M/s. Growth Avenue Ltd., Surat V. The Dy.CIT.,Circle-1, Surat

ITA 531/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63229 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-12-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 16-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI
• Keywords: Opportunity of being heard; Corroborative evidences; Non passing of speaking order; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 250/ AHD/2010 & I.T.A.NO. 1237/AHD/2012 (ASSESSMENT YEARS 2004-05 & 1999-2000 RESPECTIVELY) DCIT, CIRCLE 1, SURAT VS. M/S. GROWTH AVENUES LTD., 409, SUPER TEX TOWER, OPP. KINNARY CINEMA, RING ROAD, SURAT I.T.A.NO. 531/AHD/2010 (ASSESSMENT YEAR 2004-05) M/S. GROWTH AVENUES LTD., VS. DCIT, CIRCLE 1 409, SUPER TEX TOWER, SURAT OPP. KINNARY CINEMA, RING ROAD, SURAT PAN/GIR NO. : AAAACG8681O (APPELLANT) .. (RESPONDENT) DEPARTMENT BY: SHRI D C PATWARI, CIT, DR ASSESSEE BY: NONE DATE OF HEARING: 03.12.2012 DATE OF PRONOUNCEMENT: 14.12.2012 O R D E R PER SHRI A. K. GARODIA, AM:- OUT OF THIS BUNCH OF THREE APPEALS, THERE ARE TWO CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE FOR ASSESSMENT YEAR 2004-05 WHICH ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) I, SURAT D ATED 18.11.2009 AND THE REMAINING ONE APPEAL IS FILED BY THE REVENUE FOR AS SESSMENT YEAR 1999- I.T.A.NOS. 250 & 531 /AHD/2010 I.T.A.NO. 1237/AHD/2012 2 2000 WHICH IS DIRECTED AGAINST THE ORDERS OF LD. CI T(A) I SURAT DATED 21.03.2012. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONV ENIENCE. THESE APPEAL WERE FIXED FOR HEARING ON SEVERAL OCCASIONS I.E. ON 15.05.2012, 21.06.212 AND 26.09.2012 AND ON ALL THESE THREE DAT ES, NONE APPEARED ON BEHALF OF THE ASSESSEE ALTHOUGH ADJOURNMENT APPLICA TIONS WERE FILED BY THE ASSESSEE AND ON THE BASIS OF THIS, HEARING WAS ADJOURNED ON ALL THESE THREE DATES. SUBSEQUENTLY, THE APPEAL WAS AGAIN FI XED FOR 29.10.2012 AND ON THIS DATE ALSO, NONE APPEARED ON BEHALF OF THE A SSESSEE ALTHOUGH AN ADJOURNMENT APPLICATION WAS AGAIN FILED BY THE ASSE SSEE. THEREAFTER, THE APPEAL WAS FIXED FOR HEARING ON 03.12.2012 AND THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE BY RPAD ON 06.11.2012. THIS N OTICE HAS COME BACK UNSERVED BY THE POSTAL DEPARTMENT WITH THE REMARKS LEFT. NO NEW ADDRESS HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE. AS PER THE APPLICATION FOR ADJOURNMENT SUBMITTED BY THE ASSESS EE ON ITS LETTER HEAD FOR HEARING FIXED ON 29.10.2012, ADDRESS GIVEN WAS; 409, SUPER TEX TOWER, OPP.: KINNARY CINEMA, RING ROAD, SURAT 395 002 AND THE NOTICE OF HEARING WAS SENT ON THIS VERY ADDRESS. N O NEW ADDRESS HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE. UNDER THIS FACT UAL POSITION, THERE IS NO MANNER IN WHICH THE TRIBUNAL CAN SERVE NOTICE OF HE ARING ON THE ASSESSEE AND HENCE, IT IS INFERRED THAT THE ASSESSEE IS NOT INTERESTED TO PURSUE HIS APPEAL AND THE SAME IS DISMISSED. IN OUR ABOVE VIE W, WE FIND SUPPORT FROM THE FOLLOWING DECISIONS:- IN THE CASE OF CIT VS B.N. BHATTACHARGEE AND ANOTHE R, REPORTED IN 118 ITR 461 (RELEVANT PAGES 477 AND 478) WHEREIN TH EIR LORDSHIPS HAVE HELD THAT THE APPEAL DOES NOT MEAN MERELY FIL ING OF THE APPEAL BUT EFFECTIVELY PURSUING IT. I.T.A.NOS. 250 & 531 /AHD/2010 I.T.A.NO. 1237/AHD/2012 3 IN THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR VS C IT 223 ITR 480 (M.P.) WHILE DISMISSING THE REFERENCE MADE AT THE I NSTANCE OF THE ASSESSEE IN DEFAULT MADE FOLLOWING OBSERVATION IN T HEIR ORDER:- IF THE PARTY, AT WHOSE INSTANCE THE REFERENCE IS M ADE, FAILS TO APPEAR AT THE HEARING, OR FAILS IN TAKING STEPS FOR PREPARATION OF THE PAPER BOOKS SO AS TO ENABLE HEARING OF THE REFERENC E, THE COURT IS NOT BOUND TO ANSWER THE REFERENCE. IN THE CASE OF CIT VS MULTIPLAN INDIA LIMITED; 38 ITD 320 (DEL), THE APPEAL WAS FILED BY THE REVENUE BEFORE THE TRIB UNAL, WHICH WAS FIXED FOR HEARING. BUT ON THE DATE OF HEARING, NOB ODY REPRESENTED THE REVENUE/APPELLANT NOR ANY COMMUNICATION FOR ADJ OURNMENT WAS RECEIVED. THERE WAS NO COMMUNICATION OR INFORMATIO N AS TO WHY THE REVENUE CHOSE TO REMAIN ABSENT ON DATE. THE TR IBUNAL ON THE BASIS OF INHERENT POWERS, TREATED THE APPEAL FILED BY THE REVENUE AS UNADMITTED IN VIEW OF THE PROVISIONS OF RULE 19 OF THE APPELLATE TRIBUNAL RULES, 1963. 2. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T .A.NO. 531/AHD./2010 STANDS DISMISSED. 3. NOW, WE TAKE UP THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2004-05 IN I.T.A.NO. 250/AHD/2010. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE AS UNDER: 1, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)-I, SURAT HAS ERRED IN RESTR ICTING THE DISALLOWANCE MADE BY THE AO OF RS.69,85,929 TO RS.6 1,55,000 IN RESPECT OF CLAIM FOR LATE SUBMISSION OF MARGIN CERT IFICATE, MEMBERSHIP CONTINUATION CHARGES AND NSE SETTLEMENT DUES. I.T.A.NOS. 250 & 531 /AHD/2010 I.T.A.NO. 1237/AHD/2012 4 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSES SING OFFICER. 3) IT IS, THEREFORE, PRAYED THAT THE ORDER O F THE CIT(A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 4. LD. D.R. SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D. R., PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND HAT THIS ISSUE HAS BEEN DECIDED BY LD. CIT( A) AS PER PARA 5.3 ON OF HIS ORDER WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE : 5.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE A PPELLANT AND THE OBSERVATION OF THE A.O. THE PAYMENTS MADE TO NS E FOR LATE AND FOR NON-SETTLEMENT OF DUES CAN BE STATED TO BE FOR THE PURPOSE OF BUSINESS, AS THESE ARE FINES DURING THE COURSE O F BUSINESS. BUT THE PAYMENTS OF RS.61,55,000/- FOR RESTORATION OF M EMBERSHIP IS A CAPITAL EXPENDITURE AND NOT A REVENUE EXPENDITURE A T ALL. THIS EXPENDITURE HAS BEEN MADE WHICH WILL GIVE THE ASSES SEE ENDURING BENEFIT. AS PER THE DECISION OF THE HON'BLE I.T.A.T ., CHANDIGARH IN THE CASE OF MASTER CAPITAL SERVICES LTD. (SUPRA) TH E PAYMENT FOR LATE SUBMISSION OF MARGIN CERTIFICATE AND PAYMENT F OR NON-PAYMENT OF DUE ARE ALLOWABLE AS REVENUE EXPENDITURE. HENCE THE PAYMENT 01 RS.L,55,336/-'AND RS.6,75,593/- ARE ALLOWED. HOWEVE R, THE PAYMENT FOR RESTORATION OF MEMBERSHIP WHICH HAD BEE N SUSPENDED BY THE NSE IS NOT A REVENUE EXPENDITURE AT ALL. IT IS A CAPITAL EXPENDITURE FOR ENDURING BENEFIT HENCE THE PAYMENT OF RS.61,55,000/- HAS BEEN RIGHTLY DISALLOWED BY THE A .O. THIS GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOWED. 6. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT HE HAS DELETED PART DISALLOWANCE BY FOLLOWING A DECISI ON OF CHANDIGARH BENCH OF ITAT. HENCE, WE DECLINE TO INTERFERE IN H IS ORDER ON THIS ISSUE. 7. IN THE RESULT, THIS APPEAL OF THE REVENUE IS DIS MISSED. I.T.A.NOS. 250 & 531 /AHD/2010 I.T.A.NO. 1237/AHD/2012 5 8. NOW, WE TAKE UP THE APPEAL OF THE REVENUE FOR TH E ASSESSMENT YEAR 1999-2000 IN I.T.A.NO. 1237/AHD/2012. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A)-II, SURAT HAS ERRED IN DELETING THE ADDI TION OF RS,LL,97,158/- & 2,66,0717- MADE ON ACCOUNT OF DISA LLOWANCES OF MONITORING & SURVEILLANCE AND DISALLOWANCE OF BROKE RAGE EXPANSES RESPECTIVELY, WITHOUT APPRECIATING THE FACT THAT TH E ASSESSEE FAILED TO DISCHARGE THE ONUS CAST ON HIM TO PROVE THE GENU INENESS OF THE TRANSACTIONS WHICH ARE FOR CLAIMING THE DEDUCTION W ITH THE SUPPORTING EVIDENCES [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-SIDE AND THAT OF ASSESSING OFFICER MAY BE RESTO RED TO THE ABOVE EXTENT. 9. LD. D.R. SUPPORTED THE ASSESSMENT ORDER. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D .R. AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND T HAT IT IS NOTED BY LD. CIT(A) IN PARA 6 OF HIS ORDER THAT ON MERIT, THE CA SE IS COVERED IN FAVOUR OF THE ASSESSEE AND THEREFORE, GROUND NO.2 IS DECID ED IN FAVOUR OF THE ASSESSEE. THERE IS NO MENTION IN THE ORDER OF LD. CIT(A) AS TO HOW, THE ISSUE ON MERIT IS COVERED IN FAVOUR OF THE ASSESSEE . SUCH A CRYPTIC AND NON SPEAKING ORDER OF LD. CIT(A) CANNOT BE SUSTAINE D AND HENCE, WE SET ASIDE HIS ORDER AND RESTORE THE MATTER BACK TO HIS FILE FOR PASSING A WELL REASONED AND SPEAKING ORDER AFTER PROVIDING ADEQUAT E OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 11. IN THE RESULT, THIS APPEAL OF THE REVENUE STAND S ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE COMBINED RESULT, THE APPEAL OF THE ASSES SEE IS DISMISSED WHEREAS THE APPEAL OF THE REVENUE FOR THE ASSESSMEN T YEAR 2004-05 IS I.T.A.NOS. 250 & 531 /AHD/2010 I.T.A.NO. 1237/AHD/2012 6 DISMISSED AND THE APPEAL OF THE REVENUE FOR ASSESSM ENT YEAR 1999-2000 IS ALLOWED FOR STATISTICAL PURPOSES. 13. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 10/12/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11/12/2012. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 14/12/2012 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.14/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14/12/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .