M/s Kanpur Chemical Agency, Kanpur v. Asstt. Commissioner of Income Tax - (3), Kanpur

ITA 85/LKW/2014 | 2004-2005
Pronouncement Date: 19-11-2014 | Result: Allowed

Appeal Details

RSA Number 8523714 RSA 2014
Assessee PAN AAAFK8015D
Bench Lucknow
Appeal Number ITA 85/LKW/2014
Duration Of Justice 9 month(s) 1 day(s)
Appellant M/s Kanpur Chemical Agency, Kanpur
Respondent Asstt. Commissioner of Income Tax - (3), Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 19-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 19-11-2014
Date Of Final Hearing 10-11-2014
Next Hearing Date 10-11-2014
Assessment Year 2004-2005
Appeal Filed On 17-02-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI. A. K. GARODIA ACCOUNTANT MEMBER ITA NO.85/LKW/2014 ASSESSMENT YEAR:2004-05 M/S KANPUR CHEMICAL AGENCY 49/27 GENERAL GANJ KANPUR V. ACIT-3 KANPUR PAN/PAN:AAAFK8015D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAKESH GARG ADVOCATE RESPONDENT BY: SHRI. Y.P. SRIVASTAVA D.R. DATE OF HEARING: 10 11 2014 DATE OF PRONOUNCEMENT: 19 11 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) ON VARIOUS GROUNDS WHICH ARE AS UNDER:- 1. BECAUSE THE CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DECIDING THE APPEAL EX PARTE WITHOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 2. BECAUSE THE ASSESSEE APPELLANT WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE THE CIT (APPEALS) WAS NOT JUSTIFIED IN DECIDING THE APPEAL EX PARTE. 3. BECAUSE THE CIT (APPEALS) HAS FAILED TO APPRECIATE THE SUBMISSIONS FILED BEFORE HIM PURSUANT TO THE APPEAL FILED AND HAS THEREBY ERRED IN DECIDING THE APPEAL EX PARTE WITHOUT DECIDING THE DISPUTES ON MERITS. :- 2 -: 4. BECAUSE THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS.2 50 000/- ON ACCOUNT OF GROSS PROFIT RATE. 5. BECAUSE THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS.40 960/- CLAIMED AS REVENUE/BUSINESS LOSS. 6. BECAUSE THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE DISALLOWANCES MADE UNDER THE HEAD TELEPHONE EXPERISES (RS.57 837/-) CAR EXPENSES (RS.28 223/-) STAFF WELFARE EXPENSES (RS.6 673/-) CONVEYANCE EXPENSES (RS.25 366/-) MISCELLANEOUS EXPENSES (RS.11 357/-) AND BROKERAGE AND COMMISSIONER (RS.97 954/-) WHICH EXPENSES HAVING BEEN INCURRED FOR THE PURPOSE OF BUSINESS SHOULD OUGHT TO HAVE BEEN ALLOWED. 7. BECAUSE THE ACCOUNT BEING TAX AUDITED COMPLETE DETAILS HAVING BEEN FILED AND NO DISCREPANCY WAS POINTED OUT BOTH THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS) HAVE ERRED IN MAKING AND UPHOLDING THE DISALLOWANCES UNDER THE HEAD TELEPHONE EXPENSES (RS.57 837/-) CAR EXPENSES (RS.28 223/-) STAFF WELFARE EXPENSES (RS.6 673/-) CONVEYANCE EXPENSES (RS.25 366/-) MISCELLANEOUS EXPENSES (RS.11 357/-) AND BROKERAGE AND COMMISSIONER (RS.97 954/-). 8. BECAUSE THE CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS.5 291/- BEING AMOUNT DISALLOWED OUT OF TOTAL INTEREST PAID HOLDING THAT INTEREST WAS NOT CHARGED FROM M/S. DHRUV INDUSTRIAL COMPANY LTD. 9. BECAUSE THE CIT (APPEALS) HAS FAILED TO APPRECIATE THE FACT THAT TRANSACTIONS MADE THROUGH M/S. DHRUV INDUSTRIAL COMPANY LTD. BEING BUSINESS TRANSACTIONS THERE WAS NO OCCASION FOR CHARGING :- 3 -: OF INTEREST THE DISALLOWANCE IS CONTRARY TO FACT BAD IN LAW BE DELETED. 10. BECAUSE THE CIT (APPEALS) HAS FAILED TO APPRECIATE THAT THE FUNDS ON WHICH INTEREST HAS BEEN PAID HAVE ALL BEEN BORROWED FOR THE PURPOSE OF BUSINESS AND INTEREST HAVING BEEN PAID ON THE SAME THERE IS NO REASON TO DISALLOW THE INTEREST CLAIMED. 11. BECAUSE THE CIT (APPEALS) HAS ERRED IN NOT ALLOWING DEPRECIATION @ 40% ON VEHICLES USED IN THE BUSINESS OF HIRING AND THEREBY HAS RESTRICTED THE DEPRECIATION BY RS.57 415/-. 2. THIS APPEAL IS FILED LATE BY 617 DAYS FOR WHICH AN APPLICATION FOR CONDONATION OF DELAY WAS ALSO FILED ALONG WITH AN AFFIDAVIT STATING THEREIN THAT THE BUSINESS OF THE FIRM WAS CLOSED W.E.F. 31.3.2006 AND ON ITS CLOSURE THE ACCOUNTS WERE SETTLED AND THERE WAS NOBODY TO LOOK AFTER THE AFFAIRS OF THE FIRM. ASSESSMENT WAS COMPLETED ON 6.11.2006 AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A). THEREAFTER TWO SENIOR PARTNERS SHRI. B.P. BIRLA AND SHRI. GHANSHYAM DAS DALMIA BREATHED THEIR LAST IN SEPTEMBER 2009 AND JUNE 2011 RESPECTIVELY. SOON AFTER THEIR DEATH THE POSITION DETERIORATED FURTHER FOR THE REASON THAT THE SAID SENIOR PARTNERS WERE TAKEN CARE OF THE AFFAIRS OF THE FIRM AND IN THEIR ABSENCE NOBODY WAS THERE TO TAKE CARE. THEREFORE NO ONE COULD PURSUE THE APPEAL FILED BEFORE THE LD. CIT(A). THE ORDER OF THE LD. CIT(A) WAS SERVED UPON THE DEPONENT I.E. SHRI. HAUSLA PRASAD TIWARI BUT ON ACCOUNT OF HIS ENGAGEMENT WITH HIS OWN AFFAIRS HE FORGET TO APPRISE THE SAME TO THE ERSTWHILE PARTNERS OF THE FIRM. ONLY WHEN THE SHOW CAUSE NOTICE WAS SERVED ON THE DEPONENT THE DEPONENT INFORMED THE PARTNERS WHO THEN GOING THROUGH THE AFFAIRS FILED AN APPEAL BEFORE THE TRIBUNAL. IT WAS FURTHER CONTENDED THAT THE DELAY IN FILING THE APPEAL IS NOT INTENTIONAL BUT FOR THE AFORESAID REASONS. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT THE APPEAL DECIDED BY :- 4 -: THE LD. CIT(A) WAS ALSO EX-PARTE. THEREFORE IN THE INTEREST OF JUSTICE THE APPEAL BE ADMITTED AND THE MATTER BE RESTORED TO THE LD. CIT(A) FOR FRESH ADJUDICATION OF THE APPEAL ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. THE LD. D.R. HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 4. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE AFFIDAVITS FILED BY THE ASSESSEE WE FIND THAT THE APPEAL COULD NOT BE FILED DUE TO THE REASONS EXPLAINED IN THE AFFIDAVIT. SINCE THE ASSESSEE HAS A REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME WE CONDONE THE DELAY IN FILING OF THE APPEAL AND ADMIT THE SAME FOR HEARING. ON MERIT WE FIND THAT THE LD. CIT(A) HAS ADJUDICATED THE APPEAL EX-PARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS THE ASSESSEE COULD NOT PURSUE THE APPEAL BEFORE THE LD. CIT(A). THEREFORE IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE APPEAL AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH NOVEMBER 2014 JJ:1111 :- 5 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR