M/S. Gopal & Co., Kanpur V. INCOME TAX OFFICER-2(1), Kanpur

ITA 723/LKW/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2537 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 08-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Assessee Lawyers: S P BAJPAI
• Keywords: Depreciation; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC , LUCKNOW BEFORE SHRI. N .S. SAINI , ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 723/LKW/2017 ASSESSMENT YEAR: 2014 - 15 M/S GOPAL & CO. 46/91, HATIA KANPUR V. INCO ME TAX OFFICER 2(1) KANPUR T AN /PAN : AABFG2077N (APP ELL A NT) (RESPONDENT) APP ELL ANT BY: SHRI S. P. BAJPAI, ADVOCATE RESPONDENT BY: SHRI C. K. SINGH, D.R. DATE OF HEARING: 12 10 201 8 DATE OF PRONOUNCEMENT: 25 10 201 8 O R D E R PER P ARTHA SARATHI CH AUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF LD. CIT(A) - 1, KANPUR DATED 18/8/2017 AS PER FOLLOWING GROUNDS OF APPEAL: - 1. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITIONS MAD E BY I.T.O. ON ACCOUNT OF EXPENSES DEBITED IN PROFIT AND LOSS ACCOUNT, WHICH WERE EXIGIBLE FOR THE SAKE OF CARRYING ON OF BUSINESS AND EFFICIENT MANAGEMENT THEREOF, UNDER THE FOLLOWING HEADS: - ITEMS AMOUNT (RS.) FREIGHT 100000 / - GENERAL EXPENSES 2 403 / - ITA NO.723 /LKW/2017 PAGE 2 OF 4 CONVEYANCE, TRAVELLING, TELEPHONE VEHICLE RUNNING & DEPRECIATION 48769 / - TOTAL 151 172 / - WITHOUT APPRECIATING AND CONSIDERING THE FACTS OF THE CASE. 2. BECAUSE DISALLOWANCES OF APPELLANT'S CLAIM FOR DEDUCTION OF EXPENSES, WAS BASED ON AN ERRONEOUS PREMISE AND DID NOT APPRECIATE/CONSIDER THE INDEPENDENTLY NEED OF EACH EXPENSE FOR THE PURPOSE OF BUSINESS. 3. BESIDE THIS THE AUTHORITIES BELOW, THEM SELF - ACCEPTED THE BOOK RESULT OF THE APPELLANT, THE QUESTION OF DISALLOWANCE OF EXPENSES DOE S NOT ARISE, AS AUDITED BOOKS OF ACCOUNTS AND AUDITOR'S REPORT HAS NOT BEEN REJECTED. 4. BECAUSE THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN UPHOLDING AD DITIONS RS. 42,390 / - ON ACCOUNT OF INTEREST CHARGED ON ADVANCES, WITHOUT ESTABLISHING NEXUS BET WEEN BORROWED FUND & OWN FUND, THOUGH, SUFFICIENT MATERIAL WAS PRODUCED. 5. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE . 2 . AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSEE APPRISED THE BENCH THAT THE ORDER OF THE LD. CIT(A) IS AN EX - PARTE ORDER. THERE WAS NO APPEARANCE AND REPRESENTATION OF THE CASE ON BEHALF OF THE ASSESSEE. LD. CIT(A) HAS DISPOSED OF THE APPEAL ON THE BASIS OF MATERIALS AVAILABLE ON RECORD AND IN HIS FINDING HE HAS MENTIONED THAT ASSESSEE HAS NOT BROUGHT ANY CREDIBLE EVIDENCE ON RECORD. LD. A.R. OF THE ASSESSEE SUBMITTED THAT SINCE THERE WAS NO APPEARANCE ON BEHALF OF THE ASSESSEE AND THE RIGHTS AND LIABILITIES OF THE ASSESSEE WERE NOT ADJUDICATED UPON, THEREFORE, IT IS NATURAL FA LLOUT OF THE CONSEQUENCES THAT ASSESSEE HAS NOT BROUGHT ANY CREDIBLE EVIDENCE ON RECORD BEFORE THE LD. CIT(A). LD. A.R. ITA NO.723 /LKW/2017 PAGE 3 OF 4 OF THE ASSESSEE PRAYED FOR FINAL OPPORTUNITY TO REPRESENT ASSESSEES CASE BEFORE THE FIRST APPELLATE AUTHORITY ON MERITS AND PRAYED FOR AN OPPORTUNITY. 3 . LD. D.R. HAS PLACED RELIANCE ON THE FINDINGS OF THE SUBORDINATE AUTHORITIES AND VEHEMENTLY OPPOSED FOR PROVIDING ANY FURTHER CHANCE TO DEFEND THE CASE OF THE ASSESSEE ON MERITS BEFORE THE LD. CIT(A). 4 . WE HAVE PERUSED THE CASE RECORD AND HEA RD THE RIVAL CONTENTIONS AND WE FIND THAT AS FACTS ON RECORD, THERE HAS BEEN NO REPRESENTATION FOR AND ON BEHALF OF THE ASSESSEE, THEREFORE, IT IS OBVIOUS THAT RIGHTS AND LIABILITIES OF THE ASSESSEE WERE NOT ADJUDICATED UPON ON MERITS BY THE LD. CIT(A). W ELFARE LEGISLATION, WHICH IS PART AND PARCEL OF THE TAXING STATUTE ALSO, ENSHRINES WITHIN ITS AMBIT PRINCIPLES OF NATURAL JUSTICE WHERE FREE AND FAIR TRIAL HAS TO BE PROVIDED. IN THIS CASE , THERE WAS NO PERSONAL APPEARANCE OR ANY REPRESENTATION ON BEHALF OF THE ASSESSEE. LD. CIT(A) HAS DISPOSED OF THE CASE ON THE BASIS OF MATERIALS ON RECORD AND HAS GIVEN A FINDING THAT ASSESSEE HAS NOT BROUGHT ANY CREDIBLE EVIDENCE ON RECORD IN SUPPORT OF ITS CASE. THEREFORE, IN THE INTEREST OF NATURAL JUSTICE, WE SET A SIDE THE ORDER OF LD. CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE TO ADJUDICATE THE MATTER ON MERITS AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 25 / 10 / 201 8 . SD/ - SD/ - [ N .S. SAINI ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST OCTO BER , 201 8 JJ: 2310 ITA NO.723 /LKW/2017 PAGE 4 OF 4 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR