M/S. DEESAN AGRO TECH PRIVATE LIMITED , MUMBAI V. D.C.I.T. -12(2)(1), MUMBAI

ITA 7253/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8177 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 21-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: HARDIK NIRMAL ARS
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

P A G E | 1 ITA NO. 7253/MUM/2017 A.Y. 2014 - 15 DEESAN AGRO TECH PVT. LTD. VS. DCIT - 12(2)(1) IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 7253/MUM/2017 (ASSESSMENT YEAR: 2014 - 15 ) DEESAN AGRO TECH PVT. LTD. OFFICE NO. 8C, MEZZANINE FLOOR, PLOT NO.87C, ANNA BHAVAN, DEVJI RATANSHI MARG, MASJID (E), MUMBAI 400 009 VS. DCIT - 12(2)(1) AAYAKAR BHAVAN MUMBAI PAN AAACD1662N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI YOGESH THA R & SHRI HARDIK NIRMAL, A .R S RESPONDENT BY: SHRI H.N. SINGH , D.R DATE OF HEARING: 26.06.2019 DATE OF PRONOUNCEMENT: 1 2 . 0 7 .2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 20, MUMBAI, DATED 27.10.2017, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 30.12.2016 . THE ASSESSEE HAS ASSAILED THE ORDER PASSED BY THE CIT(A) ON THE FOLLOWING GROUNDS OF APPEAL: 1. THE HON'BLE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 1,54,70,462/ - BEING 75% OF THE COMMISSION PAID BY THE APPELLANT WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD. 2. THE HON BLE CIT(A) FURTHER ERRED IN MAKING INCORRECT OBSERVATION AND IN PARTICULAR THE FOLLOWING: P A G E | 2 ITA NO. 7253/MUM/2017 A.Y. 2014 - 15 DEESAN AGRO TECH PVT. LTD. VS. DCIT - 12(2)(1) NOBODY HAS ATTENDED ON THE DATES FIXED FOR HEARING. IT APPEARS THAT THE APPELLANT IS NOT INTERESTED IN PROSECUTING THE APPEAL. HENCE, THE APPEAL IS DECIDED ON THE BASIS OF THE FACTS AVAILABLE ON RECORD. 3. THE HON'BLE CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAD FILED LETTERS ON: I) 18/09/2017, II) EMAIL SENT ON 08/10/17 TOGETHER WITH THE LETTER FILED ON 10/10/17 AND III) EMAIL SENT ON 25/10/17 SEEKING ADJOURNMENT IN RESPECT OF HEARINGS ON 18/09/17, 09/10/17 AND 27/10/17. HENCE, THE QUESTION OF NOT BEING INTERESTED IN PURSUING THE HEARING DOES NOT ARISE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE DISALLOWANCE OF RS. 1,54,70,462/ - BEING 75% OF THE COMMISSION IS UNWARRANTED AND UNJUSTIFIED. 5. THE APPELLANT PRAY S THAT, THE DISALLOWANCE OF RS. 1,54,70,462/ - , BEING 75% OF THE COMMISSION BE DELETED. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING BY SOLVENT EXTRACTION PROCESS AND WIND POWER GENERATION HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2014 - 15 ON 30.11.2014, DECLARING ITS TOTAL INCOME AT RS. 3,71,80,700 / - . SUBSEQUENTLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC.143(2). 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.2,06,27,283/ - ON ACCOUNT OF COMMISSION AND BROKERAGE EXPENSES. AS THE ASSESSEE COULD NOT SPECIFICALLY JUSTIFY THE ALLOWABILITY OF THE COMMISSION EXPENSES ON THE BASIS OF SUPPORTING DOCUMENTARY EVIDENCE, THEREFORE, THE A.O DISALLOWED 75% OF THE SAID EXPENDITURE AMOUNTING TO RS.1,54,70,462/ - (I.E 75% OF RS.2,06,27,283/ - ). THE A.O AFTER MAKING THE AFORESAID DISALLOWANCE OF COMMISSION EXPEND ITURE ASSESSED THE INCOME AT RS.5,26,51,160/ - . 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IT WAS OBSERVED BY THE CIT(A) THAT THE ASSESSEE DESPITE HAVING BEEN PUT TO NOTICE ABOUT THE HEARING OF THE APPEAL HAD FAILED TO APPEAR BEFORE HIM ON VARIOUS OCCASIONS. ACCORDINGLY, THE CIT(A) OBSERVING THAT AS THE ASSESSEE HAD FAILED TO PLACE ON RECORD ANY SUBMISSION TO DISLODGE THE DISALLOWANCE OF COMMISSION EXPENSES OF RS.1,54,70,462/ - , P A G E | 3 ITA NO. 7253/MUM/2017 A.Y. 2014 - 15 DEESAN AGRO TECH PVT. LTD. VS. DCIT - 12(2)(1) UPHELD THE SAME. ON THE BASIS OF THE AFORESAID OB SERVATIONS THE APPEAL FILED BY THE ASSESSEE WAS DISMISSED. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A .R) FOR THE ASSESSEE SUBMITTED, THAT THE APP EAL HAD BEEN DISMISSED BY THE CIT(A) ON THE BASIS OF AN EX - PARTE ORDER. IT WAS SUBMITTED BY THE LD. A.R THAT THE CIT(A) HAD ERRONEOUSLY OBSERVED THAT THE ASSESSEE HAD NEITHER APPEARED NOR SOUGHT ANY ADJOURNMENT IN THE COURSE OF THE APPELLATE PROCEEDINGS BE FORE HIM. IT WAS SUBMITTED BY THE LD. A.R , THAT ON THE VARIOUS DATES ON WHICH THE APPEAL WAS FIXED FOR HEARING BEFORE THE CIT(A), THE ASSESSEE HAD SOUGHT ADJOURNMENTS. IN ORDER TO FORTIFY HIS AFORESAID CONTENTION THE LD. A.R DREW OUR ATTEN TION TO THE ORDER OF THE CIT(A), WHEREIN THE FACT THAT THE ASSESSEE HAD SOUGHT ADJOURNMENTS ON VARIOUS DATES WAS MENTIONED. ACCORDINGLY, IT WAS SUBMITTED BY THE LD. A.R THAT THE CIT(A) WAS IN ERROR IN OBSERVING THAT THE ASSESSEE HAD NEITHER ATTENDED THE PR OCEEDINGS NOR SOUGHT ANY ADJOURNMENT . IT WAS AVERRED BY THE LD. A.R , THAT THE CIT(A) ON THE BASIS OF MISCONCEIVED FACTUAL POSITION HAD DISMI SSED THE APPEAL BY WAY OF A NON - SPEAKING ORDER. IT WAS SUBMITTED BY THE LD. A.R THAT IN ALL FAIRNESS THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT(A) WITH A DIRECTION TO RE - ADJUDICATE THE SAME AFTER ALLOWING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER OF THE CIT(A). 7. WE HA VE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. AS IS DISCERNIBLE FROM THE ORDER OF THE CIT(A), IT WAS OBSERVED BY HIM THAT THE ASSESSEE HAD NEITHER ATTENDED THE PROCEEDINGS BEFORE HIM NOR SOUGHT ANY ADJOURNMENT . HOWEVER, WE FIND P A G E | 4 ITA NO. 7253/MUM/2017 A.Y. 2014 - 15 DEESAN AGRO TECH PVT. LTD. VS. DCIT - 12(2)(1) THAT THE AFORESAID OBSERVATION OF THE CIT(A) IS CLEARLY IN CONTRADICTION OF HIS OBSERVATIONS RECORDED AT PAGE 2 PARA 3.2 OF HIS ORDER, WHICH READ S AS UNDER: SR. NO. DATE OF HEARING WHETHER NOTICE WAS SERVED REMARKS WHETHER APPELLANT/AR APPEARED 1. 18.09.2017 YES NONE ATTENDED. ADJOURNMENT IS SOUGHT AND IT IS REQUESTED THAT THE HEA RING MAY BE FIXED AFTER 3 WEEKS 2. 09.10.2017 YES NONE ATTENDED. ADJOURNMENT WAS SOUGH T 3. 27.10.2017 YES NONE ATTENDED. ADJOURNMENT IS SOUGHT ON A PERUSAL OF THE AFORESAID OBSERVATIONS OF THE CIT(A), WE FIND THAT THE ASSESSEE ON AL L THE THREE OCCASIONS VIZ. 18.09 .2017, 09.10.2017 AND 27.10.2017 HAD SOUGHT ADJOURNMENTS ON THE SAID RESPECTIVE DATES . ACCORDINGLY, THE OBSERVATION OF THE CIT(A) THAT THE ASSESSEE HAD NEITHER ATTENDED THE PROCEEDINGS NOR SOUGHT AN ADJOURNMENT ARE FOUND TO BE INCORRECT. APART THERE FROM, WE FIND THAT THE CIT(A) HAD DISPOSED OFF THE APPEAL BY MERELY REFERRI NG TO THE OBS ERVATIONS OF THE A.O AND UPHOLDING THE SAME. IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER REQUIRES TO BE REVISITED BY THE CIT(A). ACCORDINGLY, WE RESTORE THE MATTER TO THE FILE OF THE CIT(A) FOR FRESH A DJUDICATION ON MERITS. NEEDLESS TO SAY, THE CIT(A) WHILE DISPOSING OFF THE APPEAL SHALL AFFORD AN OPPORTUNITY OF BEING HEARD TO THE ASSESSE E . 8. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED IN THE OPEN COURT ON 1 2 .07.2019 S D / - S D / - ( SHAMIM YAHYA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 12 .07 .2019 PS. ROHIT P A G E | 5 ITA NO. 7253/MUM/2017 A.Y. 2014 - 15 DEESAN AGRO TECH PVT. LTD. VS. DCIT - 12(2)(1) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI