SHYAM AHUJA P. LTD, V. ITO WD 7,

MA 886/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 3797 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 31-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADESHI PRASAD
• Assessee Lawyers: HARISH MOTIWALA
• Keywords: Rectification of order
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH BEFORE SHRI D.K.AGARWAL, JM & SHRI T.R.SOOD, AM M.A.NO.886/MUM/2009 - A.Y 2003-04 [ARISING OUT OF I.T.A.NO.2151/M/2008] M/S SHYAM AHUJA LTD., SHREE NIKETAN SHIVSAGAR ESTATE, 33/34, A.B.ROAD, WORLI, MUMBAI 400 018 OAB BI,AAVCS 4675 F VS. THE INCOME TAX OFFICER (TECH.)-7, MUMBAI (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI HARISH MOTIWALA. REVENUE BY : SHRI ADESHI PRASAD. O R D E R PER T.R.SOOD, AM: THROUGH THIS MISCELLANEOUS APPLICATION, ASSESSEE H AS SOUGHT RECTIFICATION OF THE ERROR IN THE ORDER OF T HE TRIBUNAL DATED 25- 11-2009 IN I.T.A.NO.2151/MUM/2008 FOR THE A.Y 2003- 04 . 2. THE LD.COUNSEL OF THE ASSESSEE CARRIED US THROUG H THE CONTENTS OF THE MISCELLANEOUS APPLICATION AND POINTED OUT TH AT AN APPEAL WAS FILED AGAINST THE ORDER PASSED U/S.263 BY THE CIT A ND THE MATTER HAS BEEN FINALLY ADJUDICATED VIDE PARAS 8 AND 9 OF THE ORDER. HE FURTHER SUBMITTED THAT THE REVISION ORDER WAS PASSED BY THE CIT AGAINST TWO ITEMS, VIZ., [I] WRITING OFF OF SUNDRY BALANCES AMO UNTING TO RS.2,47,832/- AND [II] WRITING OFF OF ADVANCES AMOU NTING TO RS.12,97,991/-. HE SUBMITTED THAT THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE COMMISSIONER BY HOLDING THAT NO INQUIR Y WAS MADE BY THE AO AND NO DETAILS WERE SUBMITTED. HE INVITED OUR AT TENTION TO THE 2 ORDER OF THE TRIBUNAL AS WELL AS THE PAPER BOOK FIL ED DURING THE APPEAL HEARING. HE POINTED OUT THAT THE TRIBUNAL HAD EXTRA CTED THE LETTER WRITTEN TO THE AO ON FEBRUARY 24, 2006 AND HAD HELD THAT NO REASONS WERE GIVEN FOR WRITING OFF OF THE AMOUNTS. WHILE DO ING SO, THE TRIBUNAL HAS IGNORED THE ANNEXURES ATTACHED TO THIS LETTER, WHICH ARE PLACED AT PAGES 3 TO 64 OF THE PAPER BOOK. THESE ARE COPIES O F VARIOUS CORRESPONDENCES AND OTHER DETAILS AS TO WHY THESE A DVANCES WERE WRITTEN OFF. THIS CLEARLY SHOWS THAT AO WAS SATISFI ED AND THAT IS WHY HE HAD ALLOWED THIS ITEM. HE FURTHER POINTED OUT THAT BASICALLY ASSESSEE HAD ENTERED INTO A CONTRACT FOR SOURCING OF SOFTWAR E AND THE OTHER PARTY COULD NOT SUPPLY THE SOFTWARE TO THE SATISFAC TION OF THE ASSESSEE. THEREFORE, NO FURTHER PAYMENTS WERE MADE AND WHATEV ER ADVANCE WAS GIVEN WAS WRITTEN OFF, WAS LEGITIMATELY CLAIMED BY THE ASSESSEE. AO BEING SATISFIED ON THE BASIS OF THE CORRESPONDENCE HAS ALLOWED THE CLAIM. 3. AS FAR AS THE POINT REGARDING NON ENQUIRY IN RE SPECT OF WRITING OFF OF SUNDRY DEBIT BALANCES AMOUNTING TO RS.2,47,8 33/- IS CONCERNED, AGAIN THE TRIBUNAL HAS EXTRACTED THE LETTER ADDRESS ED TO THE AO ON SEPTEMBER 22, 2006 AT PARA-9 AND HELD THAT NO DETAI LS WERE FILED REGARDING WRITING OFF OF THE SUNDRY BALANCES. IN TH IS REGARD HE INVITED OUR ATTENTION TO PAGE-65 OF THE PAPER BOOK WHICH IS A COPY OF THE LETTER AND SUBMITTED THAT LIST OF SUNDRY BALANCES WAS FILE D, COPY OF WHICH IS PLACED AT PAGE-66 AND WAS MADE AN ENCLOSURE TO THE LETTER ADDRESSED TO THE AO. THEREFORE, ALL DETAILS WERE AVAILABLE BE FORE THE AO AND AFTER 3 EXAMINING THE SAME, HE HAS ALLOWED THE WRITE OFF OF THIS ITEM. HE AGAIN RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GABRIEL INDIA LTD. [203 ITR 108] WH EREIN IT WAS HELD THAT IT IS NOT NECESSARY TO MENTION ALL THE DETAILS IN THE ASSESSMENT ORDER. 4. ON THE OTHER HAND, THE LD.DR, SUBMITTED THAT THE TRIBUNAL HAS ALREADY ADJUDICATED THE ISSUE VIDE PARAS 8 AND 9 IN DETAIL AND EVEN VARIOUS CASE LAWS HAVE ALSO BEEN DISCUSSED AND, THE REFORE, THERE IS NO ERROR APPARENT FROM THE RECORD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. WE HAVE AGAIN GONE THROUGH THE PAPER BOOK. NO DOUBT, INADVE RTENTLY TRIBUNAL HAS NOT LOOKED AT THE ANNEXTURES IN THE ORIGINAL OR DER. WE HAVE NOW LOOKED INTO ALL THE ANNEXTURES ATTACHED WITH THE LE TTER DATED 24/2/2006 WHICH IS REGARDING THE WRITING OFF AN ADVANCE AMOUN TING TO RS.12,97,991/-. PAGES 3 TO 5 ARE COPIES SEEMS TO BE SUMMARY OF THE AGREEMENT ENTERED INTO BY THE ASSESSEE. AT PAGE-6 I S ONLY ADDRESS OF THE PARTY. PAGES 7 TO 16 ARE COPY OF THE AGREEMENT. PAGES 17 TO 21 ARE COPY OF INVOICES AS WELL AS ALL PERFORMA INVOIC ES. PAGES 22 TO 50 WHICH WERE NOT REFERRED TO DURING THE HEARING OF TH IS MISCELLANEOUS APPLICATION ARE NOT LEGIBLE AND NOTHING CAN BE MADE OUT OF THEM. PAGES 51 TO 57 SEEMS TO BE THE COPIES OF THE CORRES PONDENCE WHICH PERHAPS ARE EXTRACTS OF SOME E-MAIL AND AFTER CAREF UL PERUSAL, WE FIND THAT NOTHING CAN BE MADE OUT OF THEM. IT IS VERY DI FFICULT TO SAY THAT THESE LETTERS EXPLAIN THE REASON FOR WRITING OFF OF SUNDRY ADVANCES. 4 THERE IS NO FURTHER ENQUIRY BY THE AO IN THIS REGAR D. NOW, IF WE CANNOT MAKE ANYTHING OUT OF THIS PAPER BOOK, IT IS VERY DI FFICULT TO APPRECIATE THAT AO WAS FULLY SATISFIED REGARDING REASONS FOR W RITING OFF OF THESE ADVANCES. SINCE NO MATERIAL IS AVAILABLE SHOWING TH AT ANY ENQUIRY WAS MADE APART FROM ASKING THE REASONS, WE ARE OF THE V IEW THAT THE AO HAS FAILED TO CONDUCT AN ENQUIRY REQUIRED OF A PRUD ENT PERSON. THUS, WE ARE OF THE VIEW THAT THE ORIGINAL FINDINGS GIVEN BY US ARE CORRECT THAT NO ENQUIRY WAS MADE REGARDING WRITING OFF OF T HESE ADVANCES. 6. AS FAR AS DETAILS REGARDING WRITING OFF OF SUNDR Y ADVANCE IS CONCERNED, AGAIN WE WOULD LIKE TO POINT OUT THAT TH E TRIBUNAL HAS GIVEN A FINDING IN PARA-9 WHICH IS AS UNDER- 9. PERUSAL OF THE ABOVE LETTER SHOWS THAT NO DETAI LS WHATSOEVER WERE FILED IN RESPONSE TO RECTIFICATION NOTICE AND IT WAS MERELY STATED THAT THE DETAILS HAVE BEEN FILED AT THE TIME OF ASS ESSMENT. IN ANY CASE, EVERY ORDER IS A SEPARATE ORDER AND THE LEARN ED CIT(A) WAS SEIZED WITH THE ASSESSMENT ORDER. FURTHER NO RECTI FICATION ORDER WAS EVER PASSED. THEREFORE, THE REPLY DATED 22.9.2006 HAS NO RELEVANCE TO THE ORDER PASSED UNDER SECTION 263 OF THE ACT. FIRST OF ALL, PAGE 66 WHICH WAS SHOWN TO US, CONTAI NS ONLY THE NAME OF THE PARTIES TO WHOM SUCH ADVANCES WERE GIVEN AND IT CANNOT BE SAID THAT REASON FOR WRITING OFF OF THE SAME WERE ALSO G IVEN. IN ANY CASE, AS POINTED OUT BY THE TRIBUNAL EARLIER, THAT THIS LETT ER WAS FILED ONLY DURING THE RECTIFICATION PROCEEDINGS AND IS NOT RELEVANT W HILE ADJUDICATING THE ORDER PASSED U/S.263 BY THE CIT AGAINST THE ASSESSM ENT ORDER, WE DO NOT KNOW IN WHAT RESPECT THE RECTIFICATION PROCEEDI NG WAS INITIATED AND IN ANY CASE NO RECTIFICATION ORDER HAS BEEN PASSED AND THIS FACT WAS CONSIDERED EARLIER ALSO. 5 7. AS FAR AS THE CASE LAWS ARE CONCERNED, THE SAME HAS ALREADY BEEN DEALT WITH BY THE TRIBUNAL IN PARAS 10 AND 11 OF ITS ORIGINAL ORDER AND, THEREFORE, IT CANNOT BE SAID THAT CASE LAWS WE RE NOT CONSIDERED. IN THESE CIRCUMSTANCES , WE FIND NO ERROR IN THE OR DER OF THE TRIBUNAL WHICH NEEDS ANY RECTIFICATION. 8. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF JUNE, 2010. SD/- SD/- (D.K.AGARWAL) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 18 TH JUNE, 2010. P/-* COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI. 6