H.N. Steel Castings Pvt. Ltd., Una V. ITO, Una

ITA 44/CHANDI/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7678 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 10-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR
• Section: 144

Judgement Text

1 आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L D I V I S I O N B E N C H , ‘ A ’ , C H A N D I G A R H B E F O R E SH R I A . D . J A I N , V I C E P R E S I D E N T & SH R I V I K R A M S I N G H Y A D A V , A C C O U N T A N T M E M B E R आयकर अपील सं./ ITA No. 4 4 / C H D / 2 0 1 8 नधा रण वष / Assessment Year : 2 0 1 3 - 1 4 M/s H.N.Steel Casting (P), Ltd. VPO, Bathri, Teh. Haroli, Distt. Una Vs. बनाम The ITO, UNA थायी लेखा सं./PAN NO: AABCH6304C अपीलाथ /Appellant यथ /Respondent Hearing through video Conferencing नधा रती क ओर से/Assessee by : Sh. Ashwani Kumar, CA राज व क ओर से/ Revenue by : Smt. Priyanka Dhar, Sr.DR स ु नवाई क तार%ख/Date of Hearing : 12.09.2022 उदघोषणा क तार%ख/Date of Pronouncement : 13.09.2022 आदेश/Order Per A.D. Jain, Vice President: Th i s i s a n a pp ea l b y t he a ss e s se e a ga i ns t t h e or de r da t e d 31 . 10. 2 01 7 o f t he Ld . C o mm i ss i o ne r o f In c o m e T a x (A p pe al s) , P a l a m pu r [h er e i n r e fe r r e d to as ‘ CI T ( A ) ’] , f or a ss es s m e n t ye a r 20 1 3 - 1 4. 2. Th e f ol lo w i ng g ro u nd s h av e b e e n r a is e d i n t h is ap p e a l : - 1. The A.O. has erred both in law and facts in disallowing the Electricity Expenses of Rs. 32,60,648/- paid to Himachal Pradesh Electricity Board and Rs. 66,98,148/- on a/c of other administration Expenses as deduction under Profit & Loss on account of failure to produce any documentary evidence and books of account in support of our claim as 2 the addition for above referred expenditure is made as best judgement under section 144 of Income Tax Act, 1961. 2. The Assessee has stopped its business activities from mid of 2014 due to huge losses in business and shut down the plant. 3. The Assessee reserves the right to raise any other ground of Appeal at the time of hearing. 4.) The assessee denies penalty under section 271(1)(c ) of Income Tax Act, 1961 3. Th e L d. c ou n s el fo r t h e as se s se e s u b m i tt e d t h a t b o t h t he o rd e r s ar e e x- pa rt e; t h at , h o w e ve r, th e a ss e s s ee c o u l d no t pr e se nt i ts e l f e it he r be f or e t h e A O , or be fo r e t h e CI T( A ) , si n ce d ue t o h ug e l os se s i n t h e bu si n e s s a nd s hu t dow n o f t he a ss e s se e ’ s pl a nt , n o b u si n e s s a c t i v i t y c ou l d b e ca r r i ed ou t fr o m t h e mi d d le o f t he y e a r 20 1 4 . It h a s b e e n c on t e nd ed t ha t th e L d. CI T (A ) ha s di s mi s se d t he a ppe a l o f t he as se ss e e e x- pa rt e. It is r e q u e s te d t ha t i n t h e i nt e r e s t o f jus t i c e, th e m at t e r be re m i t t e d t o t he fi l e o f t h e A O t o d e c i d e i t a f r e s h o n me r i t s i n a cc or da nc e w i t h l a w a ft e r a ff ord i n g an op po r tu ni t y t o t he a s ses s e e a nd t ha t t he a ss e s se e sh a l l c o o p e r a t e in t h e fr e s h p r oc e e d i n g b ef or e t h e A O . . 4. Th e L d. D R, on t he ot h e r h an d, ha s s u b m i t t e d t hat th e a s s e ss e e d i d no t a p pe a r e i t h e r b e fo r e t h e A O o r b e f or e t he L d. C IT ( A ) , de sp it e d u e no t ic e s h a v i n g be e n i s su e d ; t h a t i t i s, t he r e f or e , c l ea r th a t th e as se ss e e w a s in n o mo o d t o c oo p e r a t e w it h t h e a ut ho ri t ie s bel ow ; an d t ha t , t he re fo re , th e r e b e i n g n o me r i t i n th e a pp e a l o f t he a ss e s se e , t h e sa m e b e or d e r e d t o b e d is m i ss e d. 3 5. H e a rd . It i s s e e n t ha t i n t h e a ss e s s m e n t o rd e r is d a t e d 3 1. 3. 2 01 6 , t he a sse ss ee i s s t a te d t o h a v e c on te nd e d t h a t du e to h u g e l o s s es i n bu si n e s s a n d s hu t d o w n o f i t s pl a nt , n o bu s in e s s a ct i v i t y w e re c a r r i e d on w . e . f. mi d d l e o f t he ye a r 2 0 1 4. 6. Be for e t h e L d. CI T ( A ), t he ass e s se e to ok t h e fol l o w i n g g r ou nd: - “ 1. T he L d. AO ha s e rre d i n l a w a nd f ac t s i n di s al l o wi ng t he e l e c t ri c i t y Ex pe ns e s o f R s. 32, 6 0, 6 4 8 / - p ai d t o H i m ac ha l Pr a de sh el e ct ri c i t y B o a r d a nd Rs. 66, 9 8, 14 8/ - o n a / c of o t h e r a dm i n i st ra t i on E x pe ns e s a s de d uc t i on u nd er p rof i t & L os s A c co un t o n ac c o u nt o f f ai l u re t o p r od u c e an y doc um e n t a r y e v id e n c e a n d b oo ks o f a c co un t in s up po rt o f ou r cl a i m a s t he a d d i t i o n f or th e a bo v e r e f e r re d e xp e n di t u re i s m ad e a s be s t ju dg e m e n t u n de r se c t i o n 1 4 4 of t h e Inc om e T ax A ct , 19 61 . T h e a ss e s se e ha d sto pp e d hi s ac t iv i t i e s f r om m i d o f 2 0 14 du e to h u ge lo ss e s i n b u si ne ss a nd sh ut d o wn t h e pl a nt . ” 7. F ro m th e l a st s e nt e nc e o f t h e a b ov e gr ou nd, i t is cl e a r th at t h e a ss e s se e ha d st a te d be fo re t he L d. CI T ( A ) t ha t i t ha s s t o p pe d i t s a c t iv it y fr o m th e m i dd l e o f t h e y e a r 2 0 14 d ue t o h u g e l o s s es i n b u si n e s s a n d sh u t do w n o f p l a nt . Th e L d. C I T (A ), h ow e ve r, ha s n o t t a ke n i nt o c on s i d e r a t i o n th i s c o nt en t i o n o f t h e a ss e ss e e. 8. P er co nt ra , a s a v a i l a b l e fro m p a r a 6 o f t he i m pu g ne d ord er , t h e L d. C I T (A ) h as m a d e m e n t i o n o f t h e n o ti c e o f h e a rin g h a v in g b e e n se n t t o t he ad dr e s s o f th e a s se ss e e, a s m e nt i on e d i n F o rm N o . 3 5. Th er e i s n o re c i t a l , t ho ug h , o f suc h no t i c e h a v i n g be e n i s su e d . M or e o ve r, i t i s t r i t e 4 l a w t ha t e ve n in t h e a b s en ce o f t h e a s se s se e , i t i s i n c u m b e n t o n t he Ld . CI T( A ) t o d e c i d e t he a p pe a l on me r i t s. T h i s h as no t be e n d o n e a n d t he a pp e a l ha s be e n di s mi sse d e x - p a rt e qu a t he a s se ss e e. 9. Be for e u s t o o, t he fo ll ow i n g gr ou n d N o. 2 h a s b e en ta k e n : - “ 2. T he a ss e s se e h a s s t o p p e d i t s b usi ne ss ac t i v i t i e s f r om m i d of 20 1 4 du e t o h ug e l o sse s in bu si ne ss a nd s h u t dow n of t h e pl a n t . ” 10 . Th i s g ro u n d r ei t e r a te s t h e s t a nd o f t he ass e s see t h at i t h a d st o p pe d i t s b u s i n e s s a c t iv it y fr o m t he m i d dl e o f 2 01 4 d u e t o h u ge l o s s es i n t h e bu si n e s s an d sh u t d ow n o f pl a n t . F ur t h e r, a s p e r rep or t d a t e d 29 . 8. 20 22, se nt t o th e I nc o m e T a x O ff ic e r, U na , th e A R o f t h e IT A T Ch an di g a r h Be nc h, Ch a n d i ga rh ha s s t a t e d t ha t t he T ri bu na l o r de r d a t e d 4. 8 . 202 2 ( w he re by i n M . A . N o . 14 2 / C ha n d i -2 0 1 8 th e ca s e w a s r ec a l l e d a nd f i x e d f or h ea r i n g) , w a s fo r w ar de d t o t he a s se sse e’ s a d dr e s s g i v e n i n t he m e mo r a nd u m o f a p p e a l b ut t h e s a m e ha d b e en re c ei v e d b a c k un de l iv er e d w i th t h e f ol l ow i ng r e m a rk : - “ is n aam k i f a c t o ry b and o f ch uk i h ai . ” 11 . F ro m t h e a b ov e, i t i s a m p l y cl e ar t h at it w as du e t o th e c l o s ur e o f a ss e s se e ’ s b us i n e s s ac t i v i t y , t h a t th e a ss e s se e c o ul d no t pr e se n t i t se l f be f or e t h e A O or th e L d. CI T( A ), i n t h e fa c t s c ir cums t a nc e s, t h e i n t e r e s t o f j us t i c e r e q u i r e s t ha t t he a ss e s se e b e pr o v i de d opp or t u n i t y t o p r e s en t i t s ca se b e fo r e t h e A O . F o r t hi s p u rp ose , t he ma t t er i s re mi t t e d to t h e fi l e o f t h e A O . T h e A ss es si n g O f fi c e r sh a l l p r o vide d ue a n d a de qu a t e 5 op po r t u ni t y o f he a ri n g t o th e a ss e s se e . T h e a ss e ss ee , n o d ou b t , s ha l l c oo p e ra te in t h e f re s h pr oc e e d i n gs b e fo r e t h e A s se ssi n g O ff i ce r. T h e A sse s si ng O f fi c e r sh al l r e fr a me t h e a ss es s m e n t t he re up on i n a cc o r da nc e w it h l a w . O rde r e d ac c or d i ngl y. 12 . In t he r e su l t, fo r st a t i st i c a l p u r po se s , t he a pp ea l o f t h e a s se s se e i s t re a t e d a s a l l o w ed . O r de r p ro n o u n c e d on 1 3. 09 . 2 02 2 Sd/- Sd= (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 13.09.2022 “ आर.के .” आदेश क त,ल-प अ.े-षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु 2त/ CIT 4. आयकर आय ु 2त (अपील)/ The CIT(A) 5. -वभागीय त न7ध, आयकर अपील%य आ7धकरण, च9डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar