M/s New Swan Auto Components (P) Ltd., Ludhiana V. ACIT, Ludhiana

ITA 768/CHANDI/2011

• Counselvise Citation: 76821514 RSA 2011
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Depreciation; Principle of natural justice; Additional depreciation; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 768/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S NEW SWAN AUTO COMPONENTS (P) LTD., VS. THE ACIT , LUDHIANA CIRCLE-1, LUDHIANA PAN NO. AADFN2787Q (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT.JAISHREE SHARMA DATE OF HEARING : 19.09.2011 DATE OF PRONOUNCEMENT : 22.09.2008 ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE AGAINST THE ORDER OF CIT (A)-1, LUDHIANA DATED 11.5.2011 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A)-I HAS ERRED IN LAWA AND ON THE FACTS OF THE CASE. 2. THAT THE LD. CIT(A)-I HAS ERRED AND IS AGAINST THE FACTS BY NOT ALLOWING THE ADDITIONAL DEPRECIATION AS CLAIMED IN THE RETURN BY RS. 11,49,810/-. 3. THAT THE LD. CIT(A)-I IS AGAINST THE FACTS OF THE CASE BY DISALLOWING INTEREST U/S 36(1)(III) BY RS. 9,75,115/- ON ACCOUNT OF INTEREST FREE LOAN PROVIDED TO SISTER CONCERN ON THE BASIS OF THE 2 JUDGMENT ANNOUNCED BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S ABHISHEK INDUSTRIES LTD. 4. THAT THE LD. CIT(A)-I IS WRONG IN MAKING AN ADDITION OF RS. 1,04,239/- BY ADDING INTEREST COMPONENT TO THE CAPITAL COST OF BUILDING AND DISALLOWING IT AS REVENUE EXPENDITURE. 5. THAT THE LD. CIT(A)-1 HAS ERRED IN NOT ACCEPTING THE EXPENDITURE OCCURRED ON ACCOUNT OF FOREIGN TRAVELLING OF THE DIRECTORS TO THE TUNE OF RS. 5,60,595/- 6. THAT THE LD. CIT(A)-1 HAS ERRED IN TREATING EXPENDITURE OCCURRED ON MACHINERY REPAIR TO THE TUNE OF RS. 2,73,520/- AS CAPITAL EXPENDITURE. 7. THAT THE APPEAL BY ALLOWED IN FULL AND THE ORDER OF THE ASSESSING OFFICER BE SET ASIDE. 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEA L BUT THE PRELIMINARY ISSUE ARISING IN THE CASE IS AGAINST TH E EX-PARTE ORDER PASSED BY THE LD. CIT(A). FURTHER, THE CIT(A) HAS NOT PAS SED THE ORDER ON THE MERITS BY CONSIDERING THE GROUNDS OF APPEAL AND FAC TS OF THE CASE AS MENTIONED IN THE ASSESSMENT ORDER. 4. NONE APPEARED FOR THE ASSESSEE AND SMT. JAISHREE SHARMA APPEARED FOR THE REVENUE AND PUT FORWARD HER CONTENTIONS. WE PROCEED TO DECIDE THE PRESENT APPEAL IN VIEW OF THE PRELIMINARY ISSUE RAISED. 5. THE PRELIMINARY ISSUE IN THE PRESENT APPEAL IS A GAINST THE PASSING OF AN EX.PARTE ORDER BY THE LD. CIT(A) DUE TO THE NON ATTENDANCE OF THE ASSESSEE ON THE VARIOUS DATES OF HEARING BEFORE THE CIT(A). THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER OF CIT(A). THE PRINCIPLE OF NATURAL JUSTICE REQUIRES REASONABLE OPPORTUNITY OF HEARING TO BE ALLOWED TO THE ASSESSEE BEFORE PASSING AN ORDER. WE FIND THAT CIT(A) HAS NOT PASSED 3 A SPEAKING ORDER IN THE CASE. UNDER THE PROVISIONS OF SECTION 250(6) OF THE INCOME TAX ACT, THE CIT(A) HAS TO PASS A SPEAKI NG ORDER IN RESPECT OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AFTER HEARING THE ASSESSEE. WE FIND THAT CIT(A) IN THE PRESENT CASE HAS FAILED TO FOLLOW THE PROCEDURE IN APPEAL PROCEEDINGS AS LAID DOWN IN SECTION 250 O F THE INCOME TAX ACT. IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTO RE THE ISSUE BACK TO THE FILE OF CIT(A) TO DECIDE THE ISSUE RAISED BY THE AS SESSEE VIDE SPEAKING ORDER AFTER ALLOWING REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE CIT(A ) ON THE APPOINTED DATE/S OF HEARING AND PRESENT HIS CASE. THE GROUND S OF APPEAL RAISED BY THE ASSESSEE ARE THUS ALLOWED FOR STATISTICAL PURPO SES. WE ARE NOT ADDRESSING THE ISSUE ON MERITS IN VIEW OF OUR SETTI NG ASIDE THE ISSUE TO THE FILE OF CIT(A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF SEPTEMBER, 2011. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND SEPTEMBER, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, 4 ITAT, CHANDIGARH