M/s. MILLENIUM CARIBONUM LTD., MUMBAI v. ITO - 8(2)-3, MUMBAI

ITA 799/MUM/2008 | 2002-2003
Pronouncement Date: 15-12-2010 | Result: Partly Allowed

Appeal Details

RSA Number 79919914 RSA 2008
Bench Mumbai
Appeal Number ITA 799/MUM/2008
Duration Of Justice 2 year(s) 10 month(s) 8 day(s)
Appellant M/s. MILLENIUM CARIBONUM LTD., MUMBAI
Respondent ITO - 8(2)-3, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 15-12-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 15-12-2010
Date Of Final Hearing 07-12-2010
Next Hearing Date 07-12-2010
Assessment Year 2002-2003
Appeal Filed On 06-02-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SINGH (AM) ITA NO.799/MUM/2008 ASSESSMENT YEAR : 2002-03 MILLENIUM CARIBONUM LIMITED BASEMENT COMMERCIAL UNION HOUSE 9 WALLACE STREET MUMBAI-400 001. ..( APPELLANT ) P.A. NO. (AABCM 3970 B) VS. INCOME TAX OFFICER-8(2)-3 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ..( RESPONDENT ) APPELLANT BY : SHRI PRAMOD RASAM RESPONDENT BY : SHRI HA RI GOVIND SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 29.11.2007 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2002-03. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN CARBON PAPER ETC. FILED RETURN OF INCOME DECLARING TOTAL INCOME OF R S. NIL. HOWEVER THE ASSESSMENT WAS COMPLETED DETERMINING TOTAL INCOME AT RS.17 48 70 830/- INCLUDING LONG TERM CAPITAL GAIN WI TH INDEXATION OF RS.17 48 46 361/- VIDE ORDER DATED 23.3.2005 PASSED U/S.143(3) OF THE INCOME TAX ACT 1961 (THE ACT). WHILE MAKING THE ASSESSMENT THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDING U/ S.271(1)(C) OF ITA NO.799/M/08 A.Y:02-03 2 THE ACT. ON BEING ASKED AS TO WHY PENALTY U/S.271(1)( C) SHOULD NOT BE IMPOSED THE ASSESSEE COMPANY VIDE LETTER DATED 26.3 .2007 STATED AS UNDER (PARA-7 OF PENALTY ORDER):- A) AN APPEAL HAS BEEN FILED IN THE ITAT AGAINST THE ORDER OF CIT(A) CONFIRMING THE ASSESSMENT ORDER FOR THE RELEVANT ASSESSMENT YEAR . B) THERE HAS BEEN NO CONCEALMENT OR FILING OF INACCURATE PARTICULARS. THE P&L A/C. DISCLOSES PROFIT ON SALE OF L AND AMOUNTING TO RS .17 48 90 000/- AND ALSO THE AMOUNT WRITTEN OFF AMOUNTING TO RS.17 46 14 727/-. C) THE CIT(A) HAS FOLLOWED VARIOUS COURT JUDGMENTS FOR DISALLOWING THE BUSINESS LOSS. MERE DISALLOWANCE OF EXPENSE/LOSS CANNOT BE TREATED AS CONCEALMENT OR FILING INACCURATE PARTICULARS OF INCOME. D) TILL DATE THE ASSESSEE HAS NOT RECEIVED A SUM OF RS.17 46 14 727/- (RS.4.73 CRORES FROM M/S. TRIAD CONSTRUCTION AND RS.12.73 CRORES FROM M/S. G K A K RATHI HUF) HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES SUBMISSION. HE OBSERVED THAT THE MAIN ADDITION MADE TO THE RETURNED INCOME WAS ON ACCOUNT OF DISALLOWANCE OF RS.17 46 14 727/- CLAIMED AS BUSINESS LOSS DUE TO WRITE-OFF OF DEBTS OR AMOUNT DUE AS IRRECOVERABLE. HE FURTHER OBSERVED THAT IT HAS BEEN ESTABLISHED THAT THE ASSESSEE ALONG WITH M/S. TRIAD CONSTRUCTION AND M/ S. G.K.A.K. RATHI HUF TOGETHER FORM A GROUP. THEREFORE IT HARDLY MATTERS WHETHE R THE SAID SUM OF RS.17 46 14 727/- IS STILL SHOWN AS OUTSTANDING IN THE ASSESSEE'S BOOKS OF A/CS. BESIDES IT HAS ALSO BEEN ESTABLISHED THE SO CALLE D DEBTORS HAS PASSED JOURNAL ENTRIES (V) DEBITING THE ASSESSEE'S ACCOUNT AND CR EDITING OTHER GROUP ENTITIES. THUS IN EFFECT THERE IS ONLY CHANGE IN THE NAME OF THE DEBTORS. ACCORDING TO THE ASSESSING OFFICER IT IS CLEARLY ESTABLISHED THAT THE ASSESSEE HA S UNDERSTATED THE INCOME AND FILED INACCURATE PARTICULARS THEREBY CLEARLY ATTRACTING THE PROVISIONS OF SEC.271(1)(C) OF THE ACT AND ITA NO.799/M/08 A.Y:02-03 3 ACCORDINGLY HE IMPOSED THE PENALTY OF RS.3 56 21 404/- VIDE ORDER DT.28.3.2007 PASSED U/S.271(1)(C) OF THE ACT. 3. ON APPEAL BEFORE THE LD. CIT(A) THE LD. CIT(A) ISSUED FIRST NOTICE OF HEARING ON 22.10.2007 AT THE REGISTERED OFF ICE OF ASSESSEE WHICH WAS RETURNED UNSERVED. THEREAFTER ANOTHER NOTI CE WAS ISSUED ON 13.11.2007 FIXING THE HEARING ON 26.11.2007. ON THIS DAY NEITHER THE ASSESSEE NOR HIS AUTHORISED REPRESENTATIVE OF THE ASSESSE E APPEARED THEREFORE IN THE ABSENCE OF ANY COMPLIANCE THE LD. CIT(A) OBSERVED THAT THE ASSESSEE IS NOT KEEN TO PURSUE THE MATTE R IN APPEAL. THE LD. CIT(A) WHILE RELYING ON THE APPELLATE ORD ER IN THE QUANTUM APPEAL IN THE ASSESSEE'S OWN CASE WHEREIN THE LD. CIT(A) HAS DISMISSED THE ASSESSEE'S APPEAL CONFIRMED THE PENALTY IMPOSE D BY THE ASSESSING OFFICER. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PEN ALTY OF RS.3 56 21 404/- U/S.271 (1)(C) OF THE INCOME TAX A CT 1961. IT IS RESPECTFULLY SUBMITTED THAT DISALLOWAN CE OF EXPENSES CAN NOT BE TREATED AS CONCEALMENT OF INCOM E. 2. THE LD. CIT(A) HAS NOT GIVEN ANY OPPORTUNITY TO THE APPELLANT. 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT SINCE THE ASSESSEE HAS NOT RECEIVED ANY NOTICE OF DATE OF HEARING THEREFORE IN THE INTEREST OF JUSTICE THE MATTER MAY B E SET ASIDE TO THE FILE OF THE LD. CIT(A) . ITA NO.799/M/08 A.Y:02-03 4 6. ON THE OTHER HAND THE LD. DR WHILE RELYING ON TH E ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF THE ISSUE IS SET ASIDE TO THE FILE OF THE LD. CIT(A). 7. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THA T THE FACTS ARE NOT IN DISPUTE. IN THE ABSENCE OF ANY MATERIAL TO SHOW THA T THE NOTICE OF HEARING OF THE APPEAL BEFORE THE LD. CIT(A) WAS SERVE D UPON THE ASSESSEE WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTI CE THE ASSESSEE MAY BE ALLOWED ONE MORE OPPORTUNITY TO BE HEARD BEF ORE THE LD. CIT(A) AND ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WHO SHA LL DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE A SSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.12.2010. SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 15.12.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.