Asstt.Commissioner of Income Tax-6, Kanpur V. M/s. Prime Products Ltd., Kanpur

ITA 64/LKW/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5145 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Condonation of delay

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.64/LKW/2013 A.Y.:2006 - 07 A.C.I.T. - 6, KANPUR. VS. M/S PRIME PRODUCTS LTD., 87/8, KALPI ROAD, KANPUR. (APPELLANT) (RESPONDENT) C.O.NO.15/LKW/2013 (IN ITA NO.64/LKW/2013) A.Y.:2006 - 07 M/S PRIME PRODUCTS LTD., 87/8, KALPI ROAD, KANPUR. VS. A.C.I.T. - 6, KANPUR. (OBJECTOR) (RESPONDENT) REVENUE BY SHRI ALOK MITRA, D.R. ASSESSEE BY SHRI ABHINAV MEHROTRA, ADVOCATE DATE OF HEARING 13/11/2013 DATE OF PRONOUNCEMENT 2 7 /11/2013 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - I, KANPUR DATED 31/10/2012 FOR ASSESSMENT YEAR 2006 - 2007. 2 2. FIRST WE TAKE UP THE APPEAL FILED BY THE REVENUE. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THAT THE CIT(A) - I, KANPUR HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE CARRY FORWARD OF UNABSORBED CAPITAL LOSS OF RS.59,65,221/ - CONSIDERING THE DATE OF E - FILING (WITHOUT DIGITAL SIGNATURE) OF RETURN AS THE FINAL DATE OF FILING OF THE RETURN WITHOUT CONSIDERING THE CONDITION 6(VI) OF THE CIRCULAR NO.9/2006 DATED 10/10/20 06 ISSUED BY THE DEPARTMENT, WHICH WAS THE GUIDELINE FOR EFFECTIVE DUE DATE FOR FILING OF THE RETURN. 2. THAT THE ORDER OF THE LEARNED CIT(A) BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL OR TAKE ADDITIONAL GROUND DURING THE PENDENCY OF THIS APPEAL. 3. IT WAS SUBMITTED BY LEARNED D.R. THAT AS PER THE CIRCULAR NO.9/2006 DATED 10/10/2006, COPY O F WHICH HAS BEEN FURNISHED BEFORE US, THE DATE OF FILING THE RETURN OF INCOME BY THE ASSESSEE IS TO BE CONSIDERED AS 29/12/2006 AND, THEREFORE, THE ORDER PASSED BY LEARNED CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORED. 4. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT ITR - V WAS DULY FILED BY THE ASSESSEE AS PER THE REQUIREMENT OF LAW AND THIS REQUIREMENT OF FILING PAPER RETURN AS PER CIRCULAR NO. 9 DATED 10/10/20 06 IS NOT MANDATORY AND, THEREFORE, THE ORDER PASSED BY LEARNED CIT(A) ON THIS ISSUE SHOULD BE UPHELD. 3 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THA T THE PROCEDURE REGARDING E - FILING OF RETURN IS NOT SPECIFIED IN THE ACT AND IT IS BEING IMPLEMENTED BY WAY OF BOARD CIRCULAR S AND, THEREFORE, WE CANNOT IGNORE BOARD CIRCULAR NO. 9/2006 DATED 10/10/2006. ADMITTEDLY, THE RETURN OF INCOME WAS FILED BY THE A SSESSEE ELECTRONICALLY ON 30/11/2006 AND PAPER RETURN WAS FILED BY THE ASSESSEE ON 29/12/2006 AS PER COPY OF ACKNOWLEDGEMENT OF E - RETURN AVAILABLE ON PAGE 1 OF THE PAPER BOOK . H ENCE, THIS IS ADMITTED POSITION THAT THE RETURN WAS FILED BY THE ASSESSEE AFTE R BOARD CIRCULAR DATED 10/10/2006 AND HENCE, IT WAS VERY MUCH POSSIBLE ON THE PART OF THE ASSESSEE TO COMPLY WITH THE REQUIREMENT TO FILE PAPER RETURN WITHIN 15 DAYS FROM THE DATE OF FILING THE E - RETURN AS PROVIDED IN THE BOARD CIRCULAR BUT THE ASSESSEE HA S NOT DONE SO AND HE HAS FILED THE PAPER RETURN ON 29/12/2006. AS PER BOARD CIRCULAR NO.9/2006 DATED 10/10/2006, IF THE PAPER RETURN IS FILED WITHIN 15 DAYS FROM THE DATE OF FILING OF E - RETURN, THEN THE DATE OF FILING OF THE RETURN OF INCOME WILL BE THE D ATE OF FILING THE E - RETURN AND IF THIS CONDITION IS NOT SATISFIED THEN THE DATE OF FILING PAPER RETURN HAS TO BE TAKEN AS THE DATE OF FILING THE RETURN OF INCOME. IN THE PRESENT CASE, THE ASSESSEE HAS NOT SATISFIED THIS CONDITION AS PER BOARD CIRCULAR NO. 9/2006 DATED 10/10/2006 OF FILING THE PAPER RETURN WITHIN 15 DAYS FROM THE DATE OF FILING OF E - RETURN . T HEREFORE, THE ASSESSING OFFICER HAS RIGHTLY AD OPTED THE DATE O F 29/12/2006 AS DATE OF FILING RETURN OF INCOME. 5.1 IN VIEW OF ABOVE DISCUSSION, WE FIND THAT LEARNED CIT(A) HAS WRONGLY STATED IN PARA 4.2 OF HIS ORDER THAT THE ASSESSING OFFICER HAS MISDIRECTED HIMSELF BY TAKING THE DATE OF FILING THE COPY OF 4 ACKNOWLEDGEMENT I.E. 29/12/2006 AS THE DATE OF FILING OF E - RETU RN. THE ASSESSING OFFICER HAS NOT TAKEN THE DATE OF FILING THE E - RETURN AS29/12/2006 BUT HE HAS AD OPTED THE DATE OF FILING OF RETURN AS 29/12/2006, WHICH IS AS PER BOARD CIRCULAR NO. 9/2006 DATED 10/10/2006 AND HENCE, WE REVERSE THE ORDER OF LEARNED CIT(A ) AND RESTORE THAT OF THE ASSESSING OFFICER. THIS GROUND OF REVENUES APPEAL IS ALLOWED. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. 6. NOW WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. IN ITS CROSS OBJECTION, THE ASSESSEE HAS RAIS ED THE FOLLOWING GROUNDS: 1. T HAT THE LD. CIT(A) - I, KANPUR HAS ERRED IN LAW AND ON FACTS IN DECIDING THE ASSESSEES GROUND OF APPEAL RELATING TO EXPENSES OF RS.3,98.708/ - WITHOUT OBSERVING THE MANDATE OF THE HONBLE ITAT, LUCKNOW BENCH IN THE CASE OF M/S BALAJI MOTORS AND FURTHER IS NOT ALLOWING THE DEDUCTION FOR SUCH EXPENSES EVEN THOUGH THE GENUINENESS OF THE SAME HAS NOT BEEN DOUBTED BY THE AO. 2. THAT IN DOING SO, THE LD. CIT(A), COMPLETELY IGNORED THE FACT THAT THE TRANSACTION CONTEMPLATED IN THE SA ID AGREEMENT IS ALREADY WITHIN THE KNOWLEDGE OF THE DEPARTMENT AND FURTHER THAT THIS IS NOT THE FIRST YEAR OF BUSINESS OF THE ASSESSEE. THE ASSESSEE WAS NOT AFFORDED DUE AND REASONABLE OPPORTUNITY TO PLEAD ITS CASE AND SUPPLY REQUISITE EVIDENCE. 3. THAT T HE ORDER PASSED BY THE LD. CIT (A) IS CRYPTIC AND NON - SPEAKING, DEALING WITH THIS GROUND OF APPEAL. 7. THE CROSS OBJECTION WAS FILED LATE BY THE ASSESSEE. THE ASSESSEE HAS SUBMITTED AN APPLICATION FOR CONDONATION OF DELAY IN FILING THE CROSS 5 OBJECTION IN WHICH IT IS STATED BY THE ASSESSEE THAT BECAUSE OF HIS VARIOUS AILMENTS AND OLD AGE OF 64 YEARS, HE COULD NOT PAY ATTENTION TO HIS INCOME TAX MATTERS IN PROPER MANNER AND, THEREFORE, THERE WAS DELAY IN FILING THE CROSS OBJECTION. HE HAS ALSO SUBMITTED A M EDICAL CERTIFICATE IN SUPPORT OF ITS CONTENTION AND HENCE, WE FEEL IT FIT AND PROPER TO CONDONE THE DELAY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 8. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THERE WAS ORAL ARRANGEMENT BETWEEN THE ASSESSEE AND THE LESSEE AND, THEREFORE, THE EXPENSES CLAIMED BY THE ASSESSEE REGARDING SALARY, ALLOWANCES AND BONUS PAID TO CINEMA STAFF SHOULD BE ALLOWED AS EXPENDITURE INCURRED FOR BUSINESS OR FOR EARNING INCOME FROM OTHER SOURCES AS THE CASE MAY BE. H E ALSO SUBMITTED THAT THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT ARE NOT REDUCED IN WRITING TILL DATE AND IN THIS REGARD , HE DRAWN OUR ATTENTION TO PAGE NO. 27 OF THE PAPER BOOK AND IT WAS POINTED OUT THAT AS PER NOTE NO. 2B IN NOTES ON ACCOUNTS, IT I S STATED BY THE AUDITORS ALSO THAT THE AGREEMENT REGARDING LEASING THE CINEMA UNIT OF THE ASSESSEE COMPANY IS YET TO BE DOCUMENTED. AT THIS JUNCTURE , A QUERY WAS RAISED BY THE BENCH AS TO WHETHER THE ASSESSEE HAS FURNISHED ANY CONFIRMATION FROM THE LESSEE THAT THERE WAS ANY ORAL AGREEMENT IN RESPECT OF PROVIDING SERVICES OF EMPLOYEES ALSO ALONG WITH THE LEASING OF THE CINEMA UNIT AND IN REPLY, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT NO CONFIRMATION IS AVAILABLE ON RECORD. 9. LEARNED D.R. SUPP ORTED THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE. 6 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT A CLEAR FINDING IS GIVEN BY LEARNED CIT(A) IN PARA 3.2 OF HIS ORDER THAT LEARNED A.R. HAS NOT GIVEN DETAILS OF ARRANGEMENT BETWEEN THE COMPANY AND THE LESSEE, WHO IS RUNNING THE CINEMA HALL AND, THEREFORE, ONE CANNOT KNOW IF THIS EXPENDITURE HAS BEEN INCURRED SOLELY FOR THE PURPOSE OF EARNING SUCH HIRE CHARGES. INSPITE OF THIS CLEAR FINDING OF LE ARNED CIT(A), NO SUCH DETAILS OF THE ARRANGEMENT BETWEEN THE COMPANY AND THE ASSESSEE HAS BEEN BROUGHT ON RECORD EVEN BEFORE US AND, THEREFORE, NO CASE HAS BEEN MADE OUT TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. WE, THEREFORE, UPH O LD THE SAME. 11. IN THE GROUNDS OF CROSS OBJECTION, IT IS ALSO MENTIONED BY THE ASSESSEE IN GROUND NO.1 THAT IN DECIDING THIS GROUND , THE LEARNED CIT(A) HAS NOT OBSERVED THE MANDATE OF THE TRIBUNAL IN THE CASE OF BALAJI MOTORS IN I.T.A. NO.610 AND 879/LKW/04 DA TED 04/07/2011, AVAILABLE IN PAPER BOOK ON PAGE 2 TO 14, BUT IN THE SAID JUDGMENT , NO PAGE OR PARA HAS BEEN HIGHLIGHTED AND IN COURSE OF HEARING BEFORE US, IT WAS NOT POINTED OUT BY THE ASSESSEE AS TO WHICH PARA IS RELEVANT IN THE PRESENT CASE. STILL WE H AVE GONE THROUGH THIS TRIBUNAL ORDER AND WE FIND THAT IT WAS HELD BY THE TRIBUNAL IN THIS CASE THAT ACTION OF THE ASSESSING OFFICER IN TREATING THE INCOME FROM HOUSE PROPERTY HAS BEEN ACCEPTED IN PRINCIPLE AND THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE EXPENSES, WHICH WERE RELATED TO BUSINESS, HAVE NOT BEEN ALLOWED TO SET OFF. IN THAT CASE, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF SET OFF U/S 71(1) OF THE ACT IF HE ASSESSEE IS ELIGIBLE IN ACCORDANCE WITH LAW. IN THE PRESENT CASE, A CLEAR FINDING IS GIVEN BY LEARNED CIT(A) THAT THE ASSESSEE COULD NOT BRING ANY EVIDENCE ON RECORD TO SHOW THAT THESE EXPENSES HAVE BEEN 7 INCURRED FOR EARNING THE HIRE CHARGES INCOME AND THIS FINDING OF LEARNED CIT(A) COULD NOT BE CONTROVERTED BEFORE US AND, THEREFORE, IN OUR CONSIDERED OPINION, THIS TRIBUNAL DECISION HAS NO RELEVAN CE IN THE PRESENT CASE. AS A RESULT, THE CROSS OBJECTION OF THE ASSESSEE STANDS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 / 1 1 / 2 0 1 3 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW