B.P. CHEMICALS, MUMBAI V. ADDL CIT 13(2), MUMBAI

ITA 7524/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3267 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-01-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 03-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENC H, MUMBAI !' , $ % BEFORE SHRI I.P. BANSAL, JM AND SHRI KARUNAKARA RAO , AM ./I.T.A. NO.7524/M/2010 ( & ' (' / ASSESSMENT YEAR :2007-2008) B.P. CHEMICALS, 3, 1 ST FLOOR, VIHAL CHAMBERS, 65 KAZI SAYED ST, MUMBAI 400 003. & / VS. ADDL. CIT - 13(2), MUMBAI. ) $ ./PAN : AEXPP 2781 G ( )* /APPELLANT) .. ( +,)* / RESPONDENT) )* - . / APPELLANT BY : NONE +,)* - . / RESPONDENT BY : SHRI MOHIT JAIN & - /$ /DATE OF HEARING : 24.6.2013 01( - /$ /DATE OF PRONOUNCEMENT : 3.7.2013 2 2 2 2 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 3.11.2010 IS A GAINST THE ORDER OF CIT (A)- 24, MUMBAI DATED 11.8.2010 FOR THE ASSESSMENT YEAR 2007-2008. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE L D CIT ERRED IN CONFIRMING DISALLOWANCE OF RS. 21,62,805/- OUT OF INTEREST UND ER THE PROVISIONS OF SECTION 40A(2)(B) MERELY FOLLOWING EARLIER YEARS DECISION OF THE HO NBLE ITAT IN ASSESSEES OWN CASE AND DISREGARDING FACTUAL AND DI STINGUISHING SUBMISSION WHICH WAS IN THE LINE OF THE CBDT CIRCULAR NO. 6P (LXXVI- 66), DATED 6.7.1998 AND IN THE LINE OF THE JURISDICTIONAL HIGH COURTS JUDGMENT IN CASE OF CIT VS. INDO SAUDI SERVICES (TRAVEL) P. LTD [310 ITR 306]. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN THE INTEREST OF JUSTICE, LD CIT (A) OUGHT TO HAVE CONSIDERED THE RE LEVANT FRESH EVIDENCES IN SUPPORT OF THE INTEREST PAYMENTS TO THE RELATIVES. IT IS HUMBLY STATED THAT THEY WERE SUBMITTED PURELY WITH A VIEW TO SUBSTANTIATE THAT T HE CONDITION OF THE SAID CIRCULAR AND THE JUDGMENT, REFERRED ABOVE, WERE FULFILLED. 3. THE LD CIT (A) FAILED TO APPRECIATE THAT THE SUB MISSION WITH REFERENCE TO THE FRESH EVIDENCES WAS THE DISTINGUISHING ASPECT OF THE CASE AND THER EFORE, IT IS RESPECTFULLY STATED THAT, IT COULD NOT HAVE BEEN IG NORED BY THE LD CIT (A). 2 4. ON THE FACTS AND IN LAW YOUR APPELLANT PRAYS THA T THE ADDITION ON ACCOUNT OF THE ALLEGED DISALLOWANCE MAY BE DELETED. ALTERNATIVELY, IT IS PRAYED THAT THE ABOVE REFERRE D FRESH EVIDENCES [FILED BEFORE THE LD CIT (A)] MAY BE CONSIDERED AND ADJUST ED IN THE INTEREST OF JUSTICE. ALTERNATIVELY, AN OPPORTUNITY MAY BE GIVEN TO SUBSTANTIATE THE CLAIM BEFORE THE AO AND OBLIGE. 3. IN THIS APPEAL, ASSESSEE RAISED VARIOUS GROUNDS E SSENTIALLY AGGRIEVED WITH THE DECISION OF CONFIRMING THE DISALLOWANCE OF RS. 21,6 2,805/- U/S 40A(2)(B) OF THE ACT. IT IS ARGUED THAT IN ALL THE GROUNDS, CIT (A) HAS IGNORED THE FRESH EVIDENCES FILED BEFORE HIM AND MERELY FOLLOWED THE ORDER OF THE TRI BUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2004-2005. ALTERNATELY, THE ASSESSEE SEE KS AN OPPORTUNITY BEFORE THE CIT(A) FOR SUBSTANTIATING THE ASSESSEES CLAIM. 4. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, IT IS NOTICED THAT THERE IS NONE APPEARED TO REPRESENT THE ASSESSEE. 5. ON THE OTHER HAND, LD DR FAIRLY BROUGHT OUR ATTE NTION TO THE IMPUGNED ORDER OF THE CIT (A) AND MENTIONED THAT THE IMPUGNED ORDE R IS NOT A SPEAKING ORDER AND THERE IS NO WAY TO KNOW THE DETAILS OF THE FRESH EV IDENCES FILED BY THE ASSESSEE BEFORE THE CIT (A). IT IS ALSO MENTIONED THAT THER E WERE NO WHISPERS ABOUT THE FACT OF FILING OF THE FRESH EVIDENCES, AS THE IMPUGNED O RDER DOES NOT CONTAIN ANY DISCUSSION ON THIS ASPECT. OTHERWISE, LD DR RELIED ON THE ORDERS OF THE AO / CIT (A) DUTIFULLY. 6. WE HAVE HEARD THE LD DR AND PERUSED THE PAPERS F ILED BEFORE US. IT IS THE GRIEVANCE OF THE ASSESSEE THAT THE CIT (A) MERELY R ELIED ON THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2004-2005, IG NORING THE FRESH EVIDENCES FURNISHED BEFORE HIM. IN THIS REGARD, WE HAVE PERU SED THE IMPUGNED ORDER AND FIND PARA 2 AND 2.1 ARE RELEVANT HERE AND THE SAME ARE R EPRODUCED HERE UNDER FOR THE SAKE OF COMPLETENESS OF THE ORDER. 2. THE ONLY GROUND OF APPEAL RELATES TO DISALLOWANC E OF RS. 21,62,805/- ON ACCOUNT OF PAYMENT OF INTEREST IN EXCESS OF 12%. 2.1 IN THIS CASE IT IS SEEN THAT IN APPELLANTS OWN CASE THERE IS AN ORDER OF HONBLE ITAT FOR AY 2004-2005 IN WHICH THE HONBLE ITAT HAS QUOTED JUDGMENT OF 3 CIT (A) IN WHICH ACTION OF AO IN RESTRICTING THE IN TEREST ALLOWABLE @ 12% AS AGAINST 18% TAKEN BY THE ASSESSEE WAS UPHELD (AOS ORDER PA RA 4 PAGE 3). SINCE, IN THE PRESENT YEAR IN APPEAL THE ISSUE REMAINS THE SAME A ND FACTS ARE IDENTICAL RESPECTFULLY FOLLOWING HONBLE ITATS ORDER FOR AY 2004-2005 IN APPELLANTS OWN CASE THE DISALLOWANCE SO MADE BY THE AO IS CONFIRMED AND APP EAL IS DISMISSED. 7. FROM THE ABOVE, IT IS EVIDENT THAT THERE IS NO W HISPER ABOUT THE FRESH EVIDENCES. IT IS NOT KNOWN IF THE ASSESSEE FILED A NY SUCH EVIDENCES. IT IS EXPECTED THAT CIT (A) SHOULD HAVE DISCUSSED THE DETAILS OF T HE SAID EVIDENCES AND DISTINGUISHED THEM BEFORE RESORTING TO RELY ON THE ORDER OF THE TRIBUNAL FOR THE AY 2004-2005. IN FACT, RELEVANT PORTIONS OF THE SAID ORDER OF THE TRIBUNAL WERE ALSO NOT REFERRED TO IN THIS ORDER. CIT(A) HAS NOT EVEN BOTH ERED TO IMPORT RELEVANT PARAGRAPHS FROM THE SAID ORDER OF THE TRIBUNAL IN S UPPORT, WHEN HE RELIED HEAVILY ON THAT ORDER FOR GRANTING RELIEF TO THE ASSESSEE ON A PARTICULAR ADDITION BY THE AO. WE CANNOT APPRECIATE SUCH AN ORDER OF THE CIT(A), WHEN SUCH ORDER IS APPEALABLE IN NATURE. IN OUR OPINION, THE SAID ORDER OF THE CIT ( A) CANNOT BE CONSIDERED AS A SPEAKING ORDER WITHIN THE MEANING OF PROVISIONS OF SUB-SECTION (6) OF SECTION 250 OF THE ACT. IT IS A STRAIT LAW THAT THE APPEALABLE OR DER SHOULD BE SPEAKING ORDERS AS IT INVOLVES RIGHTS OF THE TAX PAYERS. AS PER THE PROVI SIONS OF SUB-SECTION (6) OF SECTION 250, THE CIT (A) IS UNDER LEGAL OBLIGATION TO PASS AN ORDER IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASONS FOR THE DECISION . THEREFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE C IT (A) WITH A DIRECTION TO MAKE AN ORDER AS PER LAW AFTER GRANTING A REASONABLE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS AN ALTERNATE PRAYER OF THE ASSESSEE FOR GRANT OF AN OPPORTUNITY BEFORE THE CIT(A). ACCORDINGLY, GROUNDS RAISED BY THE ASSE SSEE ARE SET ASIDE . 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3.7.2013. SD/- SD/- ( I.P. BANSAL) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 3& DATED: 3.7.2013 . & . ./ OKK , SR. PS 4 2 2 2 2 - -- - +/45 +/45 +/45 +/45 65(/ 65(/ 65(/ 65(/ / COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 5 89 +/& , , / DR, ITAT, MUMBAI 6. 9!' : / GUARD FILE. ,5/ +/ //TRUE COPY// 2& 2& 2& 2& / BY ORDER, ; ;; ; / < < < < = = = = (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI