Kamdenu Steels, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 5023/DEL/2015

• Counselvise Citation: 502320114 RSA 2015
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 29-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: MUKESH LAL
• Keywords: Opportunity of being heard

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5023/DEL/2015 A.Y. : 2010-11 M/S KAMDHENU STEELS VS. INCOME TAX OFFICER, 16, MAHARAJA AGARSEN MARG, WARD 1(3), COURT ROAD, MUZAFFARNAGAR -251001 (UP) MUZAFFARNAGAR UTTAR PRADESH 251001 (PAN : AAFFK3939H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. MUKESH LAL, ADV. DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR DATE OF HEARING : 29-10--2015 DATE OF ORDER : 29-10-2015 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-MUZAFFARNAGAR PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND THE LGAL PROVISIONS, THE LD. CIT(A) HAS ERRED IN SUSTAINING T HE DISALLOWANCE OF PAYMENT OF THE GODOWN RENT OF RS. 1,20,000/-. THE LD. CIT(A) H AS NOT CONSIDERED THE FACT THAT MAINTAINING A GODOWN IN STEEL GOODS TRAD ING BUSINESS IS NOT ONLY A LEGAL NECESSITY FROM THE POINT OF VIEW OF THE COMM ERCIAL TAX DEPARTMENT BUT IS A NECESSARY REQUIEMENT FOR CARRYING ON THE BUSIN ESS, AS ONCE RELEASED, 2 ANOTHER GODOWN CANNOT BE HIRED IN CASE OF FUTURE NE EDS. THE GODOWN RENT PAYMENT OF RS. 1,20,000/- DESERVES TO BE ALLOWED. 2. THAT THE APPELLANT MAY KINDLY BE ALLOWED TO RAISE ANY OTHER GROUND OF APPEAL DURING THE COURSE OF HEARING OF APPEAL. 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 4. LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE AO HAS WRONGLY OBSERVED THAT THE ASSESSEE HAS ADMITED THAT THE GODOWN WAS N EVER USED IN THE PAST FOR STORING THE STEEL GOODS TRADED BY HIM. THIS OBSERVA TION OF THE AO IS TOTALLY WRONG AND INCORRECT. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS STOCK REGISTERS OF EARLIER YEARS WERE PRODUCED BEFORE HIM TO ESTABLISH THAT THE GODOWN WAS USED FOR THE STORAGE OF TRADED GOODS ALONGWITH THE COPIES OF THE STOCK REGISTERS OF EARLIER YEARS AND THE COPIES OF THE RESPECTIVE LABOUR/LOAD ING AND UNLOADING ACCOUNT. THEREFORE, HE REQUESTED THAT THE ADDITION OF RS. 1.2 0 LACS MAY BE ALLOWED. 5. LD. DR OPPOSED THE REQUEST OF THE LD. COUNSEL OF THE ASSESSEE AND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES ON THE ISSUE IN DIS PUTE AND PERUSED THE RELEVANT RECORDS, ESPECIALLY THE ORDERS PASSED BY THE REVENU E AUTHORITIES. I FIND THAT ASSESSING OFFICER HAS DISALLOWED THE CLAIM BY STATI NG THAT THE ASSESSEE HAD CLAIMED EXPENSES OF RS. 1,20,000/- RELATING TO GODOWN RENT A T MUZAFFARNAGAR AND PAYMENTS WERE MADE BY CHEQUES. THE ASSESSEE ITSELF ADMITTED THAT GODOWN WAS 3 SHOWN ONLY TO GET REGISTRATION UNDER UP COMMERCIAL TAX ACT, 1957 AT MUZAFFARNGAR AND IN SUBMISSION DATED 1.2.2013 AND ADMITTEDLY WAS NEVER USED FOR TRADING ACTIVITIES, BECAUSE TRADING ACTIVITIES CARRIED ON F ROM GHAZIABAD. IT WAS ALSO OBSERVED BY THE AO THAT ASSESSEE OBTAINED LOAN FACI LITIES FROM MUZAFFARNAGAR BANK BY SHOWING SAID GODOWN. HOWEVER, LD. CIT(A) IN HIS FINDING HAS HELD THAT THE FACT ON RECORD IS THAT THE ASSESSEE HAS NOT BEEN ESTABL ISH THAT PAYMENT OF RENT OF GODOWN WAS WHOLLY AND EXCLUSIVELY INCURRED TOWARDS BUSINESS PURPOSE. NO DETAILS AND EVIDENCES HAVE BEEN FURNISHED TO ESTAB LISH THE BUSINESS NEXUS OF GODOWN RENT PAID AT RS. 1,20,000/-. FROM THE ABOVE , THUS IT IS CLEAR THAT THERE IS A CONTRADICTION IN THE OBSERVATION MADE BY THE AO AS WELL AS IN THE FINDING OF THE LD. CIT(A). I AM OF THE CONSIDERED VIEW THAT IN THE W RITTEN SUBMISSIONS BEFORE THE LD. CIT(A), ASSESSEE HAS STATED THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS STOCK REGISTERS OF EARLIER YEARS WERE PRODUCED BEFO RE HIM TO ESTABLISH THAT THE GODOWN WAS USED FOR THE STORAGE OF TRADED GOODS. CO PIES OF THE STOCK REGISTERS OF EARLIER YEASR ALONGWITH COPIES OF THE RESPECTIVE LA BOUR/LOADING & UNLOADING WERE PRODUCED BEFORE THE REVENUE AUTHORITIES. IN VIEW OF THIS, FINDING OF THE REVENUE AUTHORITIES ARE CONTRADICTORY, THEREFORE, IN THE IN TEREST OF JUSTICE, WITHOUT COMMENTING UPON THE MERITS OF THE CASE, THE ISSUE I N DISPUTE REQUIRES TO BE THOROUGHLY EXAMINED AT THE LEVEL OF THE AO WITH THE DIRECTIONS TO DECIDE THE ISSUE IN 4 DISPUTE AFRESH, UNDER THE LAW, AFTER GIVING ADEQUAT E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, ESPECIALLY AFTER EXAMINING ALL THE DO CUMENTARY EVIDENCES FILED BY THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/10/2015 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 29/10/2015 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 5