Bright Construction, Bharuch V. The Income tax Officer,Ward-2, Baroda

MA 136/AHD/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7333 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 25-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N SOPARKAR
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER M.A. NO.136/AHD/2011 IN I.T.A. NO.1347 / AHD/2010 (ASSESSMENT YEAR 2004-05) M/S. BRIGHT CONSTRUCTION, AT & PO ACHHOD, DISTT. BHARUCH VS. ITO, WARD 2, BHARUCH PAN/GIR NO. : AAGFB7619E (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI S N SOPARKAR, AR RESPONDENT BY: SHRI B L YADAV, DR DATE OF HEARING: 25.11.2011 DATE OF PRONOUNCEMENT: 21.12.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS MISCELLANEOUS APPLICATION IS FIELD BY THE ASS ESSEE SEEKING RECALL OF EX-PARTE ORDER DATED 13.05.2011. IT IS S UBMITTED IN THE MISCELLANEOUS APPLICATION THAT THE ASSESSEE WAS ADV ISED BY THE CHARTERED ACCOUNTANT SITTING AT BARODA THAT IT WILL BE NECESS ARY TO ENGAGE AN ADVOCATE AS WELL AS TO FILE PAPER BOOK OF THE RELEV ANT DOCUMENTS AND THE ASSESSEE WAS GIVEN TO UNDERSTAND THAT DUE TO THE PR ECEDENCE FOLLOWED BY THE BENCH OF THE TRIBUNAL, THE APPEAL FILED IN THE YEAR 2010 WILL BE ADJOURNED SINE DIE TO THE NEXT DATE FOR HEARING. I T IS SUBMITTED THAT THE ASSESSEE WAS UNDERGOING THE PROCESSES OF PREPARING THE PAPER BOOK AND ENGAGE ADVOCATE BUT THE TRIBUNAL HAS DECIDED THE AP PEAL EX PARTE ON THE M.A.NO. 136 /AHD/2011 2 BASIS OF THE SUBMISSIONS OF THE LD. D.R. AND HENCE, THE EX-PARTE TRIBUNAL ORDER SHOULD BE RECALLED. 2. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME CONTENTIONS WHICH ARE RAISED BY THE ASSESSEE IN THE MISCELLANEO US APPLICATION. IT WAS ALSO SUBMITTED THAT GROUND NO.2 OF THE REVENUES AP PEAL WAS NOT DECIDED BY THE TRIBUNAL AND HENCE, EITHER THE WHOLE OF THE TRIBUNAL ORDER SHOULD BE RECALLED FOR AFRESH DECISION AND EVEN IF NOT, TH EN AT LEAST GROUND NO.2 OF THE REVENUES APPEAL SHOULD BE DECIDED AFRESH. 3. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. D.R . OF THE REVENUE THAT NO REASONABLE CAUSE COULD BE SHOWN BY THE ASSE SSEE FOR NON APPEARING ON THE APPOINTED DATE OF HEARING AND MERE LY AN ORAL ADVICE OF A C.A. THAT HE TRIBUNAL WILL NOT TAKE UP THE MATER FO R HEARING, IS NOT A VALID BASIS OR REASONABLE CAUSE FOR NON ATTENDANCE. REGAR DING GROUND NO.2, IT WAS SUBMITTED THAT WHEN THE TRIBUNAL HAS RESTORED T HE ASSESSMENT ORDER AND REVERSED THE ORDER OF CIT(A), ALL THE GROUND OF THE REVENUE STAND DECIDED AND HENCE, THERE IS NO MISTAKE IN THE TRIBU NAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE MATERIAL ON RECORD AND THE TRIBUNAL ORDER. WE FIND THAT IT IS NOTED BY THE TRIBUNAL IN PARA 3 THAT NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF SERVICE OF NOTICE AS PER THE ACKNOWLEDGMENT AVAI LABLE ON RECORD. THE APPEAL WAS FILED BY THE REVENUE ON 29.04.2010 AND T HEREAFTER, THE SAME WAS FIXED FOR HEARING FOR THE FIRST TIME ON 31.12.2 010 AND ON THAT DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE HEA RING WAS ADJOURNED TO 18.03.2011 AND THE NOTICE WAS ISSUED TO THE ASSESSE E BY RPAD. ON 18.03.2011, THE BENCH DID NOT FUNCTION AND, THEREFO RE, THE HEARING WAS ADJOURNED TO THE NEXT DATE OF HEARING FIXED ON 29.0 4.2011. FOR THIS DATE OF HEARING, NOTICE WAS DULY SENT TO THE ASSESSEE BY RPAD AND THE SAME WAS DULY SERVED ON THE ASSESSEE AS PER THE ACKNOWLE DGMENT AVAILABLE ON RECORD AND THE ASSESSEE HAS ALSO NOT DISPUTED THE F ACT OF SERVICE OF NOTICE. M.A.NO. 136 /AHD/2011 3 UNDER THESE FACTS, WE DO NOT FIND ANY VALID REASON FOR NON ATTENDANCE OF THE ASSESSEE ON THE DATE OF HEARING FIXED BY THE TR IBUNAL. REGARDING THE CONTENTION OF THE ASSESSEE IN THE MISCELLANEOUS APP LICATION THAT HE WAS ADVISED BY A C.A. BASED AT BARODA THAT THE TRIBUNAL WILL NOT TAKE ANY APPEAL FILED IN 2010 FOR HEARING AND THE SAME WILL BE ADJOURNED SINE DIE, THIS ARGUMENT IS NOT SUPPORTED BY ANY LETTER OR AFF IDAVIT OF THE CONCERNED C.A. AND MOREOVER, FOR THE FIRST TIME, THE APPEAL W AS FIXED FOR HEARING ON 31.12.2010 AND NOTICE OF HEARING FOR THIS DATE OF H EARING WAS ALSO DULY SERVED ON THE ASSESSEE AS PER THE ACKNOWLEDGMENT AV AILABLE ON RECORD. NOTICE FOR THE 2 ND DATE OF HEARING FIXED ON 18.03.2011 WAS ALSO DULY SERVED ON THE ASSESSEE AS PER THE ACKNOWLEDGMENT AV AILABLE ON RECORD AND NOTICE OF HEARING FOR THE DATE OF HEARING FIXED ON 29.04.2011 IS THE 3 RD NOTICE OF HEARING WITHIN A PERIOD OF 6 MONTHS AND I N THE LIGHT OF THIS, IT IS NOT ACCEPTABLE THAT THE ASSESSEE WAS ADVISED BY C.A . THAT THE TRIBUNAL WILL NOT TAKE UP THE APPEAL FILED IN THE YEAR 2010 FOR H EARING AND WILL SEND NOTICE AFTER NOTICE. IN THE ABSENCE OF ANY REASONA BLE CAUSE FOR NON ATTENDANCE ON TWO DATES OF HEARING I.E. 31.12.2010 AND 29.04.2011, WE FEEL THAT RULE 25 OF THE TRIBUNAL RULES 1963 IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE AND, THEREFORE, THERE IS NO RE ASON FOR RECALLING OF THIS TRIBUNAL ORDER. 5. REGARDING THE 2 ND CONTENTION RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION THAT GROUND NO.2 OF THE R EVENUES APPEAL WAS NOT DECIDED BY THE TRIBUNAL, WE FIND THAT THIS CLAI M IS UNFOUNDED BECAUSE IN THE IMPUGNED TRIBUNAL ORDER, THE TRIBUNAL HAS RE VERSED THE ORDER OF LD. CIT(A) AND RESTORED BACK THE ORDER OF THE A.O. AND HENCE, ALL THE GROUNDS OF THE REVENUES APPEAL STAND DECIDED. MOREOVER, W E ALSO FIND THAT IN THE GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE LD. CIT(A), THERE IS NO SUCH GROUND RAISED BY THE ASSESSEE THAT DEDUCTION S HOULD BE ALLOWED ON ACCOUNT OF INTEREST AND REMUNERATION PAID TO THE PA RTNERS BUT THIS DIRECTION M.A.NO. 136 /AHD/2011 4 WAS GIVEN BY THE LD. CIT(A) IN HIS ORDER THAT THE A SSESSEE SHALL BE ALLOWED DEDUCTION ON ACCOUNT OF INTEREST AND REMUNE RATION TO THE PARTNERS WITHOUT GIVING ANY FINDING AS TO WHETHER SUCH PAYME NTS OF INTEREST AND REMUNERATION IS PROVIDED IN THE PARTNERSHIP DEED AN D WHETHER ANY SUCH INTEREST AND REMUNERATION HAS BEEN PAID BY THE ASSE SSEE AND HOW SUCH PAYMENT OF INTEREST TO THE PARTNERS IS LINKED WITH INCREASE IN THE ASSESSEES INCOME BECAUSE INTEREST TO PARTNERS IS P AYABLE ON THE CAPITAL OF THE PARTNER AS PER THE PRESCRIBED RATE OF INTEREST IN THE PARTNERSHIP DEED SUBJECT TO CEILING OF 12% INTEREST PER ANNUM. REMU NERATION TO PARTNERS IS DEPENDENT ON THE QUANTUM OF INCOME OF THE ASSESSEE BUT FOR THIS ALSO, ONLY THE BOOK PROFIT IS RELEVANT AND NOT THE TAXABL E PROFIT AND, THEREFORE, THE ALLOWABILITY OF REMUNERATION TO PARTNERS WILL N OT GO UP IN THIS CASE EVEN IF THE ASSESSED INCOME IS INCREASED AS COMPARE D TO THE BOOK PROFIT BECAUSE ALLOWABLE REMUNERATION TO PARTNERS IS TO BE CALCULATED ON THE BASIS OF BOOK PROFIT AND AS PER EXPLANATION (3) TO SECTION 40(B), BOOK PROFIT HAS BEEN DEFINED AS NET PROFIT SHOWN BY THE ASSESSEE IN THE P: & L ACCOUNT FOR THE RELEVANT PREVIOUS YEAR AND, THEREFO RE, NO EXTRA DEDUCTION IS ALLOWABLE ON ACCOUNT OF INTEREST/REMUNERATION TO PARTNERS ON THE BASIS OF INCREASE IN TAXABLE INCOME OF THE ASSESSEE FIRM AND HENCE, ON THIS ISSUE ALSO, THERE IS NO MISTAKE IN THE TRIBUNAL ORDER WHI CH CAN BE RECTIFIED U/S 254(2) OF THE ACT. 6. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP M.A.NO. 136 /AHD/2011 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 13/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14.12.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.19/12 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 21/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.21/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21/12/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..