AKSHAR COMMUNICATION P. LTD, MUMBAI V. ITO 6(1)(2), MUMBAI

ITA 4616/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2758 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-12-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 08-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OZHA
• Assessee Lawyers: A V SONDE
• Keywords: Depreciation; Opportunity of being heard; Set aside
• Section: 143(3); 14A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI R.V. EASWAR, SR. VP & SHRI R.K. PANDA, AM I.T.A. NO. 4616/MUM/08 (ASSESSMENT YEAR 2000-01) I.T.A. NO. 4617/MUM/08 (ASSESSMENT YEAR 2000-01) I.T.A. NO. 4618/MUM/08 (ASSESSMENT YEAR 2002-03) I.T.A. NO. 4619/MUM/08 (ASSESSMENT YEAR 2002-03) M/S. AKSHAR COMMUNICATION PVT. LTD. 7/8, PANDURANG BUILDING, L.J. ROAD, MAHIM (WEST) MUMBAI-400 016 PAN:AABCA1757A VS. I.T.O. WARD 6(1)-2 503, 5 TH FLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI-400 020 APPELLANT RESPONDENT APPELLANT BY: SHRI A.V. SONDE RESPONDENT BY: SHRI VIRENDRA OZHA O R D E R DATE OF HEARING: 01.12.2009 DATE OF ORDER: 04.12.2009 PER R.K. PANDA, AM: THE ABOVE FOUR APPEALS FILED BY THE ASSESSEE ARE D IRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A)-VI, MUMBAI FOR TH E A.Y. 2000-01 AND 2002-03 AS MENTIONED ABOVE. FOR THE SAKE OF CONVEN IENCE THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS COMMON ORDER. I.T.A. NOS. 4617 & 4619/MUM/08 : 2. THERE IS A DELAY OF 283 DAYS IN FILING OF APPEAL IN THE CASE OF I.T.A. NO. 4617/MUM/08. THE ASSESSEE HAS FILED A CONDONAT ION PETITION ALONG WITH AN AFFIDAVIT EXPLAINING THE REASONS FOR THE DE LAY. AFTER HEARING BOTH M/S. AKSHAR COMMUNICATION PVT. LTD. ========================= 2 THE SIDES AND AFTER CONSIDERING THE REASONS EXPLAIN ED IN THE AFFIDAVIT, THE DELAY IN FILING OF THE APPEAL IN I.T.A. NO. 4617/MU M/08 IS CONDONED. 3. IN I.T.A. NO. 4617/MUM/08 THE ASSESSEE HAS CHALLENG ED THE ORDER OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF INT EREST OF RS.5,51,340 BY THE ASSESSING OFFICER ON ACCOUNT OF DIVERSION OF FU NDS TO SISTER CONCERNS. IN I.T.A. NO. 4619/MUM/08 THE ASSESSEE HAS CHALLENG ED THE ORDER OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.84,199 UNDER THE PROVISIONS OF SECTION 14A AND THE DISALLOWANCE OF INTEREST OF RS.9,38,327 ON ACCOUNT OF DIVERSION OF FUNDS TO SISTER CONCERNS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO PROPER OPPORTUNITY OF HEARING WAS GIVEN BY THE CIT(A) WHO IN AN EX-PARTE ORDER PASSED FOR BOTH THE ASSESSMENT YEARS HAS CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER. HE ACCORDINGLY SUBMITTED THAT IN THE INTEREST OF JUSTICE THE MATTERS MAY BE SET ASIDE TO THE FILE OF THE CIT(A) FOR DECIDING THE ISSUES AFRESH AFTER GIVING DUE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 5. THE LEARNED DR, ON THE OTHER HAND, WHILE SUPPORTING THE ORDERS OF THE CIT(A) ULTIMATELY AGREED THAT HE HAS NO OBJECTI ON IF THE MATTER IS RESTORED BACK TO THE FILE OF THE CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS MADE BY BOT H THE SIDES, WE FIND ALTHOUGH TWO OPPORTUNITIES WERE GIVEN BY THE C IT(A), THE ASSESSEE TOOK ADJOURNMENT ON ONE OCCASION AND THERE WAS NO C OMPLIANCE IN THE SECOND OCCASION FOR WHICH THE CIT(A) HAS PASSED AN EX-PARTE ORDER AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFIC ER. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERE ST OF JUSTICE, WE ARE OF THE OPINION THAT ONE MORE OPPORTUNITY SHOULD BE GIVEN T O THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE CIT(A). WE, THEREFOR E, RESTORE THE ABOVE TWO APPEALS TO THE FILE OF THE CIT(A) FOR FRESH ADJUDIC ATION AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOL D AND DIRECT M/S. AKSHAR COMMUNICATION PVT. LTD. ========================= 3 ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE AR E ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NOS. 4616 & 4618/MUM/08 (A.YS. 2000-01 & 2002-03): 7. THE ASSESSEE IN THE ABOVE TWO APPEALS HAS CHALLENGE D THE ORDER OF THE CIT(A) CONFIRMING THE ORDER OF THE ASSESSING OF FICER IN REFUSING TO RECTIFY ASSESSMENT ORDER U/S. 154 OF THE INCOME-TAX ACT, 1961 (THE ACT). 8. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSING OFFICER IN THE ORDER PASSED U/S. 143(3) OF THE ACT DID NOT ALLOW D EPRECIATION ON THE GROUND THAT THE SAME WAS NOT CLAIMED BY THE ASSESSE E. SIMILARLY, HE DISALLOWED INTEREST OF RS.5,51,340 DURING A.Y. 2000 -01 (RS.9,38,328 FOR A.Y. 2002-03) ON ACCOUNT OF INTEREST BEARING FUNDS DIVERTED TO SISTER CONCERNS FREE OF INTEREST. THE ASSESSEE MOVED A RE CTIFICATION PETITION U/S. 154 OF THE ACT BEFORE THE ASSESSING OFFICER REQUEST ING HIM TO ALLOW DEPRECIATION OF RS.2,56,054 FOR A.Y. 2000-01 AND UN ABSORBED DEPRECIATION OF RS.21,72,741 UP TO A.Y. 1999-2000, DEPRECIATION OF RS.1,73,330 FOR A.Y. 2002-03 AND UNABSORBED DEPRECI ATION OF RS.11,11,670/-. SIMILARLY THE ASSESSEE REQUESTED T O ALLOW THE INTEREST DISALLOWED IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S.A. BUILDERS, 288 ITR 1 (SC). THE ASSESSI NG OFFICER REJECTED THE RECTIFICATION PETITIONS ON THE GROUND THAT THERE IS NO APPARENT MISTAKE IN THE ASSESSMENT ORDER. 9. IN APPEAL, THE CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSE E IS IN APPEAL BEFORE US. 10. AFTER HEARING BOTH THE SIDES WE FIND THE ISSUES INV OLVED IN THE RECTIFICATION PETITIONS ARE DEBATABLE ISSUES. IT I S NOW SETTLED LAW THAT DEBATABLE ISSUES CANNOT BE RECTIFIED UNDER THE PROV ISIONS OF SECTION 154 OF THE ACT. THEREFORE, THE CIT(A), IN OUR OPINION, IS JUSTIFIED IN DISMISSING THE M/S. AKSHAR COMMUNICATION PVT. LTD. ========================= 4 APPEAL FILED BY THE ASSESSEE AGAINST THE REFUSAL OF THE ASSESSING OFFICER TO RECTIFY THE ORDERS U/S. 154 OF THE I.T. ACT. 11. IN THE RESULT, I.T.A. NOS. 4617 & 4619/MUM/08 ARE A LLOWED FOR STATISTICAL PURPOSES AND I.T.A. NOS. 4616 & 4618/MU M/08 ARE DISMISSED. ORDER PRONOUNCED ON 4 TH DECEMBER, 2009. SD/- (R.V. EASWAR) SR. VICE PRESIDENT SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED 4 TH DECEMBER, 2009 COPY TO: (1) THE APPELLANT, (2) THE RESPONDENT, (3) THE CIT (A)-VI, MUMBAI, (4) THE CIT, CITY-6, MUMBAI, (5) THE DR, A BENCH, ITAT, MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI TPRAO