ITO 6(1)(4), V. BUTTON RUS (INDIA ) P.LTD,

MA 265/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2374 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2002-2003
• Appeal Filed On: 30-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend
• Section: 143(3)

Judgement Text

S J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE S/SHRI H.L. KARWA, HONBLE PRESIDENT AND N.K . BILLAIYA, AM .. , . . , / MA NO. 265 /MUM/2014 ARISING OUT OF ITA NO.382/MUM/2011 ( / ASSESSMENT YEAR : 2002-03) INCOME TAX OFFICER 6(1)(4), ROOM NO. 563, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / VS. M/S BUTTON RUS (INDIA) PVT. LTD., PARDA MANSION, 3 RD FLOOR, BHAJIPALA LANE, MUMBAI 400 003. $ % ./ PAN : AAACB1573A ( &$' / APPELLANT ) .. ( ()$' / RESPONDENT ) A PPLICANT BY SHRI TUSHAR DHAWAL SINGH R E SPONDENT BY : SHRI VIJAY MEHTA * + , -./ / DATE OF HEARING : 22-8-2014 0123 , -./ / DATE OF PRONOUNCEMENT : 22-08-2014 [ 4 / O R D E R PER N.K. BILLAIYA, A.M . : . . , THIS MISC. APPLICATION BY THE DEPARTMENT IS DIRECTE D AGAINST THE ORDER OF THE TRIBUNAL IN ITA NO. 382/MUM/2011 DATED 24-10 -2013. 2. IT IS THE CLAIM OF THE REVENUE THAT THE TRIBUNAL HAS WRONGLY INTERPRETED THE DECISION GIVEN BY THE LD. CIT(A) ON THE ADDITIO NAL GROUND RAISED BY THE ASSESSEE. IT IS THE SAY OF THE REVENUE THAT THE TRI BUNAL PRESUMED THAT ASSESSEES GROUND WAS DISMISSED, THEREFORE, THERE W AS NO CAUSE FOR THE REVENUE TO BE IN APPEAL. ACCORDING TO THE REVENUE, THE TRIBUNAL HAS NOT DEALT MA 265 /MUM/14 2 WITH THE ISSUE OF RELIEF GIVEN ON ACCOUNT OF SUNDRY EXPENSES WRITTEN OFF AMOUNTING TO RS. 33,06,576/- IN MERIT. 3. BEFORE GOING FURTHER, LET US UNDERSTAND THE FACT S OF THE CASE. IN THE FIRST ROUND OF LITIGATION, THE ASSESSMENT WAS COMPL ETED U/S 143(3) OF THE INCOME TAX ACT, 1961 VIDE AN ORDER DATED 21-03-2005 . THE A.O. DID NOT ACCEPT THE BUSINESS OF THE ASSESSEE AND ACCORDINGLY HE DISALLOWED THE EXPENSES AMOUNTING TO RS. 33,94,325/- ALONG WITH OT HER ADDITIONS. THE MATTER TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNA L IN ITA NO. 173/MUM2006 AND ITA NO. 39/MUM/2006 VIDE ITS ORDER DATED 22-8-2008 SET ASIDE THE ISSUE RELATING TO THE DISALLOWANCE OF RS. 33,94,325/- TO THE FILE OF THE A.O. FOR CONSIDERATION AFRESH OF THE ISSUE AS T O WHETHER THERE WAS PERMANENT CLOSURE OF THE BUSINESS OF THE ASSESSEE O R THERE WAS A TEMPORARY LULL. IN THE SECOND ROUND OF ASSESSMENT, THE A.O. ONCE AGAIN DID NOT ACCEPT THE BUSINESS OF THE ASSESSEE AND DISALLOWED THE CLA IM OF EXPENSES OF RS. 33,94,325/-. THE ASSESSEE CARRIED THE MATTER BEFOR E THE LD. CIT(A) AND THE LD. CIT(A) VIDE HIS ORDER DATED 14-10-2010 AT PARA 6 HE LD THAT THE ACTION OF THE A.O. OF DISALLOWING THE EXPENSES ON THE GROUND OF C ESSATION OF BUSINESS DOES NOT APPEAR TO BE JUSTIFIED, THEREFORE, THE DISALLOW ANCE DESERVES TO BE DELETED. THE REVENUE CAME UP BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND OF APPEAL :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON ACCOUNT OF A) A SUNDRY BALANCES WRITTEN OFF, B) UNE XPLAINED LIABILITY, C) DEEMED DIVIDEND U/S 2(22)(E) EVEN THOUGH THE ASSESS EE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY. THE TRIBUNAL DISPOSED THE GROUND VIDE ITS ORDER DAT ED 24-10-2013 IN ITA NO. 382/MUM/2011. 4. WITH THE ABOVE STATED FACTS, WE FAIL TO UNDERSTA ND THE CAUSE FOR THIS MISC. APPLICATION WHEN THE REVENUE HAS NOT FILED AN Y APPEAL AGAINST THE DELETION OF THE EXPENSES, THEN HOW CAN BY THIS MISC . APPLICATION THE REVENUE MA 265 /MUM/14 3 CAN RAISE ALTOGETHER A DIFFERENT GROUND, WHICH WAS NOT TAKEN IN THE APPEAL. IT APPEARS THAT NEITHER THE A.O. NOR THE APPROVING AUT HORITY HAS APPLIED THEIR MIND BEFORE FILING THIS MISC. APPLICATION. WE DO NO T FIND ANY MERIT IN THIS FRIVOLOUS MISC. APPLICATION FILED BY THE REVENUE WH ICH IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE MISC. APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND AUGUST, 2014. 4 , 0123 * 5 6 7%8 22-8-2014 1 , 9+ SD/- SD/- (H.L. KARWA) (N.K. BILLAIYA ) /PRESIDENT ACCOUNTANT MEMBER * %+ MUMBAI ; 7% DATED 22-8-2014 [ .B../ R.K. , SR. PS !' # $%&' (!'% / COPY OF THE ORDER FORWARDED TO : 1. &$' / THE APPELLANT 2. ()$' / THE RESPONDENT. 3. . * C- ( &) / THE CIT(A) - CONCERNED, MUMBAI 4. . * C- / CIT- CONCERNED, MUMBAI 5. F9 (B-BG , . &/ G.3 , * %+ / DR, ITAT, MUMBAI C BENCH 6. 9H I+ / GUARD FILE. !' ) / BY ORDER, )&- (B- //TRUE COPY// */)+ , ( DY./ASSTT. REGISTRAR) , * %+ / ITAT, MUMBAI