DCIT CIR 6(2)(1), MUMBAI V. DAHEJ INFRASTRUCTURE P. LTD, MUMBAI

ITA 7616/MUM/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2272 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 29-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 142(1); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 7616 /MUM/201 6 ( / ASSESSMENT YEAR: 20 1 2 - 13 ) DCIT CIR 6(2)(1) R. NO. 563, AAYAKAR BHAVAN, M . K. ROAD, CHURCHGATE, MUMBAI - 400020 . / VS. M/S. DAHEJ INFRASTRUCTURE PVT. LTD. B/9 TRADE WORLD KAMALA MILLS COMPOUND LOWER PAREL, MUMBAI - 400013. ./ ./ PAN/GIR NO. : AACCD3143N ( / APPELLANT ) .. ( / RESPON DENT ) / DATE OF HEARING : 09 / 0 5/ 201 9 / DATE OF PRONOUNCEMENT : 24 /0 6 / 201 9 / O R D E R PER AMARJIT SINGH , J M: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 19 . 1 0 .201 6 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 12 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 1 2 - 1 3 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - ' 1. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO OF REVENUE BY : SHRI S. K. MITRA ASSESSEE BY: SHRI MITESH SHAH ITA NO. 7616 /M/201 6 A.Y.2012 - 13 2 RS.1,24,18,443/ - ON ACCOUNT OF PORT RECOVERY AND WHARFAGE CHARGES. 2. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE COMPANY FAILED TO PROVE THAT IT HAD ACTUALLY CARRIED OUT ANY BUSINESS ACTIVITY DURING A.Y. 2012 - 13 AND THE PORT RECOVERY AND WHARFAGE CHARGES CLAIMED WERE ACTUALLY INCURRED WH OLLY AND EXCLUSIVELY FOR PURPOSE OF BUSINESS AND ALLOWABLE IN NATURE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. ' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 17 . 09 .201 2 DECLARING TOTAL LOSS TO THE TUNE OF RS.2,01,86,638/ - . T HE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. THE C ASE WAS SELECTED FOR SCRUTINY UNDER CASS. THEREAFTER, NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF INFRASTRUCTURE FACILITIES. THE ASSESSEE CLAIM ED THE PORT RECOVERY CHAR GES IN SUM OF RS.1,24,18,443/ - A S EXPENSES. SINCE THERE WAS NO BUSINESS, THEREFORE, THE AO DISALLO WED THE SAME AND ADDED TO THE INCOME OF THE ASSESSEE. THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THIS FACT THAT THERE WAS TEMPORARY LULL IN THE BUSINESS AND GOING OUT OF BUSINESS WAS SOLD COMPUTED, THEREFORE, THE CLAIM OF THE ASSES SEE WAS ALLOWABLE. THE REVENUE WAS NOT SATISFIED, THEREFORE, FILED THE PRESENT APPEAL BEFORE US. I SSUE NOS. 1 TO 3 : - 4. ALL THE ISSUES ARE IN CONNECTION WITH THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE IN SUM OF RS.1,24,18,443/ - PORT RECOVERY AND WHARFAGE C HARGES. THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS ARGUED THAT THE ITA NO. 7616 /M/201 6 A.Y.2012 - 13 3 ASSESSEE FAILED TO PROVE THIS FACT THAT THE ASSESSEE WAS ACTUALLY CARRYING THE BUSINESS IN THE A.Y. 2012 - 13 AND PORT R ECOVERY AND WHARFAGE CHARGES WERE BELONGING TO ITS BUSINESS AND ALLOW ABLE IN NATURE ,THEREFORE, THE FINDING OF THE CIT(A) IS WRONG AGAINST LAW AND FACTS, THEREFORE, IS LIABLE TO BE SET ASIDE . HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS RELIED UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. ON AP PRAISAL OF THE ABOVE SAID FINDING OF THE CIT(A), WE FIND THAT THE CIT(A) HAS NOWHERE DISCUSSED THE COGENT AND CONVINCING IN CONNECTION WITH THE TEMPORARY LULL IN THE BUSINESS . IT IS TO BE SEEN WHETHER THE ASSESSEE WAS ACTUALLY DOING THE BUSINESS IN THE R ELEVANT YEAR OR NOT. IT CAN BE ASSESSED IN VIEW OF THE EVIDENCE IF ANY ADDUCIBLE BEFORE THE AO ON RECORD. MOREOVER, IT IS ALSO REQUIRED TO BE CONFIRMED THAT THE PORT RECOVERY AND WHAR FAGE CHARGES IN SUM OF RS.1,24,18,443/ - IS RIGHTLY CONNECTED TO THE BUSIN ESS OF THE ASSESSEE. IT IS ALSO REQUIRED TO BE SEEN WHETHER THE SAID CLAIM WAS RAISED BY ASSESSEE IN THE EARLIER YEAR ALSO OR NOT AND WHAT WAS THE PICTURE IN THE SUBSEQUENT YEAR ALSO. I T IS NOT IN DISPUTE THAT IF THERE IS TEMPORARY LULL IN THE BUSINESS T HEN THE CLAIM OF THE ASSESSEE IS ALLOWABLE BUT THE CLAIM IS CERTAINLY REQUIRED TO BE EXAMINED WHETHER THE SAME IS CONNECTED TO THE BUSINESS OR NOT. SINCE, THE EVIDENCE HAS NOT BEEN DISCUSSED IN THE FINDING OF THE CIT(A), THEREFORE, WE ARE OF THE VIEW THAT THE MATTER OF CONTROVERSY IS LIABLE TO BE EXAMINED AT THE END OF THE AO TO VERIFY THE CLAIM OF THE ASSESSEE, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND RESTORED THE ISSUE BEFORE THE A O TO EXAMINE THE ISSUE AFRESH B Y GIVING AN OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. ITA NO. 7616 /M/201 6 A.Y.2012 - 13 4 5 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE ALLOWED ACCORDINGLY . ORDER PRONOUNCED IN THE OPEN COURT ON 24 /06/ 2019 . SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 24 /06 /2019 V IJAY / 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. / BY ORDER, //TRUE COPY// / / (DY./ASSISTT REG ISTRAR) , / ITAT, MUMBAI