Smt. Seema Ajay Ranka, Vadodara V. The Deputy Commissioner of Income Tax, Circle-1(2), Vadodara

ITA 856/AHD/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5149 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MILIND MEHTA
• Keywords: Opportunity of being heard; Capital expenditure; TDS
• Section: 143(3); 234B; 40(a)(ia); 195; 80IA; 201; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 856/AHD/2017 (ASSESSMENT YEAR: 2013-14) SMT. SEEMA AJAY RANKA, PROP: ZYDEX INDUSTRIES, PLOT NO. 61, GOTRI SEVASI ROAD, VADODARA V/S THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), VADODARA (APPELLANT) (RESPONDENT) PAN: ABLPR 6874K APPELLANT BY : SHRI MILIND MEHTA, AR RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 04 -07-201 8 DATE OF PRONOUNCEMENT : 01 -10-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE EX- PARTE ORDER OF THE LD. CIT(A)-4, VADODARA DATED 30.12.2016 PERTAINING TO A .Y. 2013-14 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 856/ AHD/2017 . A.Y. 2013-14 2 EXPARTE ORDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) - 4, VADODARA ['THE CIT(A)'] ERRED IN LAW AND IN FACTS IN IN PASSING TH E ORDER EXPARTE. 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN PASSING THE ORDER WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD. 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN PASSING THE ORDER EXPARTE DESPITE THE FACT THAT NO NOTICE FIXING THE HEARING ON 28-12-2016 WAS SERVED ON THE APPELLANT. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN DECIDING MATTER FOR AY 2013- 14 EXPARTE DESPITE THE FACT THAT MATTERS FOR AY 201 2-13 AND AY 2013-14 WERE SIMILAR MATTERS CONTAINING SIMILAR GROUNDS OF APPEA L WHICH WERE FIXED SIMULTANEOUSLY AND THE APPELLANT HAD DULY APPEARED AND FILED DETAILED SUBMISSION FOR AY 2012-13 VIDE SUBMISSIONS DATED 15 -11-2016. DEDUCTION U/S. 80IA OF RS. 71,81,714/- 5. THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED DEPUTY COMMISSIONER OF THE INCOME TAX, CIRC LE - 1(2), BARODA ('THE AO') IN DISALLOWING THE CLAIM OF DEDUCTION U/S. 80IA AMO UNTING TO RS.71,81,714/-. 6. THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN HOLDING THAT THE POWER UNIT IS NOT A SEPARATE UNDERTAKING AND THEREBY DISALLOWING THE CLAIM OF RS. 71,81,714/- U/S 80IA O F THE ACT PATENT EXPENSES OF RS. 52,05,549/- 7. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING PATENT EXPENSES AMOUNTING TO RS. 52,05,549/- AS CAPITAL EXPENDITURE. DISALLOWANCE U/S. 40(A)(I) OF RS. 1,61,03,541/- ITA NO. 856/ AHD/2017 . A.Y. 2013-14 3 8. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING THE PAYMENTS MADE TO THE NON-RESI DENTS OF RS.1,61,03,5417- INVOKING SECTION 40(A)(I) OF THE ACT. 9. THE LEARNED CIT(A) ERRED IN FACT AND IN L AW IN CONFIRMING THE ACTION OF THE AO IN MAKING THE DISALLOWANCE BY INVOKING THE PROVI SIONS OF SECTION 195 OF THE ACT WITHOUT CONSIDERING THE FACT THAT SUMS PAID TO NON-RESIDENTS WAS NOT CHARGEABLE TO TAX IN INDIA. DIFFERENCE IN INCOME AS PER FORM 26AS OF RS. 6,17,6 00/- 10. THE LEARNED CIT(A) ERRED IN FACT AND IN LA W IN CONFIRMING THE ACTION OF THE AO IN MAKING AN ADDITION OF RS. 6,17,6007- AS UNDIS CLOSED RECEIPTS WITHOUT CONSIDERING THE FACT THAT THE INCOME HAS BEEN DULY ACCOUNTED IN THE BOOKS OF THE APPELLANT. 11. THE LEARNED CIT(A) ERRED IN FACT AND IN LA W IN CONFIRMING THE ACTION OF THE AO IN MAKING DOUBLE ADDITION OF 6,17,600/- TO THE T OTAL INCOME OF THE APPELLANT. ADDITION OF RS. 16,70,330/- U/S. 68 OF THE ACT 12. THE LEARNED CIT(A) ERRED IN FACT AND IN L AW IN CONFIRMING THE ACTION OF THE AO IN MAKING AN ADDITION OF RS. 16,70,330/- BY INVO KING THE PROVISIONS OF SECTION 68 OF THE ACT. OTHER GROUNDS 13. THE LEARNED CIT(A) ERRED IN FACT AND IN L AW IN CONFIRMING THE ACTION OF THE AO IN CHARGING INTEREST U/S 234B OF THE ACT. 14. THE LEARNED CIT(A) ERRED IN FACT AND IN L AW IN CONFIRMING THE ACTION OF THE AO IN INITIATING PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT. 15. YOUR APPELLANT CRAVES THE RIGHT TO ADD TO OR ALTER, AMEND, SUBSTITUTE, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. ITA NO. 856/ AHD/2017 . A.Y. 2013-14 4 2. THE FACTS OF THE CASE ARE THAT THE APPELLANT IS RUN NING A PROPRIETARY CONCERNED BUSINESS IN THE NAME OF ZYDEX INDUSTRIES WHICH IS E NGAGED IN THE MANUFACTURING AND TRADING OF CHEMICALS. THE APPELLA NT HAS FILED RETURN OF INCOME FOR THE A.Y. 2013-14 ON 28.09.2013 DECLARING TOTAL INCOME AT RS. 10,10,54,040/-. THE ASSESSMENT ORDER U/S. 143(3) OF THE INCOME TAX ACT WAS FINALIZED ON 05.02.2016, DETERMINING TOTAL INCOME O F RS. 12,33,49,680/-. THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF RS. 71,81,714/- AS CLAIM U/S. 80IA OF THE I.T. ACT, DISALLOWANCE OF PATENT APPLIC ATION FEES EXPENSES OF RS. 39,04,162/-, DISALLOWANCE OF RS. 1,61,03,541/- AS U /S. 40(A)(IA) FOR NON DEDUCTION OF TDS ON PAYMENTS MADE TO NON RESIDENTS, ADDITION OF RS. 61,17,600/- AS UNDISCLOSED RECEIPTS AND ADDITION OF RS. 16,70,330/- ON ACCOUNT OF INVOKING SECTION 68 OF THE ACT. 3. AGAINST THE SAID ADDITION, APPELLANT PREFERRED FIRS T STATUTORY APPEAL BEFORE THE LD. CIT(A). THE CASE WAS FIXED FOR HEARING ON 31.07 .2016. THEREAFTER, IT WAS FINALLY FIXED FOR 28. 12.2016 BUT APPELLANT REPRESE NTATIVE COULD NOT FURNISH ANY DETAIL BEFORE THE LD. CIT(A). THEREFORE, IN THE ABS ENCE OF ANY EXPLANATION/DOCUMENT/EVIDENCE, LD. CIT(A) DISMISSED THE APPEAL OF THE APPELLANT. 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. APPELLANT STATED THAT NO NOTICE FOR FIXING THE HEARING ON 28. 12.2016 WAS SERVED ON THE APPELLANT. IN SUPPORT OF ITS CONTENTION, ASSESSEE R EPRESENTATIVE ALSO FILED THEIR AFFIDAVIT. THEREFORE, NOBODY COULD APPEAR ON BEHALF OF THE APPELLANT. THEREFORE, IN THE INTEREST OF THE JUSTICE, WE SET A SIDE THE ORDER OF THE LD. CIT(A) AND DIRECT HIM TO DECIDE MATTER AFRESH AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ASSESSEE IS ALSO DIRECTED NOT TO SEEK ANY ADJOURNMENT ITA NO. 856/ AHD/2017 . A.Y. 2013-14 5 AND SHALL APPEAR BEFORE THE LD. CIT(A) AS AND WHEN CALLED BY HIM AND WILL SUBMIT ALL THE RELEVANT DETAILS BEFORE HIM. 5. SO FAR MERITS ARE CONCERNED; WE RESTRAIN OURSELVES TO MAKING ANY COMMENT ON THE MERIT OF THE CASE. HOWEVER, LD. CIT(A) WILL DEC IDE THE MATTER ON MERIT AFTER HEARING OF THE APPELLANT. 6. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED IN OPEN COURT ON 01 - 10- 2018 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 01/10/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD