ITO WD 3(4), THANE V. THE RUBBER PRODUCTS LTD, THANE

ITA 744/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9742 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 12-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI R AJENDRA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 744 /MUM/2016 ( / ASSESSMENT YEAR: 2011 - 12 ) ITO WD - 3(4 ) 6 TH FLOOR, ASHAR IT PARK RD NO. 16Z WAGLE INDL. ESTATE, THANE (W), PIN - / VS. THE RUBBER PRODUCTS LTD. PLOT NO. C - 44, RD NO. 28 WAGLE INDL. ESTATE, THANE(W), PIN - 400604 . ./ ./ PAN NO. AAACT5142P ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAJESH KUMAR YADAV , DR / RESPONDENTBY : NONE / DATE OF HEARING : 21 .02 .1 8 / DATE OF PRONOUNCEMENT : 21 .03.18 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 34, MUMBAI DATED 05.02.2016 F OR AY 20 12 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 744 /MUM/201 6 THE RUBBER PRODUCTS LTD. 1 . ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE IN LAW. THE LD. CIT(A) HAS ERRED IN D ELETING THE ADDITIONS ON ACCOUNT OF UNSUBSTANTIATED UNSECURED LOAN, SUNDRY CREDITORS AND UN - DISCLOSED INTEREST ON LOANS AND ADVANCES WITHOUT ANY CONCLUSIVE EVIDENCE PROVIDED BY THE ASSESSEE EITHER IN ASSESSMENT OR APPELLATE PROCEEDINGS. 2 . THE ORDER OF THE LD, CIT(APPEALS) MAY BE VACATED AND TH AT OF THE AO MAY BE RESTORED. 3 . THE APPELLANT CRAVES LEAVE TO ADD, ALTER , AMEND OR DELETE ANY OF GROUND OF APPEAL. 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE /RESPONDENT IN SPITE OF SEVERAL CALLS AND EVEN NO APPLICATI ON FOR ADJOURNMENT WAS MOVED. ON THE OTHER HAND, LD. DR PRESENT IN THE COURT IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3 . THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGE D IN THE MANUFACTURE OF RUBBERS. DURING THE 3 I.T.A. NO. 744 /MUM/201 6 THE RUBBER PRODUCTS LTD. YEAR, THE ASSESSEE COMPANY HAS SHOWN TURNOVER OF RS. 19.27 CRORES AND PURCHASES AT RS. 9.82 CRORES. HOWEVER THE PROFIT FROM THE BUSINESS HAS BEEN SH OWN AT NIL. THE RETURN OF INCOME WAS FILED DECLARIN G TOTAL INCOME AT NIL. LATER ON , THE CASE WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICES AND SEEKING REPLY OF THE ASSESSEE, ORDER OF ASSESSMENT U/S 143(3) WAS COMPLETED BY THE AO THEREBY MAK ING ADDITIONS ON ACCOUNT OF UNSECURED LOANS, SUNDRY CREDITORS AND OTHERS. A GGRIE VED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE REVENUE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1. 4 . THIS GROUND RAISED BY THE REVENUE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN DELETING THE ADDITIONS ON ACCOUNT OF UNSUBSTANTIATED UNSECURED L OAN, SUNDRY CREDITORS AND UN - DISCLOSED INTEREST ON LOANS AND ADVANCES WITHOUT ANY CONCLUSIVE 4 I.T.A. NO. 744 /MUM/201 6 THE RUBBER PRODUCTS LTD. EVIDENCE PROVIDED BY THE ASSESSEE EITHER IN ASSESSMENT OR APPELLATE PROCEEDINGS. 5 . WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT LD. CIT(A) HAS CATEGORICALLY H ELD IN HIS ORDER THAT THE AO HAD NOT CONSIDERED ALL THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE DOCUMENTS PL ACED ON RECORD BY THE ASSESSEE AND NO NOTICES U/S 131 OR 136 OF THE I.T. ACT WERE ISSUED BY THE AO. LD. CIT(A) HAS FURTHER MENTIONED IN HIS ORDER THAT ASSESSEE HAD FILED SEVERAL DOCUMENTS INCLUDING CONFIRMATION FOR LOAN VIDE LETTER DATED 06 .03.14, BUT THE SAME WAS NOT GOT VERIFIED BY THE AO FROM THE ALLEGED CREDITORS. LD. CIT(A) HAS ALSO CATEGORICALLY MENTIONED THAT THE AO HAS IGNORED THE AUDIT ACCOUNTS AND IN HASTE UNDER WRONG PRESUMPTION OF LAW A ND FACTS HAD MADE THE ADDITIONS WITHOUT PROV IDING THE OPPORTUNITY OF HEARING TO THE ASSESSEE. LD. CIT(A) HAS FURTHER MENTIONED IN HIS ORDER THAT THE AO HAD SOUGHT CONFIRMATION FROM 174 CREDITORS AND THERE WAS JUST ONE DAY FOR FURNISHING CONFIRMATION OF CREDITORS AND IT WAS VERY LESS TIME AND PRACTIC ALLY 5 I.T.A. NO. 744 /MUM/201 6 THE RUBBER PRODUCTS LTD. NOT POSSIBLE FOR THE ASSESS E E TO FILE THE CONFIRMATION OF 174 CREDITORS ALONG WIT H THEIR BALANCE SHEET, LEDGER EXTRACTS, BANK STATEMENTS AND RETURNS OF INCOME. THEREFORE, ON THIS BASIS, ADDITIONS MADE BY AO WERE DELETED BY LD. CIT(A) . LD. DR STRONGLY SUBMITTED BEFORE US THAT THE POWERS OF LD. CIT(A) AND THE AO ARE CO - TERMINUS AND THEREFORE IN CASE, THE LD. CIT() HAD COME TO THE CONCLUSION THAT THE AO HAD NOT VERIFIED THE REQUIRED DOCUMENTS SUBMITTED BY THE ASSESSEE, THEN IN THAT EVENTUALITY, LD. CIT(A ) HAD ALL THE POWERS TO ISSUE SUMMONS U/S 131 OR NOTICES U/S 133(6) OF THE I.T. ACT TO THE CONCERNED PERSONS AND BY NOT DOING SO, LD CIT(A) HAS COMMITTED A GRAVE ILLEGALITY AND HAS THUS WRONGLY DELETED THE ADDITIONS WITHOUT VERIFYING THE FACTUAL POSITION. IN ORDER TO SUPPORT ITS CONTENTIONS, LD. DR RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA VRS. CIT (1981 AIR 241). BE THAT AS IT MAY, AFTER CONSIDERING THE FACTS OF THE PRESENT CASE AND AFTER C ONSIDERING THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO PASS AFRESH ORDER AFTER CONSIDERING AND VERIFYING ALL THE MATERIAL PLACED ON RECORD. IT IS NEEDLESS HERE TO 6 I.T.A. NO. 744 /MUM/201 6 THE RUBBER PRODUCTS LTD. MENTION THA T BEFORE PASSING THE ORDER OF ASSESSMENT, THE AO SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSE. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE THE MATTER BACK TO THE FILE OF AO SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHICH SHALL BE ADJUDICATED BY THE AO INDEPENDENTLY IN ACCORDANCE WITH LAW. WITH THESE DIRECTIONS, THIS GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 2 & 3 6 . THESE GROU NDS ARE GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 7 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH , 2018 SD/ - SD/ - ( RAJENDRA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 21 . 03 .201 8 SR.PS . DHANANJAY 7 I.T.A. NO. 744 /MUM/201 6 THE RUBBER PRODUCTS LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI