Prime Dyestuff Industries, Ahmedabad V. The Income tax Officer,Ward-3(1), Ahmedabad

ITA 687/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85783 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: U S BHATI
• Keywords: Unexplained investment; Depreciation; Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , , BEFORE SHRI BEFORE SHRI G.D. AGARWAL,VICE PRESIDEN T (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.687/AHD/2011 ( / ASSESSMENT YEAR : 2007-08) PRIME DYESTUFF INDUSTRIES 119, GVMM, ODHAV AHMEDABAD / VS. THE ITO WARD-3(1) AHMEDABAD ! '# ./ ./ PAN/GIR NO. : AAGPP 1591 D ( !% / APPELLANT ) .. ( &'!% / RESPONDENT ) !%(' / APPELLANT BY : SHRI U.S. BHATI, A.R. &'!%)(' / RESPONDENT BY : SHRI DINESH SINGH, SR.DR * +) ,# / DATE OF HEARING 26/02/2015 -./0 ) ,# / DATE OF PRONOUNCEMENT 19/03/2015 '/ O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XVI, AHMEDAB AD (CIT(A) IN SHORT) DATED 29/12/2010 PERTAINING TO ASSESSMEN T YEAR (AY) 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AND ON FACTS IN NOT ALLOWING SOME OF THE GROUNDS OF APPEAL ALTHOUGH HE WAS SATISFIED WITH THE REASONABLE CAUSE PLEADED BEFORE HIM VIDE GROUND NO.1 OF THE APPEAL. ITA NO.687/AHD/ 2011 PRIME DYESTUFF INDUSTRIES VS. ITO ASST.YEAR 2007-08 - 2 - 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AND ON FACTS IN CONFIRMING THE ASSESSMENT ORDER PAS SED U/S.144 OF THE INCOME TAX ACT, 1961 THOUGH THE LD.A.O. HAD NOT ISSUED ANY SHOW CAUSE NOTICE TO THE EFFECT OF FRAMING ASSE SSMENT U/S.144 OR FOR OTHER ADDITIONS AND DISALLOWANCES DE SPITE THE FACT THAT THE LAST HEARING WAS FIXED ON 23 RD OCTOBER, 2009 AND THE IMPUGNED ASSESSMENT ORDER WAS PASSED ON 30 TH DECEMBER, 2009. 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AND ON FACTS IN DIRECTING THE LD.A.O. TO ALLOW ONLY OPENING BALANCES OF UNSECURED LOANS, IF THE DETAILS FILED B Y APPELLANT ARE FOUND VERIFIABLE. 4.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AND ON FACTS IN NOT ADJUDICATING THE ISSUE REGARDIN G ADDITION OF RS.8,50,081/- ON ACCOUNT OF DIFFERENTIAL AMOUNT OF UNSECURED LOANS MADE U/S.68 OF THE ACT. 5.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FU RTHER ERRED IN LAW AND ON FACTS IN ALLOWING INTEREST ON THE UNS ECURED LOANS TO THE EXTENT OF OPENING BALANCES OF UNSECURED LOAN CR EDITORS ONLY ALTHOUGH THE GROUND RAISED WAS IN RESPECT OF INTERE ST AMOUNT DISALLOWED RS.1,02,009/- PERTAINING TO THE YEAR UND ER APPEAL. 6.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AND ON FACTS IN PARTLY ALLOWING THE GROUND RELATING TO UNEXPLAINED INVESTMENT IN ASSETS AMOUNTING TO RS.2, 94,896/- AND DEPRECIATION IN RESPECT OF SUCH ASSETS ALTHOUGH THE DETAILS OF ADDITIONS DURING THE YEAR WERE AVAILABLE TO HIM. 7.0 THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF EXPE NSES TO THE EXTENT OF RS.2,21,487/-. 8.0 THE APPELLANT MAY BE ALLOWED TO ADD, AMEND, ALTER O R RAISE ADDITIONAL GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.144 OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER ITA NO.687/AHD/ 2011 PRIME DYESTUFF INDUSTRIES VS. ITO ASST.YEAR 2007-08 - 3 - DATED 30/12/2009, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN O F RS.8,50,081/-, INTEREST ON THE ABOVE LOAN OF RS.1,02,009/-, UNEXPL AINED INVESTMENT IN ASSETS OF RS.2,94,896/-, DEPRECIATION ON THE NET AS SETS OF RS.44,234/- AND OUT OF EXPENSES FOR WANT OF VERIFICATION OF RS.2,21 ,487/-. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, PARTLY ALLOWED THE APP EAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE US. 3. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE S HRI U.S.BHATI SUBMITTED THAT THE ASSESSEE COULD NOT PLACE ANY EVI DENCE BEFORE THE AO AS THE ASSESSEE DID NOT APPEAR BEFORE THE AO DUE TO ILL-HEALTH. HE SUBMITTED THAT RELEVANT EVIDENCES WERE PLACED BEFOR E THE LD.CIT(A). HOWEVER, HE HAS NOT OBTAINED ANY REMAND REPORT FRO M THE AO. THE LD.CIT(A) REJECTED THE EVIDENCES FURNISHED IN RESPE CT OF THE CREDIT BALANCES. HE SUBMITTED THAT IN THE INTEREST OF NAT URAL JUSTICE, THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO PRESENT ITS CASE. 4. ON THE OTHER HAND, LD.SR.DR SHRI DINESH SINGH VE HEMENTLY OPPOSED THE SUBMISSIONS OF THE LD.COUNSEL FOR THE A SSESSEE AND SUBMITTED THAT THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY. ITA NO.687/AHD/ 2011 PRIME DYESTUFF INDUSTRIES VS. ITO ASST.YEAR 2007-08 - 4 - 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSEE HAS RAISED BEFORE THE LD. CIT(A) GROUND NO.1 WHICH READS AS UNDER:- 1. YOUR KINDNESS IS EARNESTLY REQUESTED THAT AS I WAS SUFFERING FROM SEVERE HEALTH PROBLEMS DUE TO HEAVY LOSSES SUFFERED IN THE BUSINESS AND CAPITAL PROBLEMS, MY CASE BE CONSIDERED SYMPATHETIC ALLY AND I MUST BE GIVEN A CHANCE OF HEARING AND THIS ASSESSMENT BE CA NCELLED/SET ASIDE AND FRESH ASSESSMENT BE ORDERED. I PRODUCE HEREWIT H COPIES OF MEDICAL CERTIFICATES ISSUED BY MY DOCTORS. IT MAY BE NOTED THAT IN SIMILAR CASE BEFORE VAT AUTHORITIES MY CASE WAS CONSIDERED SYMPA THETICALLY AND I WAS GIVEN A CHANCE FOR APPEARING BEFORE THE CONCERN ED AUTHORITIES FOR SCRUTINY PROCESS. 5.1. THE LD.CIT(A) HAS ALLOWED THE AFOREMENTIONED G ROUND, BY OBSERVING AS UNDER:- 2.1. THIS IS REGARDING THE APPELLANT BEING GIVEN A CHANCE OF APPEARING BEFORE THE APPELLATE AUTHORITIES, BECAUSE HE WAS SUFFERING WITH SEVERE HEALTH PROBLEMS DUE TO LOSSES IN BUSINE SS AND OTHER PROBLEMS. AS STATED ABOVE, THE PARTNER ATTENDED ON FOUR OCCASIONS AND THE ADJOURNMENT SO GIVEN AS REQUESTED BY HIM FROM 1 9/10/2010, 23/12/2010 THAT IS FOR ALMOST 2 MONTHS. THE APPELL ANT STILL DID NOT FILE ANY DETAIL AT ALL. ON 27 TH THE APPELLANT HAS FILED COPIES OF SOME PAPERS BUT NO DETAILS WHICH ARE TAKEN INTO ACCOUNT. HENCE THIS GROUND HAS BEEN ALLOWED AND TAKEN CARE OF. 5.2. HOWEVER, THE LD.CIT(A) PROCEEDED THE MATTER DE SPITE HAVING ALLOWED THE GROUND NO.1 WITHOUT SEEKING ANY REMAND REPORT FROM THE AO. WE ARE OF THE CONSIDERED VIEW WHEN THE LD.CIT( A) CAME TO THE CONCLUSION THAT THE ASSESSEE WAS PREVENTED BY REASO NABLE CAUSE FOR NOT FURNISHING THE DETAILS BEFORE THE AO, UNDER THESE FACTS, HE OUGHT TO HAVE ITA NO.687/AHD/ 2011 PRIME DYESTUFF INDUSTRIES VS. ITO ASST.YEAR 2007-08 - 5 - SOUGHT REMAND REPORT FROM THE AO IN RESPECT OF THE EVIDENCES PLACED BEFORE HIM BEFORE PROCEEDING THE MATTER. THEREFORE , WE HEREBY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND HEREBY DIRE CT THE AO TO MAKE DE NOVO ASSESSMENT. THE ASSESSEE IS ALSO DIRECTED TO FURN ISH THE RELEVANT MATERIAL BEFORE THE AO IN SUPPORT OF ITS CLAIM. TH E ASSESSEE WOULD NOT SEEK FRIVOLOUS ADJOURNMENT. THUS, GROUNDS RAISED I N THE ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 19 TH DAY OF MARCH, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 19/ 03 /2015 4,..* , .*../ T.C. NAIR, SR. PS ITA NO.687/AHD/ 2011 PRIME DYESTUFF INDUSTRIES VS. ITO ASST.YEAR 2007-08 - 6 - !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. !% / THE APPELLANT 2. &'!% / THE RESPONDENT. 3. 567 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-XVI, AHMEDABAD 5. 9 :&*67 , ,670 , 5 / DR, ITAT, AHMEDABAD 6. : <= + / GUARD FILE. / BY ORDER, ' 9& //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 26.2.2015 (DICTATION-PAD 6- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..10.3.2015 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.19.3.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.3.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER