SYNCHEM CHEMICALS (I) P. LTD, MUMBAI V. ASST CIT RG 10(1), MUMBAI

ITA 6302/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8319 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 10-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: VASANTI B PATEL
• Keywords: Opportunity of being heard
• Section: 28

Judgement Text

, , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , .. , ! ' # BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO.6302/MUM/2011 $ $ $ $ / ASSESSMENT YEAR: 2008-09 SYNCHEM CHEMICALS (I) PVT. LTD. 159, CST ROAD, KALINA MUMBAI-400098. VS. ACIT-10(1) AAYAKAR BHAVAN, MUMBAI. ( %& / ASSESSEE) ( ' / REVENUE) P.A. NUMBER : AAECS 5576 Q %& ( (( ( ) ) ) ) / ASSESSEE BY MS. VASANTI B. PATEL ' ( (( ( ) ) ) ) /REVENUE BY : SHRI NEIL PHILIP ( &*! / DATE OF HEARING : 10/12/2014 +,$ ( &*! / DATE OF PRONOUNCEMENT : 10/12/2014 ' - ' - ' - ' - / O R D E R PER JOGINDER SINGH (JM) : THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22/07/2011 PASSED BY THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, ON THE FOLLOWING GROUNDS. 1. THE CIT (A) HAS ERRED IN APPLYING PROVISIONS OF SECTION 28 (IV) IN RESPECT OF WRITE OFF OF LOAN LIA BILITY OF 2 M/S SYNCHEM CHEMICALS (I) P. LTD. RS. 23,3 1,441 I- AND THEREBY MAKING ADDITION UNDER SECTION 28 (IV) OF THE INCOME TAX ACT. 2. THE CIT (A) FAILED TO APPRECIATE THE EXACT NATURE O F THE TRANSACTION UNDERTAKEN BETWEEN THE APPELLANT AND M/ S. MERU WOODLAND CATERERS PVT. LTD. THE CIT (A) ERRED IN DISREGARDING THE EVIDENCE AND SUBMISSIONS WHICH WER E FILED BEFORE HIM AND ERRED IN ARRIVING AT THE CONCL USION THAT THE APPELLANT COULD NOT PROVE WITH SATISFACTORY EVI DENCE THAT THE AMOUNT PAYABLE TO M/S. MERU WOODLAND CATERERS PVT. LTD. WAS IN NATURE OF LOAN TRANSACTIO N. 3. THE CIT (A) ERRED IN APPLYING PROVISIONS OF SECTION 28 (IV) OF THE INCOME TAX ACT INSPITE OF THE FACT THAT THE CONDITIONS LAID DOWN UNDER SAID SECTION ARE NOT SAT ISFIED. THE APPELLANT HAD NOT RECEIVED ANY BENEFIT OF PERQU ISITE IN KIND WHICH COULD BE VALUED AS ENVISAGED UNDER SE CTION 28 (IV) OF THE ACT 4. THE CIT (A) FAILED TO APPRECIATE THAT THE WAIVER OF LOAN OF RS. 23,31,441/LACS FROM M/S. MERU WOODLAND CATERERS PVT. LTD. WAS NOT IN THE NATURE OF ANY BEN EFIT OR PERQUISITE AS CONTEMPLATED UNDER SECTION 28 (IV) OF THE INCOME TAX ACT. 5. THE APPELLANT CRAVES LEAVE TO ADD. ALTER, AMPLIFY, MODIFY OR DELETE ALL OR ANY OF THE AFORESAID GROUND S AT OR BEFORE THE HEARING. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE MS. VASANTI B. PATEL CHALLENGED THE ORDER OF THE LD COMMISSIONER OF INCOME TAX (APPEALS) AND ADVANCED H ER ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI NEIL PHILIP, LD. DR DEFENDED THE C ONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 3 M/S SYNCHEM CHEMICALS (I) P. LTD. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE COMPANY DECLARED LOSS OF RS.4,79,274/- IN ITS RETURN FILED ON 30 TH SEPTEMBER 2009, WHICH WAS LATER ON REVISED TO INCOME OF RS.29,79,274/-. DURING THE RELEVANT PREV IOUS YEAR, THE ASSESSEE WROTE OFF LOAN LIABILITY OF RS.23,31,1 44/- PAYABLE TO M/S MERU WOODLAND CATERER PVT. LTD. THE ASSESSING O FFICER TREATED THE AMOUNT OF LOAN AS INCOME U/S 28(IV) OF THE ACT. THE STAND OF THE REVENUE IS THAT THE LOAN OF RS.23,31,1 44/- WERE NOT RECEIVED BY THE ASSESSEE COMPANY DURING THE COU RSE OF BUSINESS. THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) CONCLUDED AS UNDER: I HAVE CONSIDERED THE APPELLANT'S SUBMISSIONS. AS EXPLAINED ABOVE, THE APPELLANT COULD NOT PROVE WITH SATISFACT ORY EVIDENCES THAT THE AMOUNT PAYABLE TO M/S. MERU WOODLAND CATER ERS PVT. LTD. WAS IN THE NATURE OF LOAN TRANSACTION. IN THE FACTS AND CIRCUMSTANCES, THE DECISIONS OF COURTS AND TRIBUNAL S RELIED UPON BY THE APPELLANT WERE NOT APPLICABLE IN THE CASE UN DER CONSIDERATION. IN THE FACTS AND CIRCUMSTANCES, THE AO WAS JUSTIFIED IN HOLDING THAT THE TRANSACTION ON AMOUNT OF RS.23,31, 144/- WITH M/S. MERU WOODLAND CATERERS PVT. LTD. WA S THE BENEFIT/ PERQUISITE ARISING FROM BUSINESS OR THE EX CISE OF PROFESSION. THE AO THEREFORE, JUSTIFIED IN ASSESSIN G WAIVER OF LOAN LIABILITY U/S.28(IV) OF THE ACT. THESE GROUNDS OF A PPEAL ARE THEREFORE, DISMISSED. THE LD. COUNSEL ARGUED THAT M/S MERU WOODLAND CATER ER PVT. LTD. LATER ON MERGED WITH THE ASSESSEE COMPANY. NE ITHER FROM 4 M/S SYNCHEM CHEMICALS (I) P. LTD. THE ASSESSMENT ORDER NOR FROM THE IMPUGNED ORDER, T HE EXACT NATURE OF THE TRANSACTION IS NOT CLEAR, THUS, KEEP ING IN VIEW, THE TOTALITY OF FACTS, AS AGREED BY LD. COUNSEL FRO M BOTH SIDES ALSO, THAT THE NATURE OF THE TRANSACTION IS CLEARLY NOT KNOWN, THEREFORE, WE REMAND THIS FILE TO THE FILE OF THE A SSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND DECIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVEN DUE OPPORTUNITY OF BEING HEARD, WITH FURTHER LIBERTY TO FURNISH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM, CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF HEARING ON 10/12/2014. SD/- SD/- ( B.R. BASKARAN) ( JOGINDE R SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED - 10/12/2014 JV, SR. PS / SHEKHAR, P.S/. . . 5 M/S SYNCHEM CHEMICALS (I) P. LTD. ' - ' - ' - ' - ( (( ( .&/ .&/ .&/ .&/ 0 /$& 0 /$& 0 /$& 0 /$& / COPY OF THE ORDER FORWARDED TO : 1. 12 / THE APPELLANT 2. .312 / THE RESPONDENT. 3. 4 ( ) / THE CIT(A)- 4. 4 / CIT 5. /5 .& , , / DR, ITAT, MUMBAI 6. 56 7 / GUARD FILE. ' - ' - ' - ' - / BY ORDER, 3/& .& //TRUE COPY// 8 88 8 / 9 9 9 9 ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI