Y.Uma Maheshwari, CHENNAI V. ACIT Non Corporate Circle 14, CHENNAI

ITA 677/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4061 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN IRS
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Reasonable cause

Judgement Text

, (SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL, C (SMC) BENCH : CHENNAI . , ! ' # ' $ . %& , ( * + [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] ./I.T.A. NO.677/CHNY/2018. / ASSESSMENT YEAR : 2008-2009. SMT. Y. UMA MAHESHWARI, PROP. YASHU RENAISSANCE, NEW NO.56, OLD NO.59, 12 TH STREET, ANNA NAGAR, CHENNAI 600 102. [PAN AAKPU 9674J] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 14, CHENNAI. ( ,- / APPELLANT) ( ./,- /RESPONDENT) / APPELLANT BY : SHRI. M. KARUNAKARAN, ADV. /RESPONDENT BY : SHRI. B. SAGADEVAN, IRS, JCIT. /DATE OF HEARING : 07-08-2018 ! /DATE OF PRONOUNCEMENT : 09-08-2018 0 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:- IN THIS APPEAL FILED BY THE ASSESSEE, WHICH IS DIRECTED AGAINST AN ORDER DATED 20.12.2017 OF LD. COMMISSION ER OF INCOME TAX (APPEALS)-7, CHENNAI, IT HAS TAKEN THE FOLLOWING GR OUNDS:- ITA NO.677/2018 :- 2 -: 1. THE AUTHORITIES BELOW ERRED IN PASSING THE ORDERS EX-PARTE WITHOUT AFFORDING REASONABLE OPPORTUNITY A ND IN DETERMINING THE TOTAL INCOME OF THE APPELLANT AT 13,36,634/- AGAINST RS. RETURNED. 2.THE APPELLANT SUBMITS THAT THE NOTICES WERE ISSUE D BOTH BY THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME-TAX (APPEALS) AT NETHAJI STREET, ANNA NAG AR INSTEAD OF THE CORRECT ADDRESS OF 12TH STREET, ANNA NAGAR AND THE APPELLANT HAD NEVER RECEIVED ANY NOTICES FROM THE DEPARTMENT AND THUS PREVENTED BY REASONABLE CAUSE FROM RESPONDING TO THE VARIOUS NOTICES SENT BY THE DEPARTMENT. 3.THE AUTHORITIES BELOW ERRED IN DISALLOWING 20% OF THE WAGES AND LABOUR CLAIMED ON ESTIMATED BASIS WHEN THE EXPENSES ARE FULLY VOUCHED AND QUITE REASONABLE HAVING REGARD TO THE TURNOVER OF THE APPELLANT AND THE NATURE OF BUSINESS CARRIED ON BY HER. 4. THE AUTHORITIES BELOW ERRED IN DISALLOWING MORTGAGE LOAN INTEREST OF RS.2,40,823/-. 5. THE APPELLANT SUBMITS THAT THE MORTGAGE LOAN WAS USED IN THE BUSINESS OF THE APPELLANT AND THEREFORE THE INTEREST IS CLEARLY ADMISSIBLE AS DEDUCTION U/S 36( 1 )(III) OF THE ACT 6. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSMENT MAY BE SET ASIDE TO THE ASSESSING OFFICER TO COMPLE TE THE ASSESSMENT AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY AND TO DELETE THE ADDITIONS MADE IN THE ASSESSMENT AND RENDER JUSTICE. 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. ASS ESSING OFFICER HAD COMPLETED THE ASSESSMENT U/S.144 OF TH E INCOME TAX ACT, 1961 (IN SHORT THE ACT) BY MAKING A DISALLOWAN CE OF 20% OF THE ITA NO.677/2018 :- 3 -: EXPENDITURE CLAIMED UNDER THE HEADS WAGES, LABOUR C HARGES AND SALARIES. APART FROM THAT, AS PER THE LD. AUTHORI SED REPRESENTATIVE, THE WHOLE OF THE MORTGAGE LOAN INTEREST WAS ALSO DI SALLOWED. CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE WA S THAT ASSESSEE COULD NOT APPEAR BEFORE LD. ASSESSING OFFICER AS WE LL AS LD. COMMISSIONER OF INCOME TAX (APPEALS) DUE TO WRONG A DDRESS BEING MENTIONED IN THE NOTICES ISSUED BY THESE AUTHORITI ES. AS PER THE LD. AUTHORISED REPRESENTATIVE, IF GIVEN AN OPPORTUNITY ASSESSEE WOULD BE ABLE TO SHOW THAT EXPENDITURE INCURRED BY IT IN IT S CIVIL CONTRACT AND REAL ESTATE BUSINESS WAS CORRECT WITH NECESSARY EVI DENCE. LD. AUTHORISED REPRESENTATIVE ALSO GAVE AN UNDERTAKING THAT ASSESSEE WOULD ENTER APPEARANCE BEFORE LOWER AUTHORITIES WIT HOUT FAIL. 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT DESPITE NUMBER OF OPPORTUNITIES GIVEN, ASSESSEE HAD FAILED TO ENTER APPEARANCE BEFORE LD. ASSESSING OFFICER OR LD. COMM ISSIONER OF INCOME TAX (APPEALS). AS PER THE LD. DEPARTMENTAL REPRESEN TATIVE, ASSESSEE ALSO DID NOT INTIMATE CHANGE OF ADDRESS. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT ASSESSMENT WAS ITA NO.677/2018 :- 4 -: COMPLETED U/S.144 OF THE ACT FOR WANT OF CO-OPERATI ON FROM THE ASSESSEE. HOWEVER, LD. ASSESSING OFFICER DOES MENT ION IN HIS ORDER THAT LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAD APPEARED BEFORE HIM AND FILED CERTAIN DETAILS. NEVERTHELE SS, IT SEEMS ASSESSEE DID NOT RESPOND TO A SHOW CAUSE NOTICE ISSUED ON 24 .12.2010. LD. ASSESSING OFFICER HAD DISALLOWED 20% ON THE WAGES, LABOUR CHARGES AND SALARIES AND WHOLE OF THE MORTGAGE LOAN INTERES T. THOUGH SEVERAL NOTICES, WERE ISSUED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) DURING THE APPEAL PROCEEDINGS, NOBODY APPEARED. H OWEVER LD. COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED MORTGA GE LOAN INTEREST OF E1,50,000/-, WHILE SUSTAINING THE OTHER DISALLOW ANCES. NEVERTHELESS, CONSIDERING THE UNDERTAKING GIVEN BY THE LD. COUNSE L FOR THE ASSESSEE, WE ARE OF THE OPINION THAT ASSESSEE CAN BE GIVEN ON E MORE OPPORTUNITY FOR EXPLAINING ITS CASE BEFORE LD.CIT (APPEALS) WIT H NECESSARY EVIDENCE. ASSESSEE SHALL WITHOUT FAIL ENTER APPEARANCE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THE DATE OF HEARING. LD . COMMISSIONER OF INCOME TAX (APPEALS) SHALL PROCEED IN ACCORDANCE WI TH LAW, WHETHER OR NOT ASSESSEE ENTERS APPEARANCE ON THE SCHEDULED DATE OF HEARING. ASSESSEE FORTHWITH HAS TO INTIMATE IN WRITING TO T HE LD. ASSESSING OFFICER AS WELL AS LD. COMMISSIONER OF INCOME TAX ( APPEALS) ITS NEW ADDRESS. WITH THESE OBSERVATIONS, WE SET ASIDE THE ORDER OF THE ITA NO.677/2018 :- 5 -: LD. COMMISSIONER OF INCOME TAX (APPEALS) AND REMIT THE CASE BACK TO HIS FILE FOR CONSIDERATION AFRESH IN ACCORDANCE WIT H LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 9TH DAY OF AU GUST, 2018, AT CHENNAI. SD/- SD/- ( ' # ' $ . %& ) ( DUVVURU RL REDDY ) ( / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:9TH AUGUST, 2018. KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF