HYTONE TEXSTYKES LTD, NAVI MUMBAI V. ASST CIT WD NO. 10(3), MUMBAI

ITA 5937/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8299 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 07-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 24-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIM KUMAR MODI
• Keywords: Additional evidence; Bad and doubtful debts

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND , SHRI RAJENDRA, ACCOUNTANT MEMBER I.TA. NO. 5937/MUM/2011 ASSESSMENT YEAR 2008-09 HYTONE TEXSTYLES LIMITED, PLOT NO. 70, MIDC, TEXTILE PROCESSING ZONE, NEAR RAMNATH SOLAR, MAHAPE VILLAGE, NAVI MUMBAI 400 701. PAN: AAACH 2033B VS. ASST. CIT, WARD NO. 10(3), MUMBAI. ( / APPELLANT ) ( ! / RESPONDENT ) ' / APPELLANT BY : SHRI VIJAY MEHTA ! # ' /RESPONDENT BY : SHRI ASHIM KUMAR MODI $ # %& / DATE OF HEARING : 07-11-2012 '() # %& / DATE OF PRONOUNCEMENT : 07-11-2012 * / O R D E R PER RAJENDRA, AM THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER DT .10.06.2011 PASSED BY THE CIT(A)-22, MUMBAI. FOLLOWING GROUNDS OF APPEAL H AVE BEEN RAISED BY THE ASSESSEE-COMPANY : THE APPELLANT SUBMITS THE FOLLOWING GROUNDS, WHIC H ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1.RE: DISALLOWANCE OF BAD DEBTS RS. 17,85,081/-: 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS T HE LEARNED CIT (A)] GROSSLY ERRED IN UPHOLDING THE ORDER OF ASSESSING OFFICER FOR DISALL OWING THE BAD DEBTS WITHOUT CONSIDERING I.TA. NO. 5937/MUM/2011 HYTONE TEXSTYLES LIMITED 2 THE SUBMISSIONS OF THE APPELLANT IN THE RIGHT SPIRI T AND HAS ALSO NOT GIVEN DUE CONSIDERATION TO THE ADDITIONAL EVIDENCES SUBMITTED BEFORE IT. 1.2 THE LEARNED CIT-A GROSSLY ERRED IN NOT CONSIDER ING THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT WITHOUT APPRECIATING THE FACT THAT THE AS SESSMENT WAS COMPLETED IN GROSS HASTE WITHOUT PROVIDING REASONABLE OPPORTUNITY TO THE APP ELLANT TO FURNISH THE REQUIRED DETAILS AS A CONSEQUENCE OF WHICH THE APPELLANT WAS REQUIRED TO SUBMIT ADDITIONAL DOCUMENTARY EVIDENCES IN THE FORM OF BILLS, VOUCHERS BEFORE THE LEARNED CIT (A). 2 .RE: DISALLOWANCE OF LABOUR CHARGES RS. 48,64,253 /-: 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) GROSSLY ERRED IN UPHOLDING THE ORDER OF ASSESSING OFFICER D ISALLOWING LABOUR CHARGES WITHOUT CONSIDERING THE SUBMISSIONS OF THE APPELLANT IN THE RIGHT SPIRIT AND HAS ALSO NOT GIVEN DUE CONSIDERATION TO THE ADDITIONAL EVIDENCES SUBMITTED BEFORE IT. 2.2 THE LEARNED CIT(A) GROSSLY ERRED IN UPHOLDING T HE VIEW OF ASSESSING OFFICER OF DISALLOWING LABOUR CHARGES ON THE BASIS OF COMPARAT IVE TURNOVER OF TWO YEARS WITHOUT CONSIDERING THE FACT THAT THE REVENUES OF THE TWO Y EARS ARE NOT COMPARABLE. 2.3 THE LEARNED CIT(A) GROSSLY ERRED IN NOT CONSIDE RING THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT WITHOUT APPRECIATING THE FACT THAT THE AS SESSMENT WAS COMPLETED IN GROSS HASTE WITHOUT PROVIDING REASONABLE OPPORTUNITY TO THE APP ELLANT TO FURNISH THE REQUIRED DETAILS AS A CONSEQUENCE OF WHICH THE APPELLANT WAS REQUIRED TO SUBMIT ADDITIONAL DOCUMENTARY EVIDENCES IN THE FORM OF BILLS, VOUCHERS BEFORE THE LEARNED CIT (A). 3. RE: DISALLOWANCE OF POWER & FUEL CHARGES RS. 30, 48,129/-: 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) GROSSLY ERRED IN UPHOLDING THE ORDER OF ASSESSING OFFICER D ISALLOWING POWER AND FUEL CHARGES WITHOUT CONSIDERING THE SUBMISSIONS OF THE APPELLANT IN THE RIGHT SPIRIT AND HAS ALSO NOT GIVEN DUE CONSIDERATION TO THE ADDITIONAL EVIDENCES SUBMITTED BEFORE IT. 3.2 THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDI NG THE VIEW OF THE ASSESSING OFFICER OF DISALLOWING THE POWER AND FUEL CHARGES ON THE BASIS OF COMPARATIVE TURNOVER OF THE TWO YEARS WITHOUT CONSIDERING THE FACT THAT THE POWER AND FUE L CHARGES OF THE PREVIOUS YEAR WERE LOW DUE TO THE SUBSIDY RECEIVED IN THAT YEAR. 3.3 THE LEARNED CIT(A) GROSSLY ERRED IN NOT CONSIDE RING THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT WITHOUT APPRECIATING THE FACT THAT THE AS SESSMENT WAS COMPLETED IN GROSS HASTE WITHOUT PROVIDING REASONABLE OPPORTUNITY TO THE APP ELLANT TO FURNISH THE REQUIRED DETAILS AS A CONSEQUENCE OF WHICH THE APPELLANT WAS REQUIRED TO SUBMIT ADDITIONAL DOCUMENTARY EVIDENCES IN THE FORM OF BILLS, VOUCHERS BEFORE THE LEARNED CIT (A). 4 .RE: AD-HOC DISALLOWANCE OF MISCELLANEOUS EXPENSE S RS. 5,45,659/-: 4.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) GROSSLY ERRED IN UPHOLDING THE ORDER OF ASSESSING OFFICER D ISALLOWING MISCELLANEOUS EXPENSES ON AN AD-HOC BASIS WITHOUT CONSIDERING THE SUBMISSIONS OF THE APPELLANT IN THE RIGHT SPIRIT. 5. RE: TREATMENT OF INTEREST INCOME AS INCOME FROM OTHER SOURCES RS. 1,62,426/-: 5.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) GROSSLY ERRED IN CLASSIFYING THE INTEREST INCOME AS INCOME FROM OTHER SOURCES BY RELYING ON THE TWO APEX COURT JUDGMENTS PANDIAN CHEMICALS LTD. VS. C IT [262 ITR 278] & TUTICORIN ALKALI I.TA. NO. 5937/MUM/2011 HYTONE TEXSTYLES LIMITED 3 CHEMICALS & FERTILIZERS LTD. VS. CIT 227 ITR 172 [S C] THAT ARE NOT RELEVANT TO THE FACTS OF THE CASE OF APPELLANT. 6. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AME ND OR DELETE AND GROUND OF APPEAL. 2. THE APPELLANT-COMPANY, ENGAGED IN THE BUSINESS OF M ANUFACTURING, PROCESSING AND TRADING OF TEXTILES, GARMENTS AND ALLIED PRODUC TS FILED ITS RETURN OF INCOME ON 29.09.2008 DECLARING TOTAL INCOME OF NIL UNDER NORM AL PROVISIONS. THE APPELLANT IS A SICK COMPANY REGISTERED WITH THE BOARD FOR INDUST RIAL AND FINANCIAL RECONSTRUCTION (BIFR). THE ASSESSMENT WAS COMPLETED BY THE ASSESS ING OFFICER (AO) ON 26.11.2010 BY MAKING VARIOUS ADDITIONS AND DISALLOWANCES AMOUN TING TO RS.1,05,39,126/- ON THE GROUND THAT THE APPELLANT FAILED TO FURNISH THE REQ UIRED DETAILS. THE APPELLANT BEING AGGRIEVED BY THE VARIOUS ADDITIONS AND DISALLOWANCE S PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). OUT OF 9 ADDITION S/DISALLOWANCES HE GAVE RELIEF WITH REGARD TO FOUR GROUNDS OF APPEAL, WHEREAS FOUR DISALLOWANCES WERE UPHELD. HE ALSO CONFIRMED THE ACTION OF THE AO REGARDING TO TR EATMENT OF INTEREST INCOME. 3. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT ASSESSEE-COMPANY WAS A SICK COMPANY, THAT AT THE TIME OF ASSESSMENT PROCEEDINGS WHATEVER DETAILS WERE CALLED FOR WERE SUBMITTED, THAT ASSESSMENT WAS PASS ED WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF HEARING, THAT ADDITIONAL EVIDENCES S UBMITTED DURING APPELLATE PROCEEDINGS WERE NOT CONSIDERED BY THE FAA. DEPART MENTAL REPRESENTATIVE (DR) RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS FOUND T HAT FIRST GROUND OF APPEAL IS ABOUT DELAYED PAYMENTS OF EMPLOYEES CONTRIBUTION T OWARDS PROVIDENT FUND AND ESIC. AR SUBMITTED THAT PAYMENTS WERE MADE WELL BE FORE THE DUE DATE OF FILING OF RETURN. WE FIND THAT THE SUBMISSION OF THE ASSESSE E NEEDS RECONSIDERATION BY THE AO. SIMILARLY, WITH REFERENCE TO OTHER GROUNDS OF APPEA L WE FIND THAT FURTHER VERIFICATION IS REQUIRED. ADDITIONAL EVIDENCES PRODUCED BEFORE THE FAA WERE NOT AVAILABLE TO THE AO. THEREFORE, IN THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO. HE IS DIRECTE D TO AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE COMPANY. ASSESSEE IS DIREC TED TO EXTEND FULL CO-OPERATION TO THE AO BY FILING NECESSARY DETAILS WITH REGARD TO T HE ABOVE GROUNDS OF APPEAL. APPEAL FILED BY THE ASSESSEE-COMPANY STANDS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH NOVEMBER, 2012. SD/- SD/- ( . . / I.P. BANSAL ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI, +$ DATE: 7 TH NOVEMBER, 2012 TNMM I.TA. NO. 5937/MUM/2011 HYTONE TEXSTYLES LIMITED 4 * * * * # ## # %, %, %, %, -,)% -,)% -,)% -,)% / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE !,% % //TRUE COPY// *$ *$ *$ *$ / BY ORDER, . .. . / / / / / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI