M/s Banshidhar Tobacco (P) Ltd., Kanpur V. Dy. Commissioner of Income Tax-VI, Kanpur

ITA 486/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4839 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 14A; 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.486/LKW/2015 ASSESSMENT YEAR 2012-13 THE DCIT-6, KANPUR VS M/S BANSHIDHAR TOBACCO (P) LTD. 51/18, RAMGANJ, KANPUR. PAN AAACB 7884 J (RESPONDENT) (APPELLANT) SHRI ASHOK SETH, CA APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 04/01/2016 DATE OF HEARING 07/01/2016 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-II, KANPUR, INTERALIA ON FOLLOWING GROUNDS WHICH ARE AS UNDER: (1) THAT THE EX PARTE ORDER PASSED BY THE LD. CI T (APPEALS-II) KANPUR IS BAD IN LAW AND CONTRARY TO THE PRINCIPLES OF NATURA L JUSTICE AND EQUITY HENCE LIABLE TO BE QUASHED. (2) THE LD. CIT (APPEALS-II) HAS FAILED TO PROVIDE A REASONABLE & SUFFICIENT OPPORTUNITY TO THE APPELLANT. (3) THE LD. CIT (APPEALS-II) KANPUR HAS ERRED IN LA W AND ON FACTS TO CONFIRM THE ADDITION MADE BY LD. AO ON ACCOUNT OF D ISALLOWANCE OF WAGES OF RS. 1541076/- U/S 40A(IA) OF THE INCOME TAX ACT, 1961, IGNORING THE FACT THAT THAT WAGES PAYMENTS WERE MAD E BY APPELLANT TO THE SENIOR MEMBER OF THE FAMILY TO DISTRIBUTE IT AMONG THE FAMILY MEMBERS OF THEIR OWN FAMILY TO AVOID ADMINISTRATIVE INCONVENIENCE. BUT LD. CIT (APPEALS-II) KANPUR ALSO TREATED THESE PA YMENTS AS THEY WERE MADE TO CONTRACTORS AS DEFINED U/S 194C OF THE ACT AND CONFIRM THE ADDITION ON THE BASIS OF NON DEDUCTION OF TAX A T SOURCE THEREFORE ORDER PASSED BY THE LD. CIT (APPEALS-II) KANPUR IS D ESERVES TO BE QUASHED. 2 (4) THE LD. CIT (APPEALS-II) KANPUR HAS ERRED IN LA W AND ON FACTS TO CONFIRM THE ADDITION MADE BY LD. AO ON ACCOUNT OF D ISALLOWANCE OF RS. 158011/- BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULES 8D, IGNORING THE FACT THAT THESE IN VESTMENTS WERE MADE BY APPELLANT FROM ITS OWN SOURCES AND NOT FROM BORROWED FUNDS AND NO EXEMPTED INCOME HAD BEEN EARNED BY THE APPELLANT ON THESE INVESTMENTS THEREFORE ORDER PASSED BY THE LD. CIT (APPEALS-II) KANPUR DESERVES TO BE QUASHED. (5) THAT APPELLANT CRAVES LEAVE TO ADD, AMEND, MOD IFY OR DELETE ANY OF THE GROUNDS BEFORE OR DURING THE APPELLATE PROCEEDI NGS. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE HAS CONTENDED THAT THE CIT(A) HAS ADJUDICATED THE APPEAL OF THE ASSESS EE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD. LD. COUNSEL FOR THE ASS ESSEE ALSO DRAWN OUR ATTENTION TO THE ORDER OF THE CIT(A) WITH THE SUBMISSION THAT IN HIS ORDER, CIT(A) HAS NOT GIVEN ANY SPECIFIC FINDING WITH REGARD TO THE PROPER OPPORTUN ITY AFFORDED TO THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THE MATTER BE RESTORED TO HIS FILE FOR ADJUDICATION OF THE APPEAL ON MERIT. 3. LD. DR PLACED RELIANCE UPON THE ORDER OF THE CIT (A). 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE CIT(A ), WE FIND FORCE IN THE CONTENTION OF THE ASSESSEE. SINCE THE CIT(A) HAS DI SPOSED OF THE APPEAL WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE WITH THE DIRECTION TO READJUDICATE THE APPEAL AFRESH ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 07 JANUARY, 2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR