COMPLETED UNDER I.T.A. NO. 433/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 6 SECTION 143(3) VIDE AN ORDER DATED 31.12.2007, THE TOTAL LOSS OF THE ASSESSEE-COMPANY WAS DETERMINED BY THE ASSESSING OF FICER AT RS.1,21,50,280/- AFTER MAKING, INTER ALIA, THE FOLLOWING THREE ADDITIONS:- (I) DIFFERENCE IN THE ACCOUNT OF M/S. STAR INDIA PV T. LTD....RS. 5,00,000/-; (II) DISALLOWANCE OUT OF VARIOUS EXPENSES.......... ..................RS.15,83,687/-; (III) PRIOR PERIOD EXPENSES........................ ..............................RS. 2,18,838/-. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED ALL THE A BOVE THREE ADDITIONS MADE BY THE ASSESSING OFFICER AND DISMISSED THE APP EAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS :- 1. THAT, THE ORDER PASSED BY THE LD. CIT (APPEALS)- XIV/KOLKATA ON 20.12.2012 IS BAD AND ILLEGAL. 2. THAT, THE LD. CIT{APPEALS) ERRED IN CONFIRMING T HE ADDITION OF RS.5,00,000/- MADE BY THE LD. ASSESSING OFFICER, UNILATERALLY ON THE BASIS OF I.T.S INFORMATION. THE APPELLANT PRAYS THAT THE ADDITION OF RS.5,00,00 0/- MADE IN RESPECT OF INCOME ALLEGED TO HAVE RECEIVED FROM STAR INDIA (P) LTD., BE DELETED. 3. THAT, THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE ESTIMATED DISALLOWANCE OF RS.L5,83,687/- BEING 25% OF THE EXP ENSES INCURRED UNDER THE HEADS REPAIRS & MAINTENANCE, TRAVELLING EXPENSES, VEHICLE HIRE CHARGES, AND SUND RY EXPENSES. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS.15, 83,687/- MADE OUT OF EXPENSES INCURRED UNDER THE HEADS REPAI RS & MAINTENANCE, TRAVELLING EXPENSES, VEHICLE HIRE CHAR GES, AND SUNDRY EXPENSES, BE DELETED. 4. THAT, THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF PRIOR PERIOD EXPENSES AMOUNTING TO RS.2,18,838/- . THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS.2,1 8,838/- MADE IN RESPECT OF PRIOR PERIOD EXPENSES BE DELETED . 3. AT THE TIME OF HEARING BEFORE US, NONE HAS APPEA RED ON BEHALF OF THE REVENUE. THIS APPEAL OF THE ASSESSEE IS, THEREFORE, BEING DISPOSED OF EX- I.T.A. NO. 433/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 6 PARTE QUA THE RESPONDENT DEPARTMENT AFTER HEARING THE LD. CO UNSEL FOR THE ASSESSEE AND PERUSING THE RELEVANT MATERIAL AVAILAB LE ON RECORD. 4. GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE IS GE NERAL IN NATURE, WHICH DOES NOT CALL FOR ANY SPECIFIC ADJUDICATION. 5. AS REGARDS THE ISSUE RAISED IN GROUND NO. 2 RELA TING TO THE ADDITION OF RS.5,00,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF THE AMOUNT ALLEGEDLY REC EIVED BY THE ASSESSEE FROM M/S. STAR INDIA PVT. LIMITED, IT IS OBSERVED T HAT THE ASSESSEE, AS PER THE INFORMATION OF THE ASSESSING OFFICER, WAS PAID A SUM OF RS.5,00,000/- BY M/S. STAR INDIA PVT. LTD. SINCE THE SAID AMOUNT WAS NOT DISCLOSED BY THE ASSESSEE AND THE EXPLANATION OFFERED BY THE ASS ESSEE IN THIS REGARD WAS NOT FOUND ACCEPTABLE BY HIM, THE ASSESSING OFFI CER TREATED THE AMOUNT OF RS.5,00,000/- ALLEGEDLY PAID BY M/S. STAR INDIA PVT. LTD. AS INCOME OF THE ASSESSEE AND ADDED THE SAME TO ITS TO TAL INCOME. THIS ADDITION WAS CONFIRMED BY THE LD. CIT(APPEALS) ON A CCOUNT OF THE FAILURE OF THE ASSESSEE TO FILE ANY CONFIRMATION LETTER FRO M M/S. STAR INDIA PVT. LIMITED IN SUPPORT OF ITS STAND THAT NO SUCH AMOUNT WAS ACTUALLY PAID BY THE SAID COMPANY. AS SUBMITTED BY THE LD. COUNSEL F OR THE ASSESSEE AT THE TIME OF HEARING BEFORE US, THIS ADDITION WAS MADE B Y THE ASSESSING OFFICER ON THE BASIS OF SOME INFORMATION RECEIVED BY HIM AB OUT THE AMOUNT OF RS.5,00,000/- PAID BY M/S. STAR INDIA PVT. LIMITED. ALTHOUGH THE ASSESSEE HAD NOT RECEIVED ANY SUCH SUM FROM M/S. STAR INDIA PVT. LIMITED, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO GET ANY CONFIRMATI ON FROM M/S. STAR INDIA PVT. LIMITED AND A REQUEST WAS, THEREFORE, MADE TO THE ASSESSING OFFICER TO GET THE INFORMATION AGAIN CROSS VERIFIED FROM TH E SAID PARTY. IT APPEARS THAT NEITHER THE ASSESSING OFFICER NOR THE LD. CIT( APPEALS), HOWEVER, HAS MADE ANY EFFORT TO GET THIS MATTER CROSS VERIFIED F ROM M/S. STAR INDIA PVT. LIMITED. WE, THEREFORE, CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GET THE MATTER OF PAYMENT BY M/S. STAR INDIA PVT. LIMITED TO THE ASSE SSEE CROSS VERIFIED FROM THE SAID PARTY IN ORDER TO FIND OUT EXACTLY TH E NATURE OF SUCH AMOUNT, I.T.A. NO. 433/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 6 IF AT ALL PAID BY THE SAID PARTY TO THE ASSESSEE AN D TO DECIDE THE ISSUE ACCORDINGLY. GROUND NO. 2 IS ACCORDINGLY TREATED AS ALLOWED. 6. AS REGARDS THE ISSUE INVOLVED IN GROUND NO 3 REL ATING TO THE DISALLOWANCE OF 25% MADE BY THE ASSESSING OFFICER O UT OF VARIOUS EXPENSES, IT IS OBSERVED THAT THE DISALLOWANCE OF 1 5% OUT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE VARIOUS HEADS WAS MADE BY THE ASSESSING OFFICER DUE TO THE FAILURE OF THE ASSESSE E TO ESTABLISH ON EVIDENCE THAT THE SAID EXPENSES WERE WHOLLY AND EXC LUSIVELY INCURRED FOR THE PURPOSE OF ITS BUSINESS. BEFORE THE LD. CIT(APP EALS), IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT NO PROPER OPPORTUNIT Y WAS ALLOWED BY THE ASSESSING OFFICER TO ESTABLISH ITS CASE ON THIS ISS UE DURING THE COURSE OF APPELLATE PROCEEDINGS. THE LD. CIT(APPEALS), HOWEVE R, DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE, AS ACCORDING TO HIM, SU FFICIENT OPPORTUNITY OF BEING HEARD WAS ALREADY GRANTED BY THE ASSESSING OF FICER. IT IS, HOWEVER, OBSERVED THAT THE RELEVANT DETAILS TO SHOW THAT SUF FICIENT OPPORTUNITY OF BEING HEARD WAS GIVEN BY THE ASSESSING OFFICER TO T HE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS ARE NOT GIVEN BY T HE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER AND THE SAME ARE ALSO NOT AVAILA BLE IN THE ASSESSMENT ORDER. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASS ESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD. GROUND NO. 3 IS ACCORDI NGLY TREATED AS ALLOWED. 7. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 4 RE LATING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF PRIOR PERIOD EXPENSES, I T IS OBSERVED THAT THIS DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER MERE LY ON THE GROUND THAT THE RELEVANT EXPENSES PERTAINED TO THE EARLIER YEAR. THE ISSUE AS TO WHETHER THE LIABILITY FOR THE SAID EXPENSES WAS CRY STALLIZED DURING THE YEAR UNDER CONSIDERATION WAS NOT EXAMINED BY THE AS SESSING OFFICER. AS I.T.A. NO. 433/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 6 SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESESE BEFORE THE LD. CIT(APPEALS) FILED ADDITIONAL EVIDENCE TO ESTABLISH ITS CASE THAT THE RELEVANT LIABILITY HAD CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION, BUT HE DECLINED TO ADMIT THE SAME ON THE GROUND THA T SUFFICIENT OPPORTUNITY WAS ALREADY GIVEN BY THE ASSESSING OFFI CER TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS ALR EADY OBSERVED BY US WHILE DECIDING GROUND NO. 2, THE RELEVANT DETAILS A RE NOT AVAILABLE EITHER IN THE ASSESSMENT ORDER OR IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) TO SHOW THAT SUFFICIENT AND PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. MOREOV ER, A PERUSAL OF THE RELEVANT PORTION OF THE ASSESSMENT ORDER ALSO SHOWS THAT THE ISSUE RELATING TO THE CRYSTALLIZATION OF THE LIABILITY, W HICH IS RELEVANT FOR THE PURPOSE OF DECIDING THE CLAIM OF THE ASSESSEE FOR P RIOR PERIOD EXPENSES, WAS NOT EXAMINED BY THE ASSESSING OFFICER. WE, THER EFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSU E AND RESTORE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DEC IDING THE SAME AFRESH AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPP ORTUNITY TO ESTABLISH THAT THE LIABILITY FOR THE RELEVANT PRIOR PERIOD EX PENSES WAS CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. GROUND NO. 4 IS AC CORDINGLY TREATED AS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 09, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 9 TH DAY OF DECEMBER, 2015 COPIES TO : (1) INDIAN CABLE NET CO. LIMITED, J-1/15, BLOCK-EP, 4 TH FLOOR, SALT LAKE ELECTRONIC COMPLEX, SECTOR-V, SALT LAKE CITY, KOLKATA-700 091 I.T.A. NO. 433/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 6 OF 6 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, KOLK ATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.