The DCIT, Circle-1, Surat V. M/s. Hans Dyg. & Ptg. Mills Pvt.Ltd., Surat

ITA 986/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8655 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 04-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Section: 144

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.986/AHD/2011 [ASSTT.YEAR : 2007-2008] DCIT. CIR.1 SURAT. /VS. M/S.HANS DYG. & PRTG. MILLS P. LTD. S/4, SARDAR PALACE, SARDAR MARKET PARVAT PATIYA, SURAT. PAN : AABCR 1485 Q ( (( ( -. -. -. -. / APPELLANT) ( (( ( / // / 0-. 0-. 0-. 0-. / RESPONDENT) + 1 2 ) / REVENUE BY : SHRI ROOPCHAND, SR.DR 4& 1 2 ) / ASSESSEE BY : NONE 5 1 &(* / DATE OF HEARING : 6 TH JANUARY, 2015 678 1 &(* / DATE OF PRONOUNCEMENT : 02-02-2015 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSTT.YEAR 2007-2008 IS DIRECTED AGAINST TH E ORDER OF THE CIT(A). 2. AT THE TIME OF HEARING, NON-APPEARED ON BEHALF O F ASSESSEE- RESPONDENT, AND THEREFORE, THE APPEAL OF THE REVENU E IS BEING DECIDED EX PARTE QUA THE ASSESSEE-RESPONDENT ON MERITS AFTER HEARING TH E LEARNED DR. NOTICE OF HEARING WAS SERVED IN THIS CASE BY THE DE PARTMENT AND EVIDENCE HAS BEEN FILED BY THE DEPARTMENT ON RECORD IN THIS BEHALF. ITA NO.986/AHD/2011 -2- 2. THE GROUND NO.1 OF APPEAL OF THE REVENUE IS UNDE R: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE ON ACCOUNT OF DISALLOWANCE OF MANUFACTURING EXPENSES INSPITE O F THE FAILURE ON THE PART OF THE ASSESSEE TO FURNISH SUPP ORTING PROOF OR DOCUMENTARY EVIDENCES TO SUBSTANTIATE ITS CLAIM. 3. THE LEARNED DR SUBMITTED THAT THE ASSESSEE WAS N OT COOPERATING WITH THE AO AT THE TIME OF ITS ASSESSMENT, AND THE ASSESSMENT HAS TO BE FRAMED EX PARTE QUA THE ASSESSEE UNDER SECTION 144 OF THE ACT. THE ASSESSEE COULD NOT FILE ANY EVIDENCE WITH REGARD TO MANUFACTURING EXPENSES CLAIMED BY IT AMOUNTING TO RS.1.61 CRORES. HE SUBMITTED THAT THE AO WAS REASONABLE IN DISALLOWING ONLY 10% OF THE MA NUFACTURING EXPENSES CLAIMED BY THE ASSESSEE. HE RELIED ON THE ORDER OF THE AO. 4. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSMENT IN THIS CASE WAS FRAMED BY THE AO EX PARTE UNDER SECTION 144 OF THE ACT DUE TO NON- CO-OPERATION OF THE ASSESSEE. THE ASSESSEE HAS FAI LED TO FILE EVIDENCE IN SUPPORT OF ITS CLAIM OF EXPENSES. THE CIT(A) HAS N OT PASSED ANY SPEAKING ORDER ON THIS ISSUE WHILE DELETING THE ADDITION EXC EPT SAYING THAT THE ASSESSEE HAS SUBMITTED SUFFICIENT DETAILS RELATING TO THE EXPENSES. IN THESE FACTS, WE ARE OF THE VIEW THAT THERE WAS NO JUSTIFI CATION ON THE PART OF THE CIT(A) TO DELETE THE DISALLOWANCE AT 10% OF THE TOT AL MANUFACTURING EXPENSES CLAIMED BY THE ASSESSEE AND DISALLOWANCE M ADE BY THE AO BEING REASONABLE, IS CONFIRMED AND THE GROUND NO.1 OF THE REVENUE IS ALLOWED. 5. THE GROUND NO.2 OF THE REVENUE IS AS UNDER: 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE O N ACCOUNT OF INTEREST SUBSIDY RECEIVED UNDER TUF SCHEME INSPITE OF THE FACT THAT ITA NO.986/AHD/2011 -3- THE ASSESSEE FAILED TO OFFER ANY EXPLANATION AS TO WHERE THE AMOUNT WAS CREDITED. 6. THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE H AS FAILED TO GIVE ANY EXPLANATION AS TO WHETHER THE AMOUNT OF INTERES T SUBSIDY RECEIVED UNDER TUF SCHEME WAS CREDITED BY IT. HE RELIED ON THE ORDER OF THE AO. 7. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND PERUSED THE ORDERS OF THE AO AND THE CT(A). WE FIND THAT THE A SSESSEE WAS NOT COOPERATIVE AND HAS NOT FILED ANY EXPLANATION REGAR DING QUERY OF THE AO THAT WHETHER THE SAID SUBSIDY WAS CREDITED IN THE P ROFIT & LOSS ACCOUNT OR NOT, AGAINST THE INTEREST LIABILITY OF THE COMPANY. WE FIND THAT THE CIT(A) HAS PASSED A CRYPTIC ORDER ON THIS ISSUE AND HAS RE CORDED THAT THE INTEREST SUBSIDY RECEIVABLE BY THE ASSESSEE HAS BEEN DULY AC COUNTED FOR AS PER THE MERCANTILE SYSTEM. IN THESE FACTS, WE ARE OF THE V IEW THAT IT SHALL BE INTEREST OF JUSTICE TO RESTORE THIS ISSUE TO THE FI LE OF THE CIT(A) TO DECIDE THE SAME AFRESH AS PER LAW AFTER PROVIDING REASONABLE O PPORTUNITY OF HEARING TO THE PARTIES, AND THE CIT(A) IS DIRECTED TO PASS A S PEAKING ORDER ON THIS ISSUE. WE DIRECT ACCORDINGLY. 8. THE GROUND NO.3 OF THE APPEAL OF THE REVENUE IS AS UNDER: 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENC E IN RESPECT OF FLOOD CLAIM, THUS VIOLATING PROVISION OF RULE 46A T O I.T.RULES, 1962. 9. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO . WE FIND THAT THE CIT(A) HAS PASSED A REASONABLE SPEAKING ORDER ON TH IS ISSUE, AND THERE IS NO VIOLATION OF PROVISION OF RULE 46A OF THE I.T. R ULES, 1962 IN THIS CASE, AND THEREFORE, THE ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUND NO.3 OF THE REVENUE IS DISMISSED. ITA NO.986/AHD/2011 -4- 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD