DCIT 9(1)(2), MUMBAI V. ARTEK SURFIN CHEMICLS P.LTD, MUMBAI

ITA 4415/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0598 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 22-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: LALCHAND CHOUDHARY

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NOS.4415 /MUM/2015 ASSESSMENT YEARS: 2011-12 DY CIT 9(1)(2) MUMBAI / VS. M/S. ARTEK SURFIN CHEMICALS LTD. PLOT NO.121, SURFIN CENTRE, MAROL CO-OPERATIVE INDUSTRIAL ESTATE, M V ROAD, ANDHERI (E) MUMBAI 400 059 ( / REVENUE) ( !' /ASSESSEE) P.A. NO. AAACA3374Q ITA NOS.4417 /MUM/2015 ASSESSMENT YEARS: 2011-12 DY CIT 9(1)(2) MUMBAI / VS. M/S. ARTEK EXPORTS PRIVATE LIMITED. PLOT NO.301,MAROL BHAVAN, MAROL CO-OPERATIVE INDUSTRIAL ESTATE, M V ROAD, ANDHERI (E) MUMBAI 400 059 ( / REVENUE) ( !' /ASSESSEE) P.A. NO. AABCC1123A 2 / REVENUE BY SHRI V VIDHYADHAR DR !' / ASSESSEE BY SHRI LALCHAND CHOUDHARY # $ % '& / DATE OF HEARING : 06/02/2018 % '& / DATE OF PRONOUNCEMENT 06/02/2018 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE WITH RESPECT OF DIFFERENT ASSESSEES FOR A.Y. 2011-12 CHALLENGING TH E ORDERS OF THE LEARNED FIRST APPELLATE AUTHORITY, BOTH DATE D 28.04.2015. 2. IN ITA NO. 4415/MUM/2015 PERTAINS TO THE CONCLUS ION BY THE LEARNED CIT(A) THAT NO INQUIRIES WERE MADE D URING ASSESSMENT PROCEEDINGS WITHOUT APPRECIATING THAT TH E ASSESSEE BOOKED EXPENSES RELATING TO AEPL. 3. IN ITA NO.4417/MUM/2015 THE IMPUGNED ORDER HAS BEEN CHALLENGED WHEREIN IT WAS HELD THAT ASSESSING OFFICER FAILED TO PROVIDE OPPORTUNITY TO THE ASSESSEE BEFOR E INVOKING THE PROVISIONS OF SECTION 145(3) IGNORING THAT ADEQ UATE OPPORTUNITY OF HEARING WAS PROVIDED TO THE ASSESSEE AND FURTHER DID NOT APPRECIATE THE PROVISIONS OF SECTIO N 10AA(9) 3 R.W.S 80IA(10) APPLICABLE TO THE FACTS OF THE PRESE NT APPEAL AND WORKING OF THE DEDUCTION ACCORDINGLY. 4. DURING HEARING THE LEARNED DR INVITED OUR ATTENT ION TO VARIOUS PARAS OF THE ASSESSMENT ORDER AS WELL AS TH E IMPUGNED ORDERS. IT WAS CLAIMED THAT THE ASSESSEE COMPANY BOOKED VARIOUS EXPENSES, WHICH ACTUALLY PERTAINED T O AEPL AND THE DETAILS OF ALLOCATION OF EXPENSES OF BOTH A SCL AND AEPL WERE NOT FILED. OUR ATTENTION WAS INVITED TO THE OBSERVATION MADE IN PARA 4.3 ONWARDS OF THE ASSESSM ENT ORDER (ITA NO.4415/M/2015). SIMULTANEOUSLY, OUR ATTENTION WAS INVITED TO THE OBSERVATION MADE IN PA RA 3.5 AND 3.7 (PAGE 11) OF THE IMPUGNED ORDER. IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LEARNED CIT(A) GAVE OPPORTUNITY TO THE ASSESSING OFFICER WH ICH WAS NOT AVAILED THEREFORE, THERE IS NO MISTAKE IN THE F INDING OF THE LEARNED CIT(A) AND THE CLAIMED RELIEF WAS DENIE D BY THE LEARNED ASSESSING OFFICER MERELY ON THE BASIS OF DO UBT. IT WAS ALSO CLAIMED THAT THE SHARE HOLDERS/ DIRECTORS OF BOTH THE ASSESSEES ARE DIFFERENT THEREFORE THE OBSERVATI ON MADE IN THE ASSESSMENT ORDER IS INCORRECT. 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED IN PA RA 4.3 (ITA NO.4415/M/2015) THAT THERE IS OBSERVATION BY THE LE ARNED ASSESSING OFFICER THAT BOTH THE ASSESSEES ARE SISTE R CONCERN AND VARIOUS EXPENSES CLAIMED IN AEPL ACTUALLY PERTA INED TO SISTER CONCERN AND THE DETAILS OF ALLOCATION OF EXP ENSES OF BOTH THE ASSESSEES SUCH AS ADVERTISEMENT AND SALES PROMOTION EXPENSES, DIRECTORS REMUNERATION ETC., W ERE NOT PROPERLY BOOKED. IN PARA 4.4 THE CLAIM OF THE ASSE SSEE WAS CONTRADICTED WITH RESPECT TO EMPLOYEES ALSO BY THE LEARNED ASSESSING OFFICER. THERE IS OBSERVATION IN PARA 4. 4 (B) OF THE ASSESSMENT ORDER THAT THERE ARE OTHER 126 EMPLOYEES AT THE HEAD OFFICE OF THE ASSESSEE, WHO LOOKS AFTER THE OT HER DEPARTMENTS ALSO AND HAS ALSO COMPARED THE TURNOVER . THERE IS FURTHER OBSERVATION THAT HEAD OFFICE OF BO TH THE COMPANIES IS LOCATED AT SAME PREMISES WHEREAS IN TH E IMPUGNED ORDERS THERE IS CONTRADICTORY FINDING AND IT HAS BEEN MENTIONED IN PARA 3.8 THAT NO FIELD INQUIRIES WERE CONDUCTED BY THE LEARNED ASSESSING OFFICER AND THE ADDITION WAS MADE MERELY ON THE BASIS OF SUSPICION. CONSIDE RING THE TOTALITY OF FACTS, WE DEEM IT APPROPRIATE THAT BOTH THE APPEALS BE SENT TO THE FILE OF THE LEARNED ASSESSIN G OFFICER TO 5 EXAMINE THE CLAIM OF THE ASSESSEE AFRESH AND DECIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVEN OPPORTU NITY OF BEING HEARD WITH FURTHER LIBERTY TO SUBSTANTIATE IT S CLAIM WITH DOCUMENTARY EVIDENCE, IF ANY, THUS BOTH THE AP PEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES ON LY. FINALLY THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 6 TH FEBRUARY, 2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; + DATED : 06 /02/2018 SA %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 # 3' , ( ,- ) / THE CIT, MUMBAI. 4. 2 2 # 3' / CIT(A)- , MUMBAI 5. 56 0' , 2 ,-& , , # $ / DR, ITAT, MUMBAI 6. 7 8$ / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI