JAGPAL INDUSTRIES, MUMBAI V. ITO 17(3)(2), MUMBAI

ITA 5813/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7801 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 02-02-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 18-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L K AGRAWAL
• Keywords: Opportunity of being heard; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI N.V.VASUDEVAN, JM ITA NO.3988/MUM/2007 : ASST.YEAR 2003-2004 ITA NO.5813/MUM/2008 : ASST.YEAR 2003-2004 M/S.JAGPAL INDUSTRIES 37 BARRISTER NATH PAI MARG COTTON GREET MUMBAI 400 033. PA NO.AACFJ3336L. VS. THE INCOME TAX OFFICER WARD 17(3)(2) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.GOPAL RESPONDENT BY : SHRI L.K.AGRAWAL O R D E R PER R.S.SYAL, AM : THESE TWO APPEALS BY THE ASSESSEE RELATE TO THE ASS ESSMENT YEAR 2003-2004. WHEREAS ITA NO.3988/MUM/2007 IS AGAINST THE ORDER P ASSED BY THE LEARNED CIT(A) ON 8.2.2007 PURSUANT TO THE ASSESSMENT ORDER PASSED U/S.143(3) AND THE SECOND APPEAL BEARING ITA NO.5813/MUM/2008 IS AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 29.7.2008 PURSUANT TO THE RECTIFICATION O RDER PASSED BY THE A.O. U/S.154. 2. THE LEARNED A.R. DID NOT PRESS CERTAIN DISALLOWA NCES UPHELD BY THE LEARNED CIT(A) AS SET OUT IN GROUND NOS. A TO E OF ITA NO. 3988/MUM/2007. THESE GROUNDS, THEREFORE, STAND DISMISSED. 3. THE ONLY ISSUE THROUGH GROUND NO. F IN THIS APP EAL WHICH SURVIVES FOR OUR CONSIDERATION IS AGAINST THE CONFIRMATION OF ADDITI ON OF RS.4,48,275. THE FACTS OF THIS GROUND ARE THAT THE ASSESSING OFFICER, IN HIS ORDER U/S.143(3) DISCUSSED VIDE PARA 4 THAT A SUM OF RS.59,77,000 WAS USED BY M/S.B SPL. TREATING IT AS ADVANCE GIVEN BY THE ASSESSEE, IT WAS OPINED THAT THE ASSES SEE OUGHT TO HAVE CHARGED INTEREST ON THIS AMOUNT. HE APPLIED 15% RATE AND DETERMINED OUT THE AMOUNT OF RS.4,48,475, WHICH WAS REQUIRED TO BE DISALLOWED OU T OF INTEREST EXPENDITURE. HE ITA NOS.3988/M/07 & 5813/M/08 M/S.JAGPAL INDUSTRIES. 2 MENTIONED : HENCE AN ADDITION OF RS.4,48,275 HAS B EEN MADE. HOWEVER WHILE COMPUTING THE TOTAL INCOME, HE OMITTED TO INCLUDE T HE SAID SUM OF RS.4.48 LAKHS. THE ASSESSEE CHALLENGED THIS FINDING OF A.O. BEFORE THE LEARNED CIT(A), WHO REFUSED TO ADJUDICATE ON IT FOR THE REASON THAT TH E A.O. HAD NOT MADE ADDITION ON THAT ACCOUNT. SUBSEQUENTLY, THE ASSESSING OFFICER PASSED AN ORDER U/S.154 ON 24.4.2006 MAKING THE SAID ADDITION OF RS.4,48,275, WHICH WAS OMITTED TO BE ADDED. WHEN THE MATTER CAME UP BEFORE THE LEARNED C IT(A), HE UPHELD THE ACTION OF THE A.O. ON THE GROUND THAT THE A.O. PROPOSED TO DISALLOW THE SAID SUM WHICH HE FAILED TO ADD BACK TO THE TOTAL INCOME AND THE S AME BEING MISTAKE APPARENT FROM RECORD WAS RIGHTLY RECTIFIED U/S.154 OF THE ACT. TH IS FINDING IS SUBJECT MATTER OF CHALLENGE IN THE OTHER APPEAL. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE C ONTENDED THAT THE ARGUMENTS PUT FORTH BY THE ASSESSEE BEFORE THE LEARNED FIRST APPELLATE AUTHORITY ON THE MERITS OF ADDITION AGAINST THE ORDER U/S.143(3) AS WELL AS 15 4 REMAINED TO BE ADDRESSED. IT WAS PRAYED THAT THE ASSESSING OFFICER BE DIRECTED T O CONSIDER THE ASSESSEES SUBMISSION IN SUPPORT OF NOT MAKING THE SAID ADDITI ON. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY OBJECTION TO IT. I N VIEW OF THESE RIVAL BUT COMMON SUBMISSIONS IT IS CLEAR THAT THE ASSESSEES CONTENT ION AGAINST THE ADDITION WAS NOT DEALT WITH BY THE LEARNED CIT(A) IN BOTH THE ORDERS . IN THE FIRST ORDER IT WAS REJECTED BECAUSE THE A.O. HAD NOT MADE ADDITION FOR THE SAID SUM AND IN THE SECOND ORDER IT WAS HELD TO BE A MISTAKE APPARENT FROM REC ORD WITHOUT GOING INTO THE MERITS OF ADDITION. IN OUR CONSIDERED OPINION THE E NDS OF JUSTICE WILL ADEQUATELY MEET IF THE IMPUGNED ORDER ON THIS ISSUE SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF A.O. WE ORDER ACCORDINGLY AND DIRECT HIM TO DECIDE THE QUESTION OF DISALLOWANCE OF RS.4,48,275, BEING INTEREST AT THE RATE OF 15% OF ADVANCE OF RS.59,77,000 AFRESH IN ACCORDANCE WITH LAW AFTER AL LOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NOS.3988/M/07 & 5813/M/08 M/S.JAGPAL INDUSTRIES. 3 5. IN THE RESULT, ITA NO.3988/MUM/2007 IS DISMISSED AND ITA NO.5813/MUM/2008 IS ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED ON THIS 3 RD DAY OF FEBRUARY, 2010. SD/- SD/- (N.V.VASUDEVAN) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI : 3 RD FEBRUARY, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A)-XXVII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI. ITA NOS.3988/M/07 & 5813/M/08 M/S.JAGPAL INDUSTRIES. 4 DATE INITIAL 1. DRAFT DICTATED ON 02.02.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 02.02.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER. *