Smt.Diga Himabindu Reddy, Bangalore V. Income-Tax Officer, Bangalore

ITA 778/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5349 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT BENGALURU
• Assessee Lawyers: S N SHANBHOG
• Keywords: Depreciation; Opportunity of being heard; Additional evidence
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.778/BANG/2017 ASSESSMENT YEAR : 2012-13 SMT. DEGA HIMABINDU REDDY, NO.63/B, SHOBHA MALACHITE, JAKKUR, BANGALORE 560 064. PAN: AIFPR 2180R VS. THE INCOME TAX OFFICER, WARD 6(2)(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.N. SHANBHOG, ADVOCATE RESPONDENT BY : SMT. SWAPNA DAS, JT.CIT(DR)(ITAT)-2, BENGALURU DATE OF HEARING : 17.05.2017 DATE OF PRONOUNCEMENT : 26.05.2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. ORDER OF THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS), BANGALORE-6 IS OPPOSED TO LAW ON THE FAC TS OF THE CASE. 2. THE LEARNED CIT (A) HAS HELD THAT SINCE THE BUS INESS OF THE APPELLANT WAS TAKEN OVER BY WAY OF SALE TO ANOTHER COMPANY ON 31-05-2011, THE APPELLANT IS NOT ENTITLED FOR FULL DEPRECIATION ON THE CAR. THE CAR WAS NOT TRANSFERRED TO THE NEW COM PANY BUT RETAINED BY THE APPELLANT AND USED FOR RECOVERY OF DEBTS OF HIS EARLIER BUSINESS. THE DEPRECIATION WAS NOT ALLOWED ON THE GROUND THAT THE SAME IS USED FOR LESS THAN 180 DAYS, WHEN IN FACT, THE DUES WERE TO BE REALISED BY YOUR APPELLANT OF THE S AME OLD ITA NO.778/BANG/2017 PAGE 2 OF 4 BUSINESS, AND THE CAR WAS USED BY YOUR APPELLANT FO R MORE THAN 180 DAYS. EVEN OTHERWISE, APPELLANT IS ENTITLED FOR FULL DEPRECIATION WHEN THE CAR WAS USED FROM THE BEGINNI NG OF THE FINANCIAL YEAR. 3. THE CIT (A) ERRED IN NOT ACCEPTING THE PLEA OF THE APPELLANT THAT THE A.O. CONFIRMED IN HIS ORDER THAT YOUR APPELLANT IS ENTITLED FOR 50% OF THE DEPRECIATION WHICH IS RS .L,65,595/-. HOWEVER, A.O. WHILE COMPUTING HAS DISALLOWED FULL D EPRECIATION, WHICH IS NOT IN ORDER. THE CIT(A) ALSO DID NOT RECT IFY THIS ERROR. IN FACT, YOUR APPELLANT IS ENTITLED FOR FULL DEPREC IATION AS ENUMERATED AT GROUND (2) ABOVE. 4. THE CIT (A) HAS CONFIRMED THE ADDITION OF RS.2, 13,189/- BEING SUNDRY CREDITORS STATING THAT NO CONFIRMATION LETTER HAS BEEN FILED WHEN IT IS NOT SUNDRY CREDITORS BUT OUTSTANDI NG EXPENSES WHICH WERE DISCHARGED AND SINCE THEY ARE NOT CREDIT ORS FOR FINANCE, THE CONFIRMATION LETTER WAS NOT FILED. HEN CE, THIS ADDITION HAS TO BE DELETED. 5. THE CIT (A) HAS CONFIRMED THE ADDITION OF RS. 5 6,345/- BEING ADDITION OF OUTSTANDING TAXES AND DUTIES U/S 43B OF THE IT ACT. THIS AMOUNT IS TOWARDS ESI OF RS.2665/- AND TD S OF RS.53,480/- . THE APPELLANT'S BUSINESS HAS RUN ONLY FOR 2 MONTHS AND HENCE NOT LIABLE FOR ESI AND TDS. THEREFORE, TH IS ADDITION TO BE DELETED. 6. THE CIT (A) HAS CONFIRMED THE ADDITION U/S 40 ( A)( IA) OF THE IT ACT OF RS.4,79,7411- BEING INTEREST PAID TO OTHER THAN BANKS WITHOUT DEDUCTING THE TDS. THE APPELLANT'S BU SINESS WHICH WAS RUN ONLY FOR 2 MONTHS IN THE FINANCIAL YE AR AND THE LOAN WAS REPAID TO TATA FINANCE. AS THE TATA GROUP OF COMPANIES WAS UNDER THE PROCESS OF MERGER AT THAT TIME, IT WA S NOT POSSIBLE TO GET THE PAN DETAILS OF THE NEW COMPANY FOR MAKIN G TDS AT THAT POINT OF TIME. AS THE BUSINESS WAS SOLD / TAKE N OVER BY ANOTHER COMPANY, THE DUES HAD TO BE CLEARED. THE CH EQUE SENT WAS RETURNED BY TATA FINANCE TO PAY IT TO THE MERGE D COMPANY FOR WHICH PAN NO. WAS NOT IMMEDIATELY AVAILABLE AND PAYMENT OF DUES COULD NOT WAIT SINCE THE BUSINESS HAD TO BE TAKEN OVER BY ANOTHER COMPANY. UNDER THE CIRCUMSTANCES,' YOUR APP ELLANT HAD TO CLEAR THE DUES WITHOUT EFFECTING TDS. HENCE THIS ADDITION MAY KINDLY BE DELETED. ITA NO.778/BANG/2017 PAGE 3 OF 4 7. THE CIT(A) HAS CONFIRMED THE ADDITION MADE U/S 40(A) (IA) OF RS.12,28,778/- BEING HIRE CHARGES PAID HOLDING T HAT THE APPELLANT HAS NOT FILED THE DETAILS OF PAN OF THE T RANSPORTERS. A.O. HAD ASKED ONLY FOR DETAILS OF THE HIRE CHARGES PAID TO VARIOUS TRANSPORTERS WHICH WERE DULY SUBMITTED TO A.O. PAN DETAILS OF THE TRANSPORTERS WERE NOT ASKED FOR BY THE A.O. HOW EVER, THE PAN DETAILS OF THE TRANSPORTERS WERE FILED BEFORE T HE CIT(A), WHICH WERE REFUSED TO BE ADMITTED AS ADDITIONAL EVI DENCE, STATING THAT THE COPY OF THE PAN CARDS WERE NOT FURNISHED A ND SAME WERE NOT FILED BEFORE A.O. CIT(A) SHOULD HAVE ACCEPTED T HE ADDITIONAL EVIDENCE PRODUCED AND THERE IS NO REASON TO REJECT THE SAME. HENCE THE ADDITION OF HIRE CHARGES PAID IS NOT IN O RDER, JUST FOR THE REASON THAT PAN CARD COPIES WERE NOT PRODUCED. P AN DETAILS WERE NOT CALLED FOR BY THE A.O. AND PAN CARD COPIES WERE NOT CALLED FOR BY THE CIT(A). HENCE THIS ADDITION OF HI RE CHARGES PAID OF RS.12,28,778/- NEEDS TO BE DELETED. 8. THE CIT (A) HAS CONFIRMED THE ADDITION OF RS.6, 80,000/- BEING INTEREST ON BORROWED CAPITAL STATING THAT NO EVIDENCE WAS PRODUCED. YOUR APPELLANT PLEADED THAT NO SUCH INTER EST WAS CLAIMED BY THE APPELLANT IN THE P&L A/C. YOUR APPEL LANT FAILS TO UNDERSTAND THE SOURCE OF THIS AMOUNT OF RS.6,80,000 1- WHICH THE A.O. ALLEGES AS INTEREST ON BORROWED CAPITAL. THIS ADDITION OF RS.6,80,0001- FROM NOWHERE NEEDS TO BE DELETED. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS INVITED OUR ATTENTION THAT AO HAS MADE ADDITIONS UN DER DIFFERENT HEADS AGAINST WHICH AN APPEAL WAS FILED BEFORE THE CIT(AP PEALS). THOUGH ASSESSEE HAS FILED SOME RELEVANT EVIDENCE ON THE IM PUGNED ISSUES, BUT IT WAS NOT CONSIDERED BY THE CIT(APPEALS) WHILE DEALIN G WITH THE ISSUES ON MERIT. IN SUPPORT OF HIS CONTENTION, HE INVITED MY ATTENTION TO THE ORDER OF CIT(APPEALS), WHERE HE HAS SUMMARILY REJECTED THE C ONTENTIONS OF THE ASSESSEE, EVEN WITHOUT LOOKING INTO THE ADDITIONAL EVIDENCE FILED BEFORE ITA NO.778/BANG/2017 PAGE 4 OF 4 HIM. IT IS ALSO OBVIOUS FROM THE ORDER OF CIT(APPE ALS) THAT HE HAS NOT EXAMINED THE ADDITIONAL EVIDENCE FILED BEFORE HIM. THEREFORE, I AM OF THE VIEW THAT READJUDICATION BY THE CIT(APPEALS) IS CAL LED FOR ON THE IMPUGNED ISSUES, IN THE INTEREST OF JUSTICE. I ACCORDINGLY SET ASIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE MATTER TO HIS FILE WIT H A DIRECTION TO READJUDICATE THE IMPUGNED ISSUES ON MERIT, AFTER AF FORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF MAY, 2017. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 26 TH MAY, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.