Income Tax Officer, Ward - 1(1)(3), Bangalore V. M/s. ATC Beverages Private Limited, Bangalore

ITA 891/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7570 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 25-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.891/BANG/2019 ASSESSMENT YEAR : 2014-15 THE INCOME-TAX OFFICER, WARD-1(1)(3), BENGALURU. VS. M/S ATC BEVERAGES PVT. LTD., NO.202, MONEY CENTRE, 4 TH FLOOR, 121, KORAMANGALA INDUSTRIAL AREA, HOSUR ROAD, BENGALURU. PAN AAECA 7901 R. APPELLANT RESPONDENT APPELLANT BY : SHRI R.N SIDDAPPAJI, ADDL. CIT (DR) RESPONDENT BY : SHRI V SRIDHAR, C.A DATE OF HEARING : 23.07.2019 DATE OF PRONOUNCEMENT : 23.07.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE O RDER PASSED BY LD CIT(A)-1, BENGALURU AND IT RELATES TO THE ASSESS MENT YEAR 2014- 15 ON THE FOLLOWING ISSUES:- (A) DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO ESI (B) REJECTION OF RIGHT OF CARRY FORWARD OF LOSSES. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF M ANUFACTURE OF SOFT BEVERAGES. THE ASSESSMENT WAS COMPLETED BY THE AO U/S 143(3) OF THE ACT MAKING ABOVE SAID DISALLOWANCES. SINCE THE LD CIT(A) GRANTED RELIEF ON ABOVE ISSUES, THE REVENUE HAS FIL ED THIS APPEAL. ITA NO.891/BANG/2019 PAGE 2 OF 5 WITH REGARD TO THE SECOND ISSUE CITED ABOVE, THE RE VENUE IS CONTENDING THAT THE LD CIT(A) HAS VIOLATED PROVISIO NS OF RULE 46A BY ADMITTING ADDITIONAL EVIDENCES WITHOUT CONFRONTI NG THEM WITH THE AO. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE FIRST ISSUE RELATES TO DISALLOWANCE OF EMPLOYEES CONTRIBUTION T O ESI MADE U/S 36(1)(VA) OF THE ACT, ON THE REASONING THAT THE SAM E HAS BEEN PAID BEYOND THE DUE DATE PRESCRIBED UNDER THE ESI ACT. THE LD CIT(A) ALLOWED THE CLAIM BY FOLLOWING THE DECISION RENDERE D BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF SABARI ENTERPRI SES (2008)(298 ITR 141)(KAR), ON NOTICING THAT THE ASSESSEE HAS PA ID THE EMPLOYEES CONTRIBUTIONS BEFORE THE DUE DATE PRESCRIBED FOR FI LING RETURN OF INCOME U/S 139(1) OF THE ACT. 4. SINCE THE LD CIT(A) HAS FOLLOWED THE BINDING DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF SABA RI ENTERPRISES (SUPRA) ON AN IDENTICAL ISSUE, WE DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE. 5. THE NEXT ISSUE RELATES TO THE REJECTION OF C LAIM FOR CARRY FORWARD OF LOSSES. THE AO NOTICED THAT THERE WAS A CHANGE IN SHAREHOLDING PATTERN IN THE ASSESSEE COMPANY DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDER ATION, I.E., THE AO NOTICED THAT 61.72% OF THE SHAREHOLDING HAS CHAN GED HANDS. SINCE THE AO WAS DOING LIMITED SCRUTINY, HE DID NOT CALL FOR DETAILS THEREOF. HOWEVER, WITHOUT EXAMINING THE RELEVANT D ETAILS, THE AO HELD THAT THE PROVISIONS OF SEC.79 SHALL BE APPLICA BLE AND ITA NO.891/BANG/2019 PAGE 3 OF 5 ACCORDINGLY HELD THAT THE ASSESSEE SHALL NOT BE ENT ITLED TO CARRY FORWARD ITS LOSSES. 6. BEFORE LD CIT(A), THE ASSESSEE SUBMITTED ALL THE RELEVANT DETAILS AND SUBMITTED THAT THERE WAS NO CHANGE IN T HE BENEFICIARY, EVEN THOUGH THERE IS CHANGE IN THE NAME OF BEHOLDER OF SHARES. THE LD CIT(A), ON BEING CONVINCED WITH THE INFORMATION AND EXPLANATIONS FURNISHED BY THE ASSESSEE, SET ASIDE T HE ORDER OF THE AO. THE REVENUE IS CONTENDING THAT THERE IS VIOLAT ION OF RULE 46A OF THE I T RULES IN NOT CONFRONTING THE DETAILS WITH T HE AO. 7. WE HEARD THE PARTIES AND PERUSED THE RECORD . ADMITTEDLY, THE AO HAS DENIED THE RIGHT OF CARRY FORWARD OF LOSSES WITHOUT CALLING FOR EXPLANATIONS FROM THE ASSESSEE. HOWEVER, THE L D CIT(A) HAS EXAMINED THOSE DETAILS AND HAS COME TO THE CONCLUSI ON THAT THE PROVISIONS OF SEC.79 ARE NOT APPLICABLE. SINCE THE LD CIT(A) HAS EXAMINED THE DOCUMENTS AND DETAILS FURNISHED BEFORE HIM, THE REVENUE IS CONTENDING THAT THERE IS VIOLATION OF RU LE 46A OF THE I T RULES. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO HIS FILE FOR EXA MINING IT AFRESH BY CONFRONTING THE RELEVANT DETAILS WITH THE AO. AFTE R AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE, THE LD CIT(A) MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. ITA NO.891/BANG/2019 PAGE 4 OF 5 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2019. SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 23RD JULY, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NO.891/BANG/2019 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. DICTATION NOTE ENCLOSED . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..