DCIT 8(3), MUMBAI V. SUPERLINE TRADING CO. P.LTD, MUMBAI

ITA 7673/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8501 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 09-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: ADITYA B NEMANI
• Section: 142(1); 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI N.K. BILLAIYA (A.M.) ITA NO. 7673/MUM /2010 ASSESSMENT YEAR : 2006-07 DY. COMMISSIONER OF INCOME TAX -8(3), R. NO. 217, AAYAKAR BHAVAN, M.K. MARG, , MUMBAI 400 020. VS. SUPERLINE TRADING CO. PRIVATE LTD., 612, GOLDEN CHAMBERS, ANDHERI LINK ROAD, ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI - 400 053. PAN AAICS7632M (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI C.G.K. NAIR ASSESSEE BY : SHRI ADITYA B. NEMANI DATE OF HEARING 24-9-2012 DATE OF PRONOUNCEMENT 3-10-2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER DTD. 7-9-2010 PASSED BY THE LD. CIT(A) 18, MUMBAI FOR THE A.Y. 2006- 07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SHARE TRADING. IT FILED THE RETURN DECLARING TOTAL INCOME OF RS. 37,29,640/-. THE A.O. AFTER PR OCESSING OF THE RETURN U/S 143(1) OF THE INCOME TAX ACT, 1961 (THE ACT) IS SUED STATUTORY NOTICES ITA NO. 7673/MUM/2010 2 U/S 143(2) AND 142(1) OF THE ACT ALONG WITH DETAILE D QUESTIONNAIRE. HOWEVER, IN THE ABSENCE OF ANY RESPONSE, THE A.O. A GAIN ISSUED NOTICE U/S 142(1) OF THE ACT, WHICH WAS ALSO NOT COMPLIED WITH BY THE ASSESSEE. THE A.O. WHILE OBSERVING THAT THE ASSESSMENT IS GET TING BARRED BY LIMITATION ON 31-12-2008, THERE IS NO ALTERNATIVE B UT TO COMPLETE THE ASSESSMENT ON THE BASIS OF BEST JUDGMENT AS PROVIDE D U/S 144 OF THE ACT, DISALLOWED RS. 43.02 LACS BEING 1% OF TOTAL EX PENSES CLAIMED AT RS. 43.02 LACS AND COMPLETED THE ASSESSMENT AT AN INCOM E OF RS. 80,31,640/- VIDE ASSESSMENT ORDER DTD. 10-12-2008 P ASSED U/S 144 OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A), THE ASSE SSEE HAS FILED CERTAIN DETAILS I.E. PARTY-WISE PURCHASE/SALES, LEDGER ACCO UNT OF PURCHASE/SALES, LEDGER ACCOUNT OF ALL THE THREE BROKERS THROUGH WHO M THE PURCHASES/SALES WERE MADE, THE ACCOUNT OF THE ASSES SEE IN THE BOOKS OF SHARE BROKERS AND THE BANK ACCOUNT OF HSBC AND HDF C OF THE ASSESSEE THROUGH WHICH THE PAYMENTS/RECEIPTS TOWARDS PURCHAS E/SALES OF SHARES WERE MADE. THE LD. CIT(A) SENT THE SAID DETAILS TO THE A.O. FOR HIS REMAND REPORT FOLLOWED BY REMINDER. HOWEVER, IN AB SENCE OF ANY REPLY/REPORT FROM THE A.O., THE LD. CIT(A) OBSERVED THAT THE ADHOC DISALLOWANCE OF 1% OF EXPENSES OF RS. 43.02 LACS WA S MADE ONLY ON THE GROUND THAT THE ASSESSEE DID NOT SUBMIT THE DETAILS , HOWEVER, ALL THE PURCHASES/SALES WERE MADE THROUGH ASSESSEES BANK A CCOUNT WITH HDFC AND HSBC AND ARE REFLECTED IN THE P&L ACCOUNT, DELE TED THE DISALLOWANCE OF EXPENSES MADE BY THE A.O. ITA NO. 7673/MUM/2010 3 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US CHALLENGING IN BOTH THE GROUNDS TH E DELETION OF DISALLOWANCE OF RS. 43,02,000/- AND IN ADMITTING AD DITIONAL EVIDENCE BY THE LD. CIT(A) IN VIOLATION OF RULE 46A OF THE INCO ME TAX RULES, 1962. 4. AT THE TIME OF HEARING THE LD. D.R. SUBMITS THAT THERE IS NO DISPUTE THAT SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE AND THE ASSESSEE DID NOT APPEAR BEFORE THE A.O., THEREFORE, THE ASSESSMENT WAS COMPLETED EX PARTE U/S 144 OF THE ACT. HE FURTHER SUBMITS THAT DURING REMAND PROCEEDINGS THE A.O. HAS AGAIN AFFORDED OPPO RTUNITY TO THE ASSESSEE VIDE LETTERS DTD. 17-8-2010 AND 6-9-2010 B UT THE ASSESSEE HAS NOT MADE ANY COMPLIANCE, THEREFORE, REMAND REPORT C OULD NOT BE SUBMITTED TO THE LD. CIT(A). HE FURTHER SUBMITS TH AT SINCE THERE IS CONTRAVENTION OF RULE 46A, THEREFORE, IN THE INTERE ST OF JUSTICE, THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE A.O. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF THE ISSUE IS SET ASIDE TO THE FILE OF THE A.O. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUT E THAT BEFORE THE A.O. THE ASSESSEE HAS MADE NO COMPLIANCE DURING THE ASSE SSMENT PROCEEDING AS WELL AS IN THE REMAND PROCEEDING DESPITE THE FAC T THAT SUFFICIENT ITA NO. 7673/MUM/2010 4 OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE. SINCE THE DETAILS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) COULD NOT BE EXAMINED BY THE A.O. DURING THE REMAND PROCEEDING AS THE ASSESSEE FAILED TO MAKE ANY COMPLIANCE AND EVEN AT THIS STAGE SUCH DETAILS WERE NOT FILED BY THE ASSESSEE,, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FILE OF THE A.O. AND ACCORDIN GLY WE SET ASIDE THE ORDER PASSED BY THE REVENUE AUTHORITIES ON THIS ACC OUNT AND SEND BACK THE MATTER BACK TO THE FILE OF THE A.O. TO DECIDE T HE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE REVENUE ARE , THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, REVENUES APPEAL STANDS PARTLY AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 3-10-2012. SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 3-10-2012. RK ITA NO. 7673/MUM/2010 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 18, MUMBA I 4. COMMISSIONER OF INCOME TAX CENTRAL - 8 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI