M/s. Vijai Shree Limited, Howrah V. DCIT, Central Circle - VII, Kolkata, Kolkata

ITA 553/KOL/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6782 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 18-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-04-2011
• Court: TRIBUNAL
• Department Lawyers: S SINHA
• Assessee Lawyers: M TIWARI
• Keywords: Opportunity of being heard; Difference of opinion
• Section: 143(3); 263

Judgement Text

1 , A , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A , KO LKATA [ . . . . . .. . , ,, , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI C.D. RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO. 553 (KOL) OF 2011 %& '( / ASSESSMENT YEAR 2006-07 M/S. VIJAY SHREE LIMITED , HOWRAH. (PAN-AAACV9833B) DY.COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-VII, KOLKATA. (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI M. TIWARI /0+, 1 2 ' / FOR THE RESPONDENT: / SRI S. SINHA. '3 / ORDER ( . . . . . .. . ), (B.R.MITTAL), JUDICIAL MEMBER : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST ORDER OF LD. C.I.T., CENTRAL-I, KOLKATA DATED 10/03/2011 PAS SED U/S. 263 OF I.T. ACT, 1961. 2. THE ONLY GROUND ON WHICH THE LD. C.I.T. HAS PAS SED ORDER U/S. 263 OF THE ACT IS BY DIRECTING THE A.O. TO CONSIDER AS TO WHETHER THE WA GES OF RS.1,31,10,682/- FOR THE PERIOD FROM 23/4/2004 TO 25/4/2005, WHICH WERE DEBITED BY THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION, ARE ADMISSIBLE AS AN EXPENDITU RE OR NOT. THE LD. C.I.T. HAS STATED THAT THE A.O. WRONGLY ALLOWED THE ASSESSEES CLAIM OF WAGES FOR THE PRIOR PERIOD VIDE NOTE NO. 10 OF NOTES ON ACCOUNT AND SCHEDULE-M TO T HE AUDITED ACCOUNTS, WHICH IS NOT ADMISSIBLE IN THE CURRENT YEAR. HOWEVER, THE ASSESS EE SUBMITTED THAT THE WAGES FOR THE PERIOD FROM 23/4/2004 TO 25/4/2005 HAS NOT BEEN ACC OUNTED FOR DUE TO NON-PROCESSING OF WAGES PAY ROLL AS THERE WAS SOME DISTURBANCE IN THE MILL LEADING TO SUSPENSION OF WORK SINCE 25/5/2004. HOWEVER, THE LD. C.I.T. DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE. HE AFTER REJECTING THE CONTENTION OF THE ASSESSEE THAT THERE WAS A DIFFERENCE OF OPINION AND THE A.O. HAD TAKEN ONE OF THE POSSIBLE VIEWS AND HENCE THE LD. C.I.T. COULD NOT REVISE THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT AND TO HOLD THAT THE 2 ASSESSMENT ORDER PASSED BY THE A.O. IS ERRONEOUS AN D PREJUDICIAL TO THE INTERESTS OF REVENUE BY ALLOWING THE PRIOR PERIOD EXPENSES DEBIT ED BY THE ASSESSEE IN THE P/L ACCOUNT OF THE CURRENT YEAR, WHICH IS NOT ADMISSIBL E AS PER LAW. HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE COURSE OF HEARING, THE LD. A/R REITE RATED THE FACTS AS STATED BEFORE THE LD. C.I.T. AND ALSO REFERRED PAGES 1 TO 3 OF THE PA PER BOOK WHICH ARE COPIES OF SUBMISSIONS MADE BY THE ASSESSEE BEFORE LD. C.I.T. IN REPLY TO SHOW CAUSE NOTICE ISSUED U/S. 263 OF THE ACT. HE FURTHER REFERRED PAGES 83 & 84 OF THE PAPER BOOK, WHICH IS A LETTER DATED 17/12/2008 AND SUBMITTED THAT THE SAME VERY ISSUE WAS EXAMINED AND CONSIDERED BY THE A.O. DURING ASSESSMENT PROCEEDING S AND AFTER BEING SATISFIED, HE ALLOWED THE WAGES OF RS.1,31,10,682/- PAID BY THE A SSESSEE IN THE CURRENT FINANCIAL YEAR IN RESPECT OF EARLIER YEAR. HE SUBMITTED THAT THE SAID FACT WAS ALSO STATED BY THE AUDITORS IN THE NOTES ON ACCOUNTS AND REFERRED PAGE 52 OF TH E PAPER BOOK TO SUBSTANTIATE HIS SUBMISSION. HE FURTHER RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GABRIEL INDIA LTD. [203 ITR 108] SU BMITTED THAT IF THE A.O. HAS TAKEN ONE OF THE POSSIBLE VIEWS AND EVEN IF THE LD. C.I.T . DOES NOT AGREE WITH THAT VIEW OF A.O., HE CANNOT REVERSE THE SAME BY EXERCISING HIS JURISDICTION U/S. 263 OF THE ACT. HE SUBMITTED THAT THE ORDER PASSED BY THE LD. C.I.T. B E QUASHED. 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE SUPPORTED THE ORDER OF LD. C.I.T. HE FURTHER SUBMITTED THAT NO PREJUDICE IS C AUSED TO THE ASSESSEE AS THE LD. C.I.T. HAS DIRECTED THE A.O. TO COMPLETE THE ASSESSMENT AS PER LAW AND AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HE SUB MITTED THAT THERE IS NO EVIDENCE/ DISCUSSION IN THE ASSESSMENT ORDER THAT THE A.O. HA D EXAMINED THIS ISSUE AS TO WHETHER EARLIER YEAR EXPENSES ARE ALLOWABLE IN THE SUBSEQUE NT YEAR OR NOT. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE DO AGREE WITH THE LD. A/R THAT THERE IS A REFERENCE IN THE LETTER DATED 17/12/2008 PLACED ON PAGES 83 & 84 OF THE PAP ER BOOK WHICH IS ADDRESSED TO THE A.O. THAT THERE WAS A LOCKOUT OF THE MILL FOR THE P ERIOD 23/5/2004 TO 22/6/2005 AND DUE TO WHICH WAGES COULD NOT BE CALCULATED AND THE ASSE SSEE HAS WORKED OUT THE WAGES IN THE ASSESSMENT YEAR UNDER CONSIDERATION IN RESPECT OF THE EARLIER YEAR. THE SAID FACTS ARE 3 ALSO NOTED BY THE AUDITOR IN THE NOTES ON ACCOUNTS AND ALSO EXPLAINED IN THE SCHEDULE ANNEXED TO AND FORMING PART OF THE BALANCE SHEET, A S IS EVIDENT FROM PAGE-77 READ WITH PAGE 52 OF THE PAPER BOOK. BE THAT AS IT MAY, THE LD. A/R SUBMITTED AT THE TIME OF HEARING THAT THERE IS NO TAX IMPACT EVEN IF THE WAG ES ARE NOT ALLOWED IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND ARE CONSIDERED IN THE PRECEDING ASSESSMENT YEAR AS THE ASSESSEE HAS INCURRED LOSS IN BOTH THE ASSESSMENT Y EARS. WE ARE OF THE CONSIDERED VIEW THAT THE ABOVE SUBMISSION OF THE ASSESSEES LD. A/R IS NOT RELEVANT WHILE CONSIDERING THE ISSUE BEFORE US, I.E. WHETHER THE LD. C.I.T. HAS IN VOKED HIS JURISDICTION U/S. 263 OF THE ACT VALIDLY OR NOT. WE OBSERVE THAT IN THE ASSESSMENT O RDER THERE IS NO SUCH DISCUSSION EVIDENCING THAT THE A.O. HAD CONSIDERED AS TO WHETH ER THE WAGES FOR THE EARLIER YEAR IS ALLOWABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATIO N OR NOT. CONSIDERING THE ABOVE FACTS AND THE DOCUMENTS PLACED ON RECORD AND ALSO C ONSIDERING THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES, WE HOLD THAT TH ERE IS NO INFIRMITY IN THE ACTION OF THE LD. C.I.T. TO DIRECT THE A.O. TO DECIDE THE ISSUE AS PE R LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HOWEVER, WE MODIFY TH E ORDER OF LD. C.I.T. TO THE EXTENT THAT THE A.O. WILL CONSIDER THE SAID ISSUE DE NOVO AND WITHOUT BEING INFLUENCED BY THE OBSERVATION OF THE LD. C.I.T. HE WILL DECIDE THE S AME IN ACCORDANCE WITH LAW ON THE BASIS OF THE EVIDENCE AS MAY BE FURNISHED BY THE AS SESSEE AND ALSO AFFORD DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED SUBJECT TO THE ABOVE OBSERVATION. 4 '3 #5' 6 5% 7 48 THIS ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( . . . . . .. . ) (C.D.RAO) , ACCOUNTANT MEMBER (B.R.MITTAL) , JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 18-05-2011 4 $ $ $ $ / ITA NO. 553 (KOL) OF 2011 '3 1 /9 :'9';- COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT : M/S. VIJAI SHREE LTD., 47/48, R.N.R.C. GHAT ROAD , SHIBPUR, HO WRAH-711 101 2 /0+, / THE RESPONDENT : D.C.I.T., CENTRAL CIRCLE-VII, KOLK ATA. 3. 3%/ THE C.I.T., CENTRAL-I, KOLKATA. 4. ?7 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 5 . GUARD FILE . 09 // TRUE COPY, '3%5/ BY ORDER, (DKP) @ A / DY/ASSTT. REGISTRAR .