SURYANSH MARKETING INDIA PVT. LID., JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, JAIPUR

ITA 832/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2077 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Reasonable cause; Right to appeal

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA -@ ITA. NO. 832/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR CUKE VS. DCIT, CENTRAL CIRCLE 1 JAIPUR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAKCS7372L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA -@ ITA. NO. 833/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR CUKE VS. DCIT, CENTRAL CIRCLE 1 JAIPUR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAKCS7372L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RE SPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA ) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RICHA KHODA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 13/02/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT :15/02/2018 VKNS'K@ ORDER PER BENCH: THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF LD. CIT (A)-04, JAIPUR DATED 24.08.2017 FOR ITA NO. 832 & 833/JP/2017 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR VS. DCIT, JAIPUR 2 A.Y. 2011-12 & 2012-13 WHEREIN THE RESPECTIVE GROUNDS OF THE APPEAL ARE AS UNDER:- ITA NO. 832/JP/17: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) 4, JAIPUR HAS GROSSLY ERRED IN NOT ALLOWING THE ASSESSEE COMPANY TO REPRESENT ITS CASE BEFORE HIM BY IGNORING THE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE MAKING EX PARTY ORDER OF CONFIRMATION OF ORDER PASSED BY LEARNED AO. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) 4, JAIPUR HAS GROSSLY ERRED IN LAW AS WELL AS FACTS IN CONFIRMING THE ORDER PASSED BY THE LD. DCIT, CENTRAL CIRCLE-1, JAIPUR OF WRONGLY DISALLOWING LEGITIMATE INTEREST EXPENSES AMOUNTING TO RS. 1,44,000/- PAID TO CREDITORS/UNSECURED LOANS ON PLEA THAT SUBSTANTIAL LOANS AND ADVANCES AMOUNTING TO RS. 2.54 CRORE WHICH WERE GIVEN TO SISTER CONCERNS WITHOUT ANY INTEREST. ITA NO. 833/JP/17: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) 4, JAIPUR HAS GROSSLY ERRED IN NOT ALLOWING THE ASSESSEE COMPANY TO REPRESENT ITS CASE BEFORE HIM BY IGNORING THE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE MAKING EX PARTY ORDER OF CONFIRMATION OF ORDER PASSED BY LEARNED AO. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) 4, JAIPUR HAS GROSSLY ERRED IN LAW AS WELL AS FACTS IN CONFIRMING THE ORDER PASSED BY THE LD. DCIT, CENTRAL CIRCLE-1, JAIPUR OF WRONGLY DISALLOWING LEGITIMATE INTEREST EXPENSES AMOUNTING TO RS. 1,44,000/- PAID TO CREDITORS/UNSECURED LOANS ON ITA NO. 832 & 833/JP/2017 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR VS. DCIT, JAIPUR 3 PLEA THAT SUBSTANTIAL LOANS AND ADVANCES AMOUNTING TO RS. 44.66 LAKH FOR AY 2012-13, WHICH WERE GIVEN TO SISTER CONCERNS WITHOUT ANY INTEREST. 2. THE LD. AR SUBMITTED THAT AS THE COUNSEL REPRESENTING THE MATTER WAS NOT AVAILABLE AT THE SCHEDULED DATE OF HEARING, BOTH THE APPEALS HAVE BEEN DECIDED BY THE LD CIT(A) EX-PARTE QUA THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT AS THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUNDS AS APPARENT FROM THE FINANCIAL STATEMENTS, THE MATTER MAY BE DECIDED ON MERIT INSTEAD OF REMITTING IT BACK TO THE LD CIT(A). 3. PER CONTRA, THE LD. DR SUBMITTED THAT ADEQUATE OPPORTUNITIES HAVE BEEN GRANTED TO THE ASSESSEE BY THE LD. CIT(A) TO REPRESENT ITS CASE, HOWEVER, THE ASSESSEE HAS CHOSEN NOT TO REPRESENT ITS CASE. IT WAS FURTHER SUBMITTED THAT WHERE THE BENCH SO DECIDE TO HEAR AND DECIDE THE MATTER ON MERIT, IN ABSENCE OF FINDINGS OF THE LD CIT(A) ON MERIT, THE MATTER MAY BE REMANDED TO THE FILE OF THE LD CIT(A). 4. THE RELEVANT FINDINGS OF THE AO ARE AS UNDER:- ON VERIFICATION OF ACCOUNTS IT IS SEEN THAT ASSESSEE HAS CLAIMED INTEREST EXPENDITURE OF RS. 144000 PAID TO TWO CREDITORS. THE BALANCE SHEET OF THE ASSESSEE INDICATED SUBSTANTIAL LOANS AND ADVANCES OF SISTER CONCERNS WITHOUT ANY INTEREST. SUCH LOANS/ADVANCES ARE OF RS. 2.54 CRORE. NO JUSTIFICATION IS GIVEN AS TO WHY NO INTEREST WAS CHARGED FROM THE DEBTORS WHEN INTEREST WAS PAID TO UNSECURED LOANS. IN THE GIVEN SET OF CIRCUMSTANCES THERE WAS NO NEED OF ANY INTEREST BEARING UNSECURED LOANS AND THUS EXPENDITURE OF INTEREST CANNOT BE CONSIDERED FOR THE PURPOSE OF BUSINESS. THE PURPOSE OF TAKING UNSECURED LOANS WAS TO ITA NO. 832 & 833/JP/2017 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR VS. DCIT, JAIPUR 4 ADVANCE THE SAME TO SISTER CONCERNS WITHOUT ANY INTEREST. THIS EXPENDITURE OF RS. 144000 IS THUS NOT ALLOWABLE U/S 36(1)(III) OF THE IT ACT AND SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. THE LD CIT(A) HAS HELD THAT ADEQUATE OPPORTUNITIES WERE GIVEN TO THE APPELLANT WHICH HAVE EITHER NOT BEEN COMPLIED WITH OR THE APPELLANT HAS FILED ADJOURNMENT LETTER WITH FRIVOLOUS REASONS. THE LD CIT(A) HELD THAT APPELLANT IS NOT INTERESTED IN FILING SUPPORTING DETAILS AND PURSING IT FURTHER AND THE APPEAL WAS ACCORDINGLY DISMISSED. SIMILAR POSITION EXISTS FOR THE SUBSEQUENT YEAR. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE LD CIT(A) HAS DISMISSED THE APPEALS FOR NON-APPEARANCE BY THE ASSESSEE OR ITS AUTHORIZED REPRESENTATIVE ON THE SCHEDULED DATE OF HEARINGS. THE ASSESSEE SHOULD BE CONSCIOUS OF THE FACT THAT THOUGH THE STATUE HAS PROVIDED IT WITH A RIGHT OF APPEAL, SUCH RIGHT IS NOT AN ABSOLUTE RIGHT AND IT COMES WITH AN ADDED RESPONSIBILITY WHEREBY THE ASSESSEES CONDUCT IS GOVERNED AND REGULATED BY CERTAIN WELL LAID DOWN NORMS AND PROCEDURES. ONE OF SUCH NORMS IS TO ATTEND TO THE PROCEEDINGS AT THE SCHEDULED DATE OF HEARING AND SUBMIT THE DESIRED INFORMATION/EXPLANATION AS SOUGHT BY THE APPELLATE AUTHORITY. THE DISPENSATION OF JUSTICE CANNOT BE EXPECTED UNILATERALLY FROM THE ITA NO. 832 & 833/JP/2017 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR VS. DCIT, JAIPUR 5 APPELLATE AUTHORITIES UNLESS AND UNTIL THE ASSESSEE COME FOREWARD AND SUPPORT IN THE PROCEEDINGS BY WAY OF TIMELY ATTENDANCE AND SUBMITTING THE DESIRED INFORMATION/DOCUMENTATION. THE ASSESSEE AND/OR ITS COUNSEL CANNOT CHOOSE NOT TO ATTEND TO THE PROCEEDINGS BEFORE THE LD CIT(A) AND AT THE SAME TIME, MOVE AN APPLICATION BEFORE US CRYING FOR NON-GRANT OF ADEQUATE OPPORTUNITY BY THE LD CIT(A). DURING THE COURSE OF HEARING, THE LD AR HAS STATED THAT IT WAS NEVER THE INTENTION OF THE ASSESSEE TO ABUSE THE APPELLATE PROCEEDINGS BUT DUE TO NON-AVAILABILITY OF THE COUNSEL AT THE SCHEDULED DATE OF HEARING, THE MATTER COULDNT BE REPRESENTED BEFORE THE LD CIT(A) AND IN THE INTEREST OF JUSTICE, ONE MORE OPPORTUNITY MAY BE GRANTED TO THE ASSESSEE. THE LD DR DIDNT RAISE ANY OBJECTION IF THE MATTER IS SET-ASIDE TO THE FILE OF THE LD CIT(A). IN ABSENCE OF FINDINGS OF THE LD CIT(A) ON MERIT, WE DONOT THINK IT WOULD BE APPROPRIATE FOR US TO DECIDE THE MATTER. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE ARE THEREFORE PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE LD. CIT(A). THE ASSESSEE SHALL ATTEND TO THE PROCEEDINGS SO SCHEDULED BY THE LD CIT(A) AND SHALL NOT SEEK ANY ADJOURNMENT IN THE MATTER WITHOUT SHOWING REASONABLE CAUSE. THE MATTER IS ACCORDINGLY SET ASIDE TO THE FILE OF THE LD CIT(A) TO DECIDE THE SAME AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. ITA NO. 832 & 833/JP/2017 SURYANSH MARKETING INDIA PVT. LTD., JAIPUR VS. DCIT, JAIPUR 6 IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15/02/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15/02/2018. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SURYANSH MARKETING INDIA PVT. LTD., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CENTRAL CIRCLE-1, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 832 & 833/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR