M/s Roto Pumps Ltd., V. Asstt. Commissioner of Income Tax, Kanpur

ITA 703/LKW/2014

• Counselvise Citation: 70323714 RSA 2014
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUNIT KUMAR
• Assessee Lawyers: P K KAPOOR
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Assessment record; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.703/LKW/2014 ASSESSMENT YEAR:2003-04 M/S ROTO PUMPS LTD. C-6, PANKI INDUSTRIAL AREA KANPUR V. ACIT RANGE VI KANPUR TAN/PAN:AAACR6491D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. P. K. KAPOOR, C.A. RESPONDENT BY: SHRI. PUNIT KUMAR, D.R. DATE OF HEARING: 09 02 2015 DATE OF PRONOUNCEMENT: 09 02 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER:- 1. BECAUSE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DECIDING THE APPEAL EX-PARTE ON THE GROUNDS THAT; A) NUMBER OF ADJOURNMENTS (AS PER PARTICULARS GIVEN IN PARA 3 OF THE APPELLATE ORDER) HAD BEEN SOUGHT; B) FINALLY AS PER NOTICE OF HEARING DATED 20.05.2014 THE APPEAL WAS FIXED FOR HEARING ON 23.05.2014 BUT THE SAME WAS RETURNED BACK BY THE POSTAL , AUTHORITY WITH THE POSTAL REMARK 'LEFT'. 2. BECAUSE THE 'CIT(A)' ON A DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THAT THE NOTICE DATED 20.05.2014 WAS RETURNED BACK, PRINCIPLES OF NATURAL JUSTICE DEMANDS ONE MORE :- 2 -: OPPORTUNITY OF BEING HEARD SHOULD HAVE BEEN PROVIDED BEFORE THE ORDER DATED 25.05.2014 WAS PASSED AGAINST THE APPELLANT. 3.. BECAUSE, WITHOUT PREJUDICE TO THE AFORESAID, THE TIME ALLOWED FOR COMPLIANCE AS PER LAST NOTICE DATED 20.05.2014 (WAS TOO SHORT WITHIN WHICH EVEN IF THE SAME WAS SERVED, NO COMPLIANCE COULD HAVE BEEN MADE. WITHOUT PREJUDICE TO THE AFORESAID 3. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN MAKING/UPHOLDING ADHOC DISALLOWANCES OUT OF EXPENSES CLAIMED UNDER VARIOUS HEADS, AS PER PARTICULARS GIVEN HEREIN BELOW:- SI. NO. HEAD OF EXPENDITURE AMOUNT CLAIMED AS DEDUCTION (RS.) DISALLOWANCE MADE/SUSTAIN ED BY THE AUTHORITIES BELOW (RS.) REASON FOR DISALLOWANCE (I) (I) TRAVELLING EXPENSES 63,97,934 3,19,896 DETAILS OF THESE EXPENSES WERE NOT VERIFIABLE, BESIDES, NEITHER THE GUEST WAS IDENTIFIED, NOR COMMERCIAL EXPEDIENCY OF THESE EXPENSES. (II) VEHICLE RUNNING MAINTENANCE EXPENSES INCLUDING 16,86,679 84,333 DETAILS OF THESE EXPENSES WERE NOT VERIFIABLE, BESIDES, THE PERSONAL USER OF VEHICLE CANNOT BE RULED OUT. DEPRECIATION 6,74,294 33,714 :- 3 -: (III) MISCELLANEOUS EXPENSES 58,59,028 2,92,951 THE DETAILS OF THESE EXPENSES WERE NOT VERIFIABLE BESIDES SOME OF THE EXPENSES ARE IN CASH THROUGH SELF MADE VOUCHERS. 4. BECAUSE EXPENSES CLAIMED UNDER VARIOUS HEADS, AS VOUCHED AND FULLY VERIFIABLE, WERE DULY ENTERED IN THE BOOKS OF ACCOUNT AS HAD BEEN MAINTAINED BY THE APPELLANT ON DAY TO DAY BASIS AND NO SPECIFIC DEFECT OR DISCREPANCY HAVING BEEN FOUND IN SUCH BOOKS OF ACCOUNT AND OTHER RECORDS EVEN AFTER EXTENSIVE EXAMINATION AND VERIFICATION CARRIED OUT BY THE ASSESSING OFFICER (AS IS AMPLY BORNE OUT FROM THE ASSESSMENT RECORDS), NO DISALLOWANCE AS SUCH WAS CALLED FOR AND THE CIT(A) HAS GROSSLY ERRED IN SUSTAINING THE DISALLOWANCES AS PER PARTICULARS GIVEN IN GROUND NO.3 HEREINFORE. 5. BECAUSE IN PARTICULAR, IT IS STATED THAT THE APPELLANT BEING A BODY CORPORATE AND A LISTED COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED, NO DISALLOWANCE ON ACCOUNT OF PERSONAL USER WAS PERMISSIBLE AND THE SAME BEING WHOLLY UNCALLED FOR, THE DISALLOWANCES OF RS.1,18,047/- OUT OF VEHICLE RUNNING MAINTENANCE EXPENSES COULD NOT HAVE BEEN SUSTAINED BY THE CIT(A). 6. BECAUSE, WITHOUT PREJUDICE TO GROUNDS RAISED ABOVE, IN ANY CASE THE DISALLOWANCES AS MADE /SUSTAINED BY THE AUTHORITIES BELOW, AS PER PARTICULARS GIVEN IN GROUND NO.3 HEREINF ORE, ARE MUCH TOO HIGH AND EXCESSIVE. 7. BECAUSE THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF CLAIM FOR DEDUCTION UNDER SECTION 80 HHC, BY REFERRING TO AND RELYING UPON THE DECISION OF APEX COURT IN THE CASE OF IPCA LABORATORIES VS. DY. CIT REPORTED IN 266 ITR PAGE 531 AND IN REJECTING THE APPELLANT'S GROUND IN THIS RESPECT. :- 4 -: 8. BECAUSE THE SAID DECISION OF APEX COURT DEALT WITH AN ALTOGETHER DIFFERENT PROPOSITION OF LAW, WHICH WAS NOT APPLICABLE IN THE INSTANT CASE. 9. BECAUSE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT ACCEPTING THE APPELLANTS COMPUTATION FOR RELIEF UNDER SECTION 80 HHC OF THE ACT. 10. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS LAW AND PRINCIPLES OF NATURAL JUSTICE. 2. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT NO NOTICE OF HEARING WAS SERVED UPON THE ASSESSEE FROM THE OFFICE OF THE LD. CIT(A). THEREFORE, ASSESSEE COULD NOT APPEAR BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS DISPOSED OF THE APPEAL EX-PARTE. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE LD. CIT(A), WITH THE SUBMISSION THAT THE LD. CIT(A) HIMSELF HAS RECORDED IN HIS ORDER THAT THE NOTICES ISSUED TO THE ASSESSEE WERE RECEIVED BACK WITH THE POSTAL REMARK LEFT. THEREFORE, THE NOTICE OF HEARING WAS NOT SERVED UPON THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT AFTER FILING THE APPEAL BEFORE THE LD. CIT(A), THE OFFICE OF THE ASSESSEE WAS SHIFTED FROM KANPUR AND DUE INTIMATION WITH REGARD TO THE CHANGE OF ADDRESS WAS GIVEN IN THE OFFICE OF THE LD. CIT(A), BUT NO NOTICE WAS ISSUED AT THE CORRECT ADDRESS. THEREFORE, IN THE INTEREST OF JUSTICE, THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THE MATTER MAY BE RESTORED BACK TO HIS FILE WITH A DIRECTION TO ADJUDICATE THE APPEAL ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. THE LD. D.R. HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). :- 5 -: 4. HAVING CAREFULLY PERUSED THE ORDER OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS DISPOSED OF THE APPEAL OF THE ASSESSEE EX-PARTE WITHOUT EFFECTING SERVICE OF NOTICE OF HEARING UPON THE ASSESSEE. SINCE THE LD. CIT(A) HAS ADJUDICATED THE APPEAL WITHOUT AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE APPEAL AFRESH ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO EXTEND THE CO-OPERATION TO THE LD. CIT(A) IN DISPOSAL OF THE APPEAL. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:18 TH FEBRUARY, 2015 JJ:0902 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR