HARI EXPORTS LTD, MUMBAI V. ADDL CIT RG 4(2), MUMBAI

ITA 7550/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79306 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 02-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 21-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PITAMBER DAS
• Keywords: Principle of natural justice
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.7550/MUM/2012, A.Y. 2006-07. M/S. HARIT EXPORTS LTD., 3G, KAKAD HOUSE, 3 RD FLOOR, NEW MARINE LINES, MUMBAI 400020 PAN: AAACH 2826C (APPELLANT ) VS. THE ADDL.C.I.T ,RANGE 4(2), AAYKAR BHAVAN, MK ROAD, MUMBAI (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI PI TAMBER DAS DATE OF HEARING : 02/07/20 14 DATE OF PRONOUNCEMENT : 02/07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST EX-PARTE ORDER PASSED BY LD. CIT(A)-11, MUMBAI DATED 23/02/2 011 FOR ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE CIT(A) HAS, IN VIEW OF THE FACTS & CIRCUMSTA NCES OF THE CASE AND IN LAW, GROSSLY ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER PASSED BY THE AO UNDER SECTION 143(3). THE ASSESSMENT ORDER PASSED IS ILLE GAL, BAD IN LAW AND WITHOUT JURISDICTION AND IS LIABLE TO BE QUASHED 2. THAT THE ADDITIONS AND DISALLOWANCES MADE ARE UN JUST, UNLAWFUL AND ARE ALSO HIGHLY EXCESSIVE AND ARE BASED ON MERE SURMISES AND CONJECTURES. THE ADDITION AND DISALLOWANCES CANNOT BE JUSTIFIED BY ANY MATERIAL O N RECORD. 3. THE INFORMATION FILED AND AVAILABLE ON RECORD HA S NOT BEEN PROPERLY CONSIDERED AND JUDICIALLY INTERPRETED. THE ADDITIONS MADE BY A SSESSING OFFICER AND UPHELD BY THE CIT (A) ARE UNJUST, ILLEGAL, ARBITRARY AND ARE AGAINST THE FACTS OF THE CASE AND ARE NOT JUSTIFIED BY ANY MATERIAL ON RECORD AND THE INC OME HAS BEEN WRONGLY AND ITA NO.7550/MUM/2012, A.Y. 2006-07 . 2 ILLEGALLY COMPUTED AT RS 10,33,83,730/- AS AGAINST THE RETURNED INCOME OF RS. 8,28,27,450/-. 4. THAT THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN TREATING INCOME FROM SHARES HELD AS INVESTMENT AS INCOME FROM BUSINESS I NSTEAD OF CAPITAL GAIN AMOUNTING TO RS. 2,03,94,396/- WITHOUT APPRECIATING THE FACT THAT THE INCOME IS EARNED FROM INVESTMENT IN SHARES AND NOT FROM TRADI NG IN SHARES AND THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE SAME. 5. THAT THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKING A DISALLOWANCE UNDER SECTION 40(A)(IA) OF RS. 1,36,85 2/- IN RESPECT OF PAYMENT OF TRANSACTION CHARGES TO STOCK EXCHANGES AND THE CIT( A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE SAID ADDITION. 6. THE LEARNED ASSESSING OFFICER HAS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW HAS ERRED IN DISALLOWING A SUM OF R S. 122,64,304/- UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 AND THE CIT (A) HAS ALSO ERRED ON FACTS AND IN LAW IN UPHOLDING THE SAID ADDITION. 7. THE LEARNED ASSESSING OFFICER HAS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN DISALLOWING / ADDING A SUM OF RS. 79,78,082/- BEING AMOUNT PAID FOR KEYMAN INSURANCE POLICY AND THE CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE SAID ADDITION / DISALLOWANCE. 8. THE LEARNED ASSESSING OFFICER HAS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN DISALLOWING 1 ADDING A SUM OF RS. 1,82,041/- UNDER SECTION 94(7) OF THE INCOME TAX ACT, 1961 AND THE C IT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE SAID DISALLOWANCE! ADDITION. 2. WHEN THE APPEAL WAS CALLED FOR HEARING NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. IT WAS OBSERVED THAT LD. CIT(A) HAS DISP OSED OF THE APPEAL FILED BY THE ASSESSEE BY DISMISSING IT IN-LIMINE WITHOUT GOING INTO THE ISSUES RAISED BEFORE HIM ON THE GROUND THAT THE ASSESSEE DID NOT HAVE A NY INTEREST IN THE FINALIZATION OF ITS APPEAL DESPITE SEVERAL OPPORTUNITIES PROVID ED TO THE ASSESSEE. AFTER NARRATING THE VARIOUS DATES ON WHICH THE APPEAL WAS FIXED FOR HEARING AND WAS ADJOURNED ON THE REQUEST OF THE ASSESSEE AND ALSO N ON-COMPLIANCE BY THE ASSESSEE, LD. CIT(A) HAS DISMISSED THE APPEAL WITH THE FOLLOWING OBSERVATIONS: THEREFORE, IN THE LIGHT OF THE DECISION IN THE CAS E OF CIT VS. MULTIPLAN INDIA (P) LTD., 38 ITD 320 OF HONBLE ITAT AND ALSO THE JUDGEMENT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF ESTATE OF LATE TUKOJI RAO HOLKAR, 223 ITR 180, THE APPEAL IS DISMISSED. ITA NO.7550/MUM/2012, A.Y. 2006-07 . 3 3. SECTION 250(6) PROVIDES THAT APPELLATE ORDERS OF CIT(A) ARE TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE A UTHORITY THEREON AND THE REASONS FOR SUCH DECISION. IT CLEARLY EMBODIES THE PRINCIP LE OF NATURAL JUSTICE AND THE PROVISION IS CLEARLY MANDATORY IN NATURE. CIT(A) A LSO DOES NOT HAVE POWER TO DISMISS THE APPEAL IN-LIMINE ON THE BASIS OF DECISI ON IN THE CASE OF CIT VS. MULTIPLAN INDIA (P) LTD. 38 ITD 320 AND MADHYA PRA DESH HIGH COURT IN THE CASE OF LATE TUKOJI RAO HOLKAR VS. CIT, 223 ITR 480, AS IT HAS BEEN HELD IN THE CASE OF GUJARAT THEMIS BIOSYN LTD. V. JOINT COMMISSIONER OF INCOME-TAX, 74 ITD 339 (AHM). THE FOLLOWING OBSERVATIONS CAN BE REFERRED. 3. WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIR CUMSTANCES OF THE CASE AS WELL AS SUBMISSIONS MADE BEFORE US. THE IMPUGNED ORDER PASS ED BY THE CIT(A) IS CLEARLY VIOLATIVE OF THE EXPRESS PROVISIONS OF SECTION 250( 6), WHICH PROVIDES THAT THE APPELLATE ORDERS OF THE CIT(A) ARE TO STATE THE POI NTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORITY THEREON AND THE REASONS F OR SUCH DECISION. THE UNDERLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE APPELLATE TRIBUNAL. SPEAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KNOW PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENC E OF THE FORMULATION OF THE POINT FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDO UBTEDLY PUTS A PARTY IN QUANDARY. SECTION 250(6) EXPRESSLY EMBODIES THE PRINCIPLES OF NATURAL JUSTICE AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPUG NED ORDER PASSED BY THE COMMISSIONER (APPEALS) IN VIOLATION OF THE PROVISIO NS OF SECTION 250(6) CANNOT, THEREFORE, BE SUSTAINED. REGARDING THE DECISIONS OF THE DELHI BENCH OF THE TRIBUNAL IN MULTIPLAN INDIA (P.) LTD.'S CASE (SUPRA) CITED B Y THE LD. CIT(A), WE FIND THAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE. SECTION 254 RE FERRING TO THE ORDERS OF THE TRIBUNAL CONFERS PLENARY JURISDICTION ON THE TRIBUNAL IN THE MATTER OF PASSING ORDERS UNDER SECTION 254(1). THERE IS NO SUCH EXPRESS STIPULATIO N IN SECTION 254 AS CONTAINED UNDER THE PROVISIONS OF SECTION 250(6) RELATING TO THE ORDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, RELIANCE PLACED BY THE CIT(A) ON MULTIPLAN INDIA (P.) LTD.'S CASE (SUPRA) IS ENTIRELY MISPLACED. SIMILARLY, THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR (SUPRA) CITED BY THE LD. CIT(A) IS DISTINGUISHABLE AND DOES NOT SUPPORT THE VIEW TAKEN BY THE CIT(A). 4. FOR THE REASONS INDICATED ABOVE, WE HEREBY SET A SIDE THE IMPUGNED ORDER OF THE CIT(A) AND DIRECT THE CIT(A) TO DISPOSE OF THE APPE AL OF THE ASSESSEE AFRESH AFTER ALLOWING PROPER OPPORTUNITY IN ACCORDANCE WITH LAW . 4. IN THIS VIEW OF THE SITUATION, AFTER HEARING LD . DR, WE RESTORE THIS APPEAL TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO RE-AD JUDICATE THE APPEAL FILED BY THE ASSESSEE AS PER PROVISIONS OF LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. WE DIRECT ACCORDINGLY. ITA NO.7550/MUM/2012, A.Y. 2006-07 . 4 5. IN THE RESULT, THE APPEAL IS CONSIDERED TO BE A LLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 02/07/2 014 ! ' #$ % &'( 02/07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 02/07/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS