KONKAN RAILWAY CORPORATION LTD, NAVI MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-15(2), MUMBAI

ITA 5171/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8054 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 04-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CIR CUMSTANCES OF S CASE
• Assessee Lawyers: NEHA PARANJPE AR SHRI
• Keywords: Opportunity of being heard
• Section: 43B; 142(1); 115JB; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI B. R. BASKARAN , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5171 / MUM/ 20 1 7 ( / ASSESSMENT YEAR: 2009 - 10 ) M/S. KONKAN RAILWAY CORPORATION LTD. BELAPUR BHAVAN, SECTOR - 11, CBD BELAPUR, NAVI MUMBAI - 400614 . / VS. DCIT CC - 15( 2), MUMBAI ./ ./ PAN/GIR NO. : AAACK 3725 H ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 01 . 11 .201 8 / DATE OF PRONOUNCEMENT : 20. 12 . 2018 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESEN T APPEAL AGAINST THE ORDER DATED 13 . 12 .201 6 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 24 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2009 - 1 0 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIR CUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PASSING AN EX - PARTE ORDER WITHOUT AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE APPELLANT. ASSESSEE BY : SHRI K. GOPAL & MS. NEHA PARANJPE (AR) REVENUE B Y: SHRI B. SRINIVAS ( D R ) ITA. NO.5171M /201 7 A.Y. 20 09 - 10 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN MAKING AN ADDITION OF RS.491,04,00,000 / - AS ALLEGEDLY NON - RECOGNIZED INCOME IN RESPECT OF INTEREST PAYABLE TO MINISTRY OF RAILWAYS ON LOAN GIVEN TO THE APPELLANT MERELY ON THE ASSUMPTION THA T THE OUTSTANDING INTEREST OF KS.491 - 04 CR HAS BEEN CONVERTED INTO PREFERENCE SHARE CAPITAL NEED NOT BE PAID. 3. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX (APPE ALS) ERRED IN MAKING THE ADDITION OF RS.491,04,00,000/ - AS INCOME WITHOUT CONSIDERING THE FACT THOUGH THE APPELLANT HAS NOT DEBITED THE INTEREST ACCOUNT IN THE PROFIT & LOSS ACCOUNT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD COMMISSIONER OF I NCOME TAX (APPEALS) ERRED IN ADDING THE OUTSTANDING INTEREST AMOUNTING TO RS.491,04,00,000/ - CONVERTED INTO PREFERENCE SHARE CAPITAL DURING THE YEAR UNDER CONSIDERATION, NOT DEBITED TO PROFIT & LOSS ACCOUNT DURING THE CURRENT FINANCIAL YEAR, CANNOT BE ADDE D TO THE RETURNED LOSS DECLARED BY THE APPELLANT. 5. THE APPELLANT CRAVES LEAVES TO ADD, TO AMEND, ALTER, MODIFY AND OR WITHDRAW ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, EACH OF WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT PRAYS THE HON'BL E TRIBUNAL TO DELETE THE ADDITION/DISALLOWANCES MADE BY THE LD. ASSESSING OFFICER, WHICH IS CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RE TURN OF INCOME ON 30 .09.20 09 DECLARING TOTAL LOSS INCOME TO THE TUNE OF RS.65,67,08,267/ - . THEREAFTER, THE ASSESSMENT WAS COMPLETED U/S 143(3)(II) OF THE I.T. ACT, 1961 DETERMINING TOTAL LOSS TO THE TUNE OF RS.27,06,98,379/ - . THEREAFTER, THE INCOME OF THE ASSESSEE WAS RECTIFIED BY VIRTUE OF OR DER U/S 154 OF THE ACT DATED 02.11.2012 AT LOSS TO THE TUNE OF RS.24,06,32,324/ - AFTER ADDING UNPAID LEAVE SALARY U/S 43B OF THE ACT AT RS.3,00,66,050/ - . THEREAFTER, THE ASSESSMENT WAS REOPENED ITA. NO.5171M /201 7 A.Y. 20 09 - 10 3 U/S 148 OF THE ACT AND NOTICES U/S 1 43(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPO N THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING OF RAILWAY SERVICE AND CONSTRUCTION OF RAILWAY LINE AND OTHER RELATED PROJECTS. THEREAFTER, THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED ASSESSING THE INCOME TO TH E TUNE OF RS.140,09,30,304/ - AND BOOK PROFIT U/S 115JB OF THE ACT TO THE TUNE OF RS.78,38,34,405/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DISMISS THE APPEAL OF THE ASSESSEE IN THE ABSENCE OF THE ASSESSEE BY VIRTUE OF ORDER DATED 13.12.2016 , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4 . WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE PETITION HAS BEEN FILED 131 DAYS DELAY. THE REASON HAS BEEN GIVEN THAT THE CIT(A) HAS PASSED THE ORDER EXPARTE WHICH WAS NOT RECEIVED BY ASSESSEE TILL 25.04.2017, HOWEVER, THE CIT(A) HAS ISSUED THE ORDER ON 25.04.2017 WHICH WAS NOT RECEIVED BY ASSESSEE BEEN LOST IN TRANSIT . AFTER THE RECEIPT OF THE ORDER, T HE ASSESSEE F ILED AN APPEAL BEFORE 04.08.2017 AND ACCORDINGLY 12 DAYS DELAY ED THE APPLICATION WAS FILED . THE ASSESSEE ALSO FILED THE AFFIDAVIT IN SUPPORT OF HIS CONTENTION . THE ASSESSEE ALSO RELIED UPON THE DECISION OF KERALA HIGH COURT IN THE CASE OF VASU & CO. VS. ST ATE OF KERALA (2001) 124 STC 124 (KER). THE LD. REPRESENTATIVE OF THE ASSESSEE DID NOT ARGUE THE CASE ON MERITS BUT ARGUED THAT THE CIT(A) HAS DECIDED THE APPEAL OF THE ITA. NO.5171M /201 7 A.Y. 20 09 - 10 4 ASSESSEE IN THE ABSENCE OF THE ASSESSEE, THEREFORE, THE ORDER DATED 13.12.2016 IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE AND THE ISSUES ARE LIABLE TO BE RESTORED BEFORE THE CIT(A) FOR ADJUDICATION OF THE ISSUES ON MERTIS . HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE ORDER DATED 13.12.2016 ON RECORD, WE NOTICED THAT THE CIT(A) HAS PASSED THE ORDER IN QUESTION IN THE ABSENCE OF THE ASSESSEE. WE ALSO NOTICED THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY WITHOUT GOING INTO THE MERITS OF THE CA SE. SINCE T HE CASE OF THE ASSESSEE WAS NOT DISCUSSED AND DECIDED ON MERITS, THEREFORE, IN VIEW OF THE LAW RELIED BY THE LD. REPRESENTATIVE OF THE ASSESSEE TITLED AS CIT (CENTRAL) NAGPUR VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) (2016) 69 TAXMANN.COM 407 (BOMBAY) THE FINDING IS NOT LIABLE TO BE JUSTIFIABLE IN ACCORDANCE WITH LAW. TAKING INTO ACCOUNT, ALL THE FACTS AND CIRCUMSTANCES MENTIONED ABOVE AND ALSO RELYING UPON THE LAW RELIED BY THE LD. REPRESENTATIVE OF THE ASSESSEE(SUPRA) WE SET ASIDE THE FINDING OF THE CIT(A) AND RESTORED THE ISSUE BEFORE THE CIT(A) TO DECIDE THE MATTER OF CONTROVERSY AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA. NO.5171M /201 7 A.Y. 20 09 - 10 5 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 20. 12 . 201 8 SD/ - SD/ - ( B. R. BASKARAN ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 20. 12. 201 8 VIJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (D Y./ASSTT. REGISTRAR) , / ITAT, MUMBAI