Seabros Overseas Pvt. Ltd., Gurgaon V. ITO, New Delhi

ITA 5813/DEL/2012

• Counselvise Citation: 581320114 RSA 2012
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: JITENDRA GARG
• Keywords: Depreciation; Period of limitation; Time period of passing order
• Section: 12; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C: NEW DELHI) BEFORE SHRI RAJ PAL YADAV, JUDICIAL MEMBER AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.5813/DEL/ 2012 (ASSESSMENT YEAR : 2008-09) SEABROS OVERSEAS PVT. LTD. VS. ITO C/O MR. ASHOK GARG, DIRECTOR, WARD-8(1), SEABROS OVERSEAS PVT. LTD., ROOM NO. 197A, E-807, SURYA VIHAR, C. R. BUILDING, I. P. ESTATE NEAR KAPASHERA BORDER, GURGAON. NEW DELHI. PAN:AAACS4189H ASSESSEE BY : SHRI JITENDRA GARG, CA. REVENUE BY :SHRI SATPAL SINGH, SR.DR ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XII, NEW DELHI DATED 06.08.2012 FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS T AKEN BOTH LEGAL GROUNDS AS WELL AS GROUNDS ON MERITS OF THE CASE AND THE GR OUNDS ARE AS UNDER: 1. THAT LD. CIT (A) ERRED IN LAW AND ON FACTS IN C ONFIRMING THAT FIRST STATUTORY NOTICE U/S 143(2) OF THE INCOM E TAX ACT WAS SERVED WITH IN THE LIMITATION PERIOD AND AS PER THE PROVISIONS OF SECTION 282 OF THE ACT. 2. THAT LD. CIT (A) ERRED IN LAW AND ON FACTS OF THE C ASES IN CONFIRMING THAT JURISDICTION IN TERMS OF SECTION 12 4 OF THE ITA NO.5813/DEL/2012 2 INCOME TAX ACT TO ASSESS THE ASSESSEE VEST WITH THE INCOME TAX OFFICER, WARD 8(1), DELHI. 3. THAT LD. CIT (A) ERRED ON FACTS OF THE CASE IN SUST AINING THE ADHOC DISALLOWANCE OF EXPENDITURE TO THE EXTENT OF 90% OF TOTAL EXPENSES BY REJECTING SUMMARILY THE SUBMISSIONS MAD E BY THE APPELLANT, 4. THAT LD. ASSESSING OFFICER MADE ADDITION OF INTERES T INCOME OF RS.4800 TO THE TAXABLE INCOME OF ASSESSEE WITHOU T CONSIDERING THE FACT THAT IT IS ALREADY INCLUDED IN THE TAXABLE INCOME. 5. THE APPELLANT CRAVES FOR PERMISSION TO ADD, DELETE OR AMEND ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARI NG. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME DECLARING A LOSS OF RS.1,37,633/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE NOTICE U/S 143(2), DA TED 20.08.2009 WAS SENT AT THE ADDRESS AS PER RETURN OF ASSESSEE. HOWEVER NO O NE ATTENDED AND SUBSEQUENTLY A FURTHER NOTICE U/S 143(2) DATED 18.0 9.2009 WAS SENT WHICH WAS RECEIVED BACK AS UN-SERVED WITH THE REMARKS OF POSTAL AUTHORITIES NO SUCH FIRM. THEREFORE, ASSESSING OFFICER SERVED NOT ICE THROUGH AFFIXTURE ON 30.09.2009 AT AVAILABLE ADDRESS AS THE PREMISES WAS FOUND LOCKED. LATER ON, FRESH NOTICE U/S 143(2) WAS ISSUED WHICH WAS ALSO R ETURNED AS UNCLAIMED. THEREFORE, ASSESSING OFFICER NOTED THE ADDRESS OF A SSESSEE FROM THE WEBSITE OF ROC WHICH WAS DIFFERENT FROM EARLIER ADDRESS. F URTHER A NOTICE AT THE ADDRESS AS AVAILABLE IN THE ROC RECORDS WAS ALSO SE NT BUT IN RESPONSE NO ITA NO.5813/DEL/2012 3 BODY ATTENDED. HOWEVER, LATER ON THE ASSESSEE SENT A LETTER BY POST WHEREIN CERTAIN OBJECTIONS REGARDING VALIDITY OF NOTICE AND JURISDICTION OF THE CASE WERE RAISED. 3. THE ASSESSING OFFICER DISMISSED THE OBJECTIONS R AISED BY ASSESSEE AND SENT FINAL SHOW CAUSE NOTICE REQUIRING ASSESSSEE TO FURNISH DETAILS/ INFORMATION BY A CERTAIN DATE. HOWEVER, NO BODY APP EARED BUT A LETTER WAS RECEIVED WHEREIN SAME OBJECTION REGARDING VALIDITY OF THE NOTICE WAS RAISED. THE ASSESSING OFFICER NOTED THAT IN THE PRECEDING Y EAR ALSO THE ASSESSEE HAD ADOPTED SAME STRATEGY AND ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT. THEREFORE, HE HELD THAT ASSESSEE WAS DELIBERATELY N OT ATTENDING THE PROCEEDINGS AND COMPLETED THE ASSESSMENT U/S 144 OF THE ACT BY ADDING BACK 90% OF THE EXPENSES CLAIMED AS IN HIS OPINION 10% OF EXPENSES WERE SUFFICIENT FOR RUNNING THE BUSINESS. 4. BEFORE, LD. CIT (A) THE ASSESSEE RAISED LEGAL GR OUNDS REGARDING VALIDITY OF NOTICE AND JURISDICTION TO WHICH LD. CI T (A) DID NOT AGREE. HOWEVER, HE OBSERVED THAT TOTAL EXPENSES INCLUDED D EPRECIATION OF RS.1,06,211/-. THEREFORE, HE REDUCED SUCH AMOUNT OF DEPRECIATION FROM THE TOTAL EXPENSES AND RESTRICTED THE DISALLOWANCE TO 1 0% OF EXPENDITURE FROM REMAINING EXPENSES. WHILE PASSING THE ORDER, THE LD . COMMISSIONER OF INCOME TAX (APPEALS) OVERLOOKED THE FACT THAT ASSES SING OFFICER HAD ITA NO.5813/DEL/2012 4 DISALLOWED 90% OF EXPENSES WHEREAS HE DISALLOWED 10 % OF REMAINING EXPENSES AFTER RECORDING A WRONG FACT THAT ASSESSIN G OFFICER HAD DISALLOWED 10% OF EXPENDITURE. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. AT THE OUTSET THE LD. AR AGAIN RAISED LEGAL ISSUES AND ARGUED THAT NOTICE WAS NOT SERVED PROPERLY THEREFORE, ASSESSMENT WAS NOT VALID. 6. REGARDING MERITS OF THE CASE, THE LD. AR SUBMITT ED THAT THE ORDER OF LD. CIT (A) IS NOT CLEAR AS HE HAS TAKEN A CONTRARY VIEW OF DISALLOWANCE. ON THE ONE HAND THE ASSESSING OFFICER DISALLOWED 90% O F EXPENSES, WHEREAS LD. CIT (A) HAS DISALLOWED 10% OF EXPENSES AFTER EX CLUDING DEPRECIATION OF RS.1,06,567/-. HE FURTHER ARGUED THAT EVEN DEPRECIA TION ALLOWED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT CORREC T AS DEPRECIATION WAS AS PER DEPRECIATION ALLOWED UNDER COMPANIES ACT, WH EREAS THE DEPRECIATION ALLOWABLE UNDER INCOME TAX WAS RS.79158/- AND IN TH IS RESPECT HE INVITED OUR ATTENTION TO PAPER BOOK PAGE 41. 7. THE LD. AR FURTHER ARGUED THAT INTEREST INCOME O F RS.4,800/- WAS ALREADY CREDITED IN THE PROFIT AND LOSS ACCOUNT AND , THEREFORE, FURTHER ADDITION RESULTED INTO DOUBLE ADDITION. ITA NO.5813/DEL/2012 5 8. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF ASSESSING OFFICER. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ON LEGAL ISSUES, LD. CIT (A) HAS GIVEN HIS FINDINGS AND WE ARE IN AGREEMENT WITH LD. CIT (A) T HEREFORE, GROUND NO.1 AND 2 ARE DISMISSED. 10. AS REGARDS MERITS OF THE CASE, WE FIND THAT THE ACTION OF THE ASSESSING OFFICER IN MAKING DISALLOWANCE OF 90% OF EXPENSES W AS NOT JUSTIFIED. THE ASSESSEE ALSO DID NOT COOPERATE WITH THE ASSESSING OFFICER BUT EVEN IF THE ASSESSING OFFICER WAS COMPELLED TO COMPLETE ASSESSM ENT U/S 144 HE SHOULD HAVE TAKEN A REASONABLE VIEW OF THE CLAIM OF THE AS SESSEE. THE LD. CIT (A) ALSO OVERLOOKED THE FACT THAT THE ACTUAL CLAIM OF D EPRECIATION WAS LOWER THAN ALLOWED BY HIM. SIMILARLY THERE IS AN AMBIGUITY IN THE ORDER PASSED BY HIM AS REGARDS THE QUANTUM OF DISALLOWANCE. 11. IN VIEW OF THE ABOVE, FACTS AND CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT CASE OF THE ASSESSEE BE RE ADJUDICATED BY ASSESSING ITA NO.5813/DEL/2012 6 OFFICER WHO WILL PASS A FRESH ORDER AFTER AFFORDING A PROPER OPPORTUNITY TO ASSESSEE OF BEING HEARD. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESSE E IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 11/10/ 2013 SD/- SD/- (RAJ PAL YADAV) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 11 TH DAY OF OCTOBER, 2013 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.