M/s Fortune Buildwell Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 3683/DEL/2011 | 2006-2007
Pronouncement Date: 30-09-2011 | Result: Allowed

Appeal Details

RSA Number 368320114 RSA 2011
Assessee PAN AAACF8477B
Bench Delhi
Appeal Number ITA 3683/DEL/2011
Duration Of Justice 1 month(s) 29 day(s)
Appellant M/s Fortune Buildwell Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 30-09-2011
Assessment Year 2006-2007
Appeal Filed On 01-08-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'D' BEFORE SHRI C.L.SETHI JM & SHRI A N PAHUJA AM BEFORE SHRI C.L.SETHI JM & SHRI A N PAHUJA AM BEFORE SHRI C.L.SETHI JM & SHRI A N PAHUJA AM BEFORE SHRI C.L.SETHI JM & SHRI A N PAHUJA AM ITA NO.3683/DEL/2011 (ASSESSMENT YEAR:-2006-07) M/S KABIR COMMODITIES ZONE PVT. LTD. (FORMERLY KNOWN AS FORTUNE BUILDWELL PVT. LTD.) 12 RING ROAD LAJPAT NAGAR NEW DELHI-24 V/S INCOME TAX OFFICER WARD 11 (3) NEW DELHI PAN: AAACF 8477 B AAACF 8477 B AAACF 8477 B AAACF 8477 B [APPELLANT] [RESPONDENT] ASSESSEE BY :- MRS. MEGHNA DC AR REVENUE BY:- MS.Y KAKKAR DR DATE OF HEARING 29-09-2011 DATE OF PRONOUNCEMENT 30-09-2011 O R D O R D O R D O R D E R E R E R E R A N PAHUJA: A N PAHUJA: A N PAHUJA: A N PAHUJA: THIS APPEAL FILED ON 1.8.2011 BY THE AS SESSEE AGAINST AN ORDER DATED 27-01-2010 OF THE LD. CIT(AP PEALS)- XIII NEW DELHI FOR THE ASSESSMENT YEAR 2006-07 R AISES THE FOLLOWING GROUNDS:- 1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE ORDER PASSED BY THE LEARNED CIT(A)-XIII IS BAD IN L AW AND ILLEGAL IN NATURE. 2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THAT T HERE ARE NO REASON TO INTERFERE WITH THE DECISION OF ASS ESSING OFFICER AND DISMISSING THE APPEAL AND THEREBY UPHOLDING: A) THE INTEREST INCOME OF THE ASSESSEE AMOUNTING TO `1 75 500/- AS INCOME FROM OTHER SOURCES. B) DISALLOWING THE EXPENSES OF `14 06 510/- WHICH WERE NOT CLAIMED BY THE ASSESSEE AS ALLOWABLE EXPENSES IN THE RETURN OF INCOME FILED BY IT AFTER OFFSETTING THE INTEREST INCOME. ITA NO.3683 /DEL/2011 2 2 3 THE APPELLANT CRAVES LEAVE FOR ADDITION MODIFICATI ON ALTERATION AMENDMENT OF ANY OF THE APPEAL. 2. ADVERTING FIRST TO GROUND NO.2 IN THE APPEAL FA CTS IN BRIEF ARE THAT RELEVANT ORDERS ARE THAT THE E-RETURN DECLARED NIL INCOME FILED ON 16 TH JANUARY 2007 BY THE ASSESSEE DEALING IN REAL EST ATE AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT 1961 (H EREINAFTER REFERRED TO AS THE ACT) WAS SELECTED FOR SCRUTINY WITH TH E SERVICE OF A NOTICE U/S 143(2) OF THE ACT . DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE ASSESSING OFFICER (A.O. IN SHORT) NOTICED THAT THE ASSESSEEE COMPANY WAS AT PRE-OPERATIVE STAGES AND DID NOT COM MENCE ANY BUSINESS IN THE YEAR UNDER CONSIDERATION WHILE IT R EFLECTED INTEREST INCOME OF `1 75 500/- WITH THE INVESTMENT OF SURPLU S FUNDS. TO A QUERY BY THE AO THE ASSESSEE REPLIED THAT THE ASSESSEE H AD SHOWN INTEREST INCOME OF `1 75 500/- AS AGAINST INTEREST PAYMENT O F ``8 86 347/- AND THIS INCOME SHOULD BE ASSESSED UNDER THE HEAD PROFI T AND GAINS OF THE BUSINESS AND PROFESSION. HOWEVER THE AO DID NOT A CCEPT THESE SUBMISSIONS THE ASSESSEE HAVING NOT COMMENCED ANY BUSINESS OPERATIONS AND ACCORDINGLY ASSESSED INTEREST INCOM E OF `1 75 500/- ON INVESTMENT OF SURPLUS FUNDS UNDER THE HEAD INCOME FROM OTHER SOURCES BESIDES DISALLOWING EXPENSES OF `14 06 510 /-. 3. ON APPEAL THE LEARNED CIT(A) FIXED THE APPEAL F OR HEARING ON 4 TH DECEMBER 2009 VIDE NOTICE DATED 19.11.2009. HOWEV ER THE SAID NOTICE WAS RETURNED WITH THE REMARKS LEFT WITHOUT ADDRESS BY THE POSTAL AUTHORITIES. ANOTHER NOTICE DATED 18 TH DECEMBER 2009 WAS ALSO RETURNED WITH THE SIMILAR REMARKS. IN THESE CIRC UMSTANCES ESPECIALLY WHEN THE ASSESSEE DID NOT INFORM CHANGE IN ADDRESS THE LEARNED CIT(A) UPHELD THE FINDINGS OF THE AO AS UNDER:- AFTER GOING THROUGH THE ASSESSMENT ORDER IT IS OB SERVED THAT NO EVIDENCE WAS FILED BY THE APPELLANT COMPANY WITH REGARD TO INTEREST RECEIVED AND EXPENDITURE INCURRE D DURING THE PROCEEDINGS U/S 143(3 BEFORE ASSESSING OFFICER. HENCE ASSESSING OFFICER MADE ADDITION OF RS.`1 75 500/- O N ITA NO.3683 /DEL/2011 3 3 ACCOUNT OF INTEREST RECEIVED AND DISALLOWED THE EXP ENSE OF RS. 14 06 510/-. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS BEEN PROVIDED VARIOUS OPPORTUNITIES THROUGH NOTICES BUT NEITHER ANYBODY ATTENDED NOR ANY SUBMISSION WAS MADE TO SUBSTANTIATE ITS CLAIM. IN THESE CIRCUMSTANCES IT IS OBSERVED THAT THE APPELLANT HAS NOTHING TO SAY AND THE POINTS WHICH WERE UNEXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE BASIS OF WHICH THE AD DITION WAS MADE IS STILL UNEXPLAINED HENCE I HAVE NO REAS ON TO INTERFERE WITH THE DECISION OF THE ASSESSING OFFICE R. HENCE THIS APPEAL IS DISMISSED. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF LEARNED CIT(A). THE LEARNED AR ON BEHA LF OF THE ASSESSEE CONTENDED THAT LEARNED CIT(A) WAS NOT JUSTIFIED IN DISPOSING OF THE APPEAL IN A SUMMARY MANNER WITHOUT ALLOWING SUFFICI ENT OPPORTUNITY TO THE ASSESSEE. TO A QUERY BY THE BENCH THE LD. AR D ID NOT REPLY AS TO WHETHER OR NOT CHANGED ADDRESS WAS INTIMATED TO THE LD. CIT(A).ON THE OTHER HAND THE LEARNED DR SUPPORTED THE FINDINGS O F THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY NONE OF THE NOTICE DATED 19 .11.2009 AND 18.12.2009 ISSUED BY THE LD. CIT(A) WERE SERVED UP ON THE ASSESSEE NOR THE ASSESSEE APPEARS TO HAVE INTIMATED CHANGE IN TH EIR ADDRESS TO THE LD. CIT(A). IN THESE CIRCUMSTANCES THE LEARNED CI T(A) DISMISSED THE APPEAL WITHOUT EVEN ANALYZING THE ISSUES OR RECORDI NG HIS SPECIFIC FINDINGS ON THE SAID ISSUES RAISED IN THE GROUNDS OF APPEAL BEFORE HIM . THIS APPROACH OF THE LEARNED CIT(A) IS NOT IN AC CORDANCE WITH LAW. A MERE GLANCE AT THE IMPUGNED ORDER REVEALS THAT THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSSLY VI OLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE NAMELY THAT EVERY JUDICIAL/QUASI-JUDICIAL BODY/AUTHORITY MUST P ASS REASONED ORDER WHICH SHOULD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO THE ISSUES/POINTS RAISED BEFORE IT. THE APPLICATION OF MIND TO THE MATERIAL FACTS AND T HE ITA NO.3683 /DEL/2011 4 4 ARGUMENTS SHOULD MANIFEST ITSELF IN THE ORDER. SECT ION 250(6) OF THE ACT MANDATES THAT THE ORDER OF THE C IT(A) WHILE DISPOSING OF THE APPEAL SHALL BE IN WRITING A ND SHALL STATE THE POINTS FOR DETERMINATION THE DECISION TH EREON AND THE REASONS FOR THE DECISION. THE REQUIREMENT OF RE CORDING OF REASONS AND COMMUNICATION THEREOF BY THE QUASI-JUDI CIAL AUTHORITIES HAS BEEN READ AS AN INTEGRAL PART OF TH E CONCEPT OF FAIR PROCEDURE AND IS AN IMPORTANT SAFEGUARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARIT Y CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSID ERATIONS AND MINIMIZES ARBITRARINESS IN THE DECISION-MAKING PROCESS. WE MAY REITERATE THAT A DECISION DOES NOT MERELY MEAN THE CONCLUSION. IT EMBRACES WITHIN ITS FOLD THE REASO NS FORMING BASIS FOR THE CONCLUSION.[MUKHTIAR SINGH VS. STATE OF PUNJAB (1995)1SCC 760(SC)]. AS IS APPARENT THE IMP UGNED ORDER SUFFERS FROM LACK OF REASONING AND IS NOT A SPEAKING ORDER. IN VIEW OF THE FOREGOING ESPECIALLY WHEN THE LD. CIT(A) HAVE NOT PASSED A SPEAKING ORDER ON VARIOUS ISSUES RAISED IN THE APPEAL BEFORE HIM WE CONSIDER IT FAI R AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A ) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE IS SUES RAISED IN THE GROUNDS RAISED BEFORE HIM BY THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPO RTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECI DING THE APPEAL THE LEARNED CIT(A) SHALL PASS A SPEAKING OR DER KEEPING IN MIND INTER ALIA THE MANDATE OF PROVISI ONS OF SEC. 250(6) OF THE ACT. WE MAY CLARIFY THAT AS UNDERTAKE N BY THE LD. AR APPEARING BEFORE US THE ASSESSEE SHALL SUO MOTU APPROACH THE LD. CIT(A) WITHIN THREE MONTHS OF THE RECEIPT OF THIS ORDER FOR EXPEDITIOUS DISPOSAL OF APPEAL AND S HALL NOT SEEK ANY ADJOURNMENT WITHOUT VALID REASONS. WITH TH ESE OBSERVATIONS GROUND NO. 2 IN THE APPEAL IS DISPO SED OF. ITA NO.3683 /DEL/2011 5 5 6. GROUND NO. 1 IN THE APPEAL BEING GENERAL IN NA TURE NOR ANY SUBMISSIONS HAVING BEEN MADE BEFORE US ON THIS GROUND DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN T ERMS OF THE RESIDUARY GROUND NO. 3 IN THE APPEAL ACCORDING LY THESE GROUNDS ARE DISMISSED. 7. IN THE RESULT APPEAL IS ALLOWED BUT FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (C.L.SETHI) (C.L.SETHI) (C.L.SETHI) (C.L.SETHI) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER (A N PAHUJA) (A N PAHUJA) (A N PAHUJA) (A N PAHUJA) ACCOUNTANT MEM ACCOUNTANT MEM ACCOUNTANT MEM ACCOUNTANT MEMBER BER BER BER NS COPY OF THE ORDER FORWARDED TO: 1. M/S KABIR COMMODITIES ZONE PVT. LTD. 12 RING R OAD LAJPAT NAGAR-IV NEW DELHI 2. INCOME TAX OFFICER WARD 11(3) NEW DELHI. 3. CIT CONCERNED 4. CIT(A)-XIII NEW DELHI 5. DR ITAT DELHI BENCH-D NEW DELHI 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT NEW DELHI