ITO, New Delhi v. M/s. Crown Cans (India) Pvt. Ltd., New Delhi

ITA NO. 4282/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 4282/DEL/2010 A.Y. : 2003-04 INCOME TAX OFFICER WARD 3(4) NEW DELHI VS. M/S CROWN CANS (INDIA) PVT. LTD. C-14/2 WAZIRPUR INDUSTRIAL AREA NEW DELHI (PAN/GIR NO. : AAACC0703F) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : NONE DEPARTMENT BY : SH. H.K. LAL SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 23/9/2 010 PERTAINING TO ASSESSMENT YEAR 2003-04. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITIONS ON ACCOUNT OF DIRECTORS SALARY; ADDITION TO SHARE CAP ITAL; NOTIONAL INTEREST; AND EXPENSES PAYABLE SINCE FRESH EVIDENCE FILED BY THE ASSESSEE WAS ADMITTED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) W ITHOUT REFERRING THE SAME TO THE ASSESSING OFFICER IN CON TRAVENTION OF THE PROVISIONS OF SUB RULE (3) OF RULE 46A. 3. IN THIS CASE ASSESSEE HAD NOT PROPERLY COOPERAT ED WITH THE ASSESSING OFFICER. ASSESSING OFFICER HAS ISSUE D SEVERAL NOTICES AND QUESTIONNAIRE BUT THE SAME REMAINED UNATTENDED AND NOT FULLY ITA NO. 4282/DEL/2010 2 COMPLIED. THE ASSESSING OFFICER NOTED THE VARIOUS CLAIMS OF THE ASSESSEE PERTAINING TO THE EXPENDITURE AND ASSETS A ND CAME TO CAME TO CONCLUSION THAT FOLLOWING ADDITIONS WERE REQUIRE D (I) ON ACCOUNT DIRECTORS SALARY DISALLOWED ` 96 000/- ; (II) ON ACC OUNT OF SHARE CAPITAL ` 55 000/-; (III) ON ACCOUNT OF INTEREST EARNED ` 583 645/-; (IV) ON ACCOUNT OF CESSATION OF LIABILITIES ` 122076/- AND (V) ON A CCOUNT OF EXPENSES PAYABLE DISALLOWED ` 27350/-. 4. ASSESSEE APPEALED AGAINST THE ABOVE ORDER BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISSIO NER OF INCOME TAX (APPEALS) GRANTED SUBSTANTIAL RELIEF TO THE ASS ESSEE. AT THE OUTSET LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT SH RI NAVEEN GUPTA DIRECTOR OF THE COMPANY FILED AN APPLICATION U NDER RULE 46A STATING THE FACT THAT DUE TO THE SUDDEN DEMISE OF H IS FATHER SHRI RS GUPTA AND HIS MOTHER SMT. SANTOSH GUPTA WAS HAVING S ERIOUS HEALTH PROBLEMS AND WAS ALSO ADMITTED AND OPERATED IN HOSPI TAL HE COULD NOT ATTEND AND FILE THE DOCUMENTARY EVIDENCE AT THE TIME OF HEARING OF THE CASE AND REQUESTED TO CONSIDER THE DOCUMENTS. LD. C OMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT KEEPING THE FAMIL Y PROBLEMS THE SAME IS ACCEPTED AND DOCUMENTARY EVIDENCE ARE CONS IDERED. THEREAFTER LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO ADJUDICATE THE ISSUE AND GRANTED SUBSTANTIAL RELIEF. IN THIS REGARD REVENUE IS AGGRIEVED THAT THERE IS CONTRAVENTION OF PROVISIONS OF SUB RULE (3) OF RULE 46A. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER UPON CAREFUL CONSIDERATION WE ARE OF THE OPINION THAT THE MATTER CAN BE DISPOSED OF ITA NO. 4282/DEL/2010 3 BY PERUSING THE RECORDS AND HEARING THE LD. DEPARTM ENTAL REPRESENTATIVE. 6. HERE WE CAN GAINFULLY REFER THE PROVISIONS OF RU LE 46A(3) THE SAME READS AS UNDER:- THE DEPUTY COMMISSIONER (APPEALS) OR THE COMMISSIONE R (APPEALS) AS THE CASE MAY BE SHALL NOT TAKE INTO AC COUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE ASS ESSING OFFICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY ( A ) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EX AMINE THE WITNESS PRODUCED BY THE APPELLANT OR ( B ) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNES S IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLAN T. 7. IN THIS CASE BY ASSESSEES OWN ADMISSION THE NE CESSARY DOCUMENTS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE SAME WERE SUBMITTED BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) FOR THE FIRST TIME. ASSESSING OFFICER WAS NOT GIVEN AN OPPORTUNITY TO GO THROUGH THE SAME. UNDER THE CIRCUMSTANCES THERE I S CLEAR CUT VIOLATION OF RULE 46A(3). UNDER THE CIRCUMSTANCES IN OUR CONSIDERED OPINION THE MATTER NEEDS TO BE REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH IN LIGHT OF THE ADDITIONAL EVIDENCES AND SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY THE ISSUE ST ANDS REMITTED TO THE ITA NO. 4282/DEL/2010 4 FILES OF THE ASSESSING OFFICER FOR DE NOVO CONSIDE RATION. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPO RTUNITY OF BEING HEARD. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/02/2011. SD/- SD/- [I.P. BANSAL [I.P. BANSAL [I.P. BANSAL [I.P. BANSAL] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 11/02/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES