LUXITE INDUSTRIES LTD, MUMBAI V. ITO 6(3), MUMBAI

ITA 951/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5682 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 06-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 02-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO.951/M/2011 (AY: 2006 - 2007) M/S. LUX ITE INDUSTRIES LTD., 31A - 32, IDEAL INDL. ESTATE, NATHURADAS MILLS COMPOUND, LOWER PAREL, MUMBAI 400 013. / VS. ITO - 6(3), MUMBAI. ./ PAN : AAACL 3832 E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NITISH GANDHI & MR. RYAN SALDANHA / RESPONDENT BY : SHRI M.L. PERUMAL, DR / DATE OF HEARING : 06.01.2014 / DATE OF PRONOUNCEMENT : 06.01.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 2.2.2011 IS AGAINST THE ORDER OF THE CIT (A) - 12, MUMBAI DATED 8.10.2010 FOR THE ASSESSMENT YEAR 2006 - 2007. 2. IN THIS APPEAL, ASSESSEE RAISED THE ONLY EFFECTIVE GROUND WHICH READS AS UNDER: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE CIT (A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO DISALLOWING A SUM OF RS. 12,79,994/ - U/S 40(A)(IA) OF THE ACT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF MANUFACTURING AND DEALING IN TEXTILE MACHINERY PARTS, BEARING, AUTOMOTIVE PARTS ETC. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 3,12,94,940/ - . ASSESSMENT WAS COMPLETED US/ 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DE TERMINED AT RS. 3,28,48,815/ - . DURING THE ASSESSMENT, AO MADE CERTAIN ADDITIONS I.E., (I) DISALLOWANCE OF RS. 2,73,881/ - U/S 14A AND (II) RS. 12,79,994/ - WAS DISALLOWED U/S 40(A)(IA) OF THE ACT. AGGRIEVED WITH THE ABOVE 2 ADDITIONS MADE BY THE AO, ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, CIT (A) CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE PART RELIEF GRANTED BY THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUND. 5. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, SHRI NITISH GANDHI & MR. RYAN SALDANHA, LD COUNSELS FOR THE ASSESSEE BROUGHT OUR ATTENT ION TO THE ABOVE MENTIONED GROUND AND MENTIONED THAT THE ONLY ISSUE CONTENDED BEFORE THE TRIBUNAL RELATES TO INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IN RESPECT OF THE COMMISSION PAYMENTS MADE TO THE NON - RESIDENTS, WHO ARE COVERED BY THE P ROVISIONS OF SECTION 195 OF THE ACT. IN THIS REGARD, LD COUNSEL MENTIONED THAT UNLESS THE INCOME, WHICH IS THE SUBJECT MATTER OF THE TDS, IS CHARGEABLE TO TAX IN INDIA, THE TDS PROVISIONS SHOULD NOT APPLY. BRINGING OUR ATTENTION TO THE ORDERS OF THE LOWE R AUTHORITIES, LD COUNSEL MENTIONED THAT CERTAIN CRUCIAL PAPERS, WHICH ARE HELPFUL FOR GOING INTO THE VERY NATURE OF THE PAYMENTS AS WELL AS THE PAYMENTS CHARGEABLE, WERE NOT FULLY AWARE TO THE AO AND THE CIT (A). IN THIS CONTEXT, HE BROUGHT OUR ATTENTION TO THE ADDITIONAL EVIDENCES FILED BEFORE THE TRIBUNAL AND MENTIONED THAT THE SAID PAPERS WERE NOT FILED BEFORE THE AO AS THE SAME WERE NOT DEMANDED BY HIM. FURTHER, LD COUNSEL MENTIONED THAT THE AO HAS NOT ISSUED ANY SHOW CAUSE NOTICE BEFORE INVOKING THE SAID PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IN THIS CONTEXT, LD COUNSEL PLEADED FOR ADMITTING THE ADDITIONAL EVIDENCES AND REMANDING THE MATTER TO THE FILES OF THE AO TO ADJUDICATE THE ISSUE AFRESH. 6. ON THE OTHER HAND, LD DR HAS NO OBJECTION TO TH E SAID PROPOSAL OF THE LD COUNSEL. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES, WE FIND THE PAPERS FILED BEFORE US IN THE FORM OF ADDITI ONAL EVIDENCES ARE BASICALLY THE BANK ADVICE NOTICES AND THE PARTY WISE BREAKUP OF THE COMMISSION PAYMENTS. THEY RELATE TO THE IMPUGNED COMMISSION PAYMENTS MADE WITHOUT MAKING TDS. IN ALL FAIRNESS OF THE LEGAL PROCEEDINGS, WE ARE OF THE OPINION THAT THE PRAYER OF THE ASSESSEE FOR ADMITTING THE ADDITIONAL EVIDENCES SHOULD BE ALLOWED AND 3 THE ISSUE RAISED IN THE GROUND SHOULD BE REMANDED TO THE FILES OF THE AO FOR ADJUDICATING THE ISSUE AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2014. SD/ - SD/ - (SANJAY GARG) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 06/1/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI