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Income Tax Appellate Tribunal - Ahmedabad

Cat Cosmetics & Healthcare Pvt. Ltd.,, ... vs The Income Tax Officer, Ward-1(3),, ... on 16 November, 2017

           आयकर अपील
य अ धकरण, अहमदाबाद  यायपीठ 'ए' अहमदाबाद ।
       IN THE INCOME TAX APPELLATE TRIBUNAL
               " A " BENCH, AHMEDABAD

   सव  ी    महावीर  साद,  या यक सद य एवं Ekuh'k cksjM, लेखा सद य के सम  ।
 BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER And
     SHRI, MANISH BORAD, ACCOUNTANT MEMBER

               आयकर अपील सं./I.T.A. No.1874/Ahd/2015
             (  नधा रण वष  / Assessment Year : 2011-12)
 Cat Cosmetics & Healthcare          बनाम/    Income Tax Officer
            Pvt. Ltd.                 Vs.         Ward - 1(3),
    B/505, Infinity Tower                         Ahmedabad.
       Corporate Road,
      Nr. Ramada Hotel
 Opp. Prahladnagar Garden,
            Satellite,
    Ahmedabad - 380 015
 थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AACCC 5955 D
      (अपीलाथ" /Appellant)          ..        ( #यथ" / Respondent)
     अपीलाथ" ओर से /Appellant by :        Shri Sunil Talati, A.R.
      #यथ" क% ओर से/Respondent by :       Shri Rajdeep Singh, Sr. D.R

      ु वाई क% तार*ख /
     सन                Date of Hearing                  02/11/2017
     घोषणा क% तार*ख /Date of Pronounce ment             16/11/2017

                             आदे श / O R D E R

PER MAHAVIR PRASAD, JUDICIAL MEMBER :

This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)-6, Ahmedabad, dated 20/03/2015 for the Assessment Year (AY) 2011-12, on the following Grounds:

Cat Cosmetics and Healthcare Pvt. Ltd. vs. ITO Asst.Year -2011-12 -2- i. On the facts and circumstances of the case and in law, the Ld. CIT(A) was not justified in confirming the additions made by the Ld. A.O and passed an impugned order without appreciating the facts and details available on record. The Ld. CIT(A) has erred in rejecting the short adjournment application filed by the Appellant without any reason/justification and without grating a sufficient opportunity of being heard to the appellant. Hence the order passed by Ld. CIT(A) being unjustifiable and unlawful and thus same be quashed in the interest of justice.

ii. The Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.37,90,000/- u/s.40(a)(ia) of the Act. Your appellant would like to submit that out of Rs.37,90,000/-, Interest amounting to Rs.36,00,000/- was paid to M/s Sharp Industries Ltd, and the recipient has offered this interest income in its return of income filed for the year under consideration and in view of new Proviso 2 inserted to Section 40(a)(ia) of the Act, the disallowance of Rs.36,00,000/- u/s 40(a)(ia) confirmed by Ld. CIT(A) is completely incorrect and unlawful and thus the same be deleted.

ii.a The Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.1,90,000/- being professional fees out of above Rs.37,90,000/-, u/s.40(a)(ia) of the Act. It is submitted that payment of professional fees made to various persons were below the threshold limit specified u/s.194J and it was under no obligation to deduct the tax from payment of professional fees in view of provision of Chapter XVII-B of the Income Tax Act. Therefore the impugned disallowance confirmed by Ld. CIT(A) of Rs,1,90,000/- u/s.40(a)(ia) kindly be deleted.

iii. The Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.1,00,000/- out of total administrative expenses incurred during the year. It is submitted that being private limited company, the accounts of Appellant are subject to Statutory Audit under Companies Act, 1956 as well as Tax Audit u/s.44AB of the Income-tax Act and therefore it is prayed that adhoc addition confirmed by Ld. CIT(A) of Rs.1,00,000/- kindly be deleted.

Cat Cosmetics and Healthcare Pvt. Ltd. vs. ITO Asst.Year -2011-12 -3- iv. The Ld.CIT(A) has erred in law and on facts in confirming the disallowance of loss incurred on sale of goods amounting to Rs.11,30,884/-. It is submitted that the loss incurred of Rs.11,30,884/- on sale of goods was on account of heavy price fluctuation in the market during the year, which was beyond the control of the appellant, it is therefore submitted that the loss claimed of Rs. 11,30,884/- be allowed now.

2. The relevant facts as culled out from the materials on record are as under:-

The return of Income was filed on 09.03.2012, declaring total loss of Rs.9,39,350/-. The return of income was processed under section 143(1) of Income Tax Act on 05.04.2012. Notice u/s.143(2) was issued on 05.06.2013 and notices u/s.142(1) of the Income Tax Act were issued several time, but same were return back as unserved with remark left or non-attended. Further, notices u/s.142(1) were issued four times and same were duly attended vide submissions dated 17.12.2013, 22.01.2014, 14.02.2014 and 26.02.2014. The assessment has been completed u/s.144 of the Act, determining the total income of Rs.50,20,884/- and ld.

Assessing Officer determined the total income as follows:

            Sr.     Particulars                          Rs.
            No.
            1.      Disallowance u/s.40(a)(ia)            ,,000/-
            2.      Addition     on    account   of        1,00,000/-
                    Administrative Expenses
            3.      Disallowance of loss on sale of       11,30,884/-
                    goods

3. Thereafter, appeal was filed before the ld.CIT(A) but none appeared on behalf of the assessee.

Cat Cosmetics and Healthcare Pvt. Ltd. vs. ITO Asst.Year -2011-12 -4-

4. We have gone through the relevant record and impugned order. It is fact that AO passed an order u/s.144 of I.T. Act before the ld. CIT(A) who rejected the application for adjournment filed by the appellant without assigning any reason or justification.

5. In the interest of the justice, we set aside the order of the CIT(A) and send it back to the file of CIT(A) with the direction to decide matter afresh after giving an opportunity of being heard to the assessee and assessee is also directed to appear before the ld.CIT(A) as and when called by him. Therefore, appeal of the assessee is allowed.

6. In the result, appeal filed by the assessee is allowed.

This Order pronounced in Open Court on                         16/11/2017



            Sd/-                                               Sd/-
           Ekuh'k cksjM                                 egkohj izlkn
          ¼ys[kk lnL;½                                 ¼U;kf;d lnL;½
  ( MANISH BORAD )                                (MAHAVIR PRASAD)
ACCOUNTANT MEMBER                                JUDICIAL MEMBER

Ahmedabad;           Dated    16/11/2017
Priti Yadav, Sr.PS
                                                                 ITA No.1874/Ahd/2015

Cat Cosmetics and Healthcare Pvt. Ltd. vs. ITO Asst.Year -2011-12 -5- आदे श क ! त#ल$प अ%े$षत/Copy of the Order forwarded to :

1. अपीलाथ" / The Appellant

2. #यथ" / The Respondent.

3. संबं1धत आयकर आयु3त / Concerned CIT

4. आयकर आय3 ु त(अपील) / The CIT(A)-6, Ahmedabad.

5. 6वभागीय त न1ध, आयकर अपील*य अ1धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदे शानुसार/ BY ORDER, स#या6पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation 03/11/2017 (dictation-pad 4 pages attached at the end of this appeal-file)

2. Date on which the typed draft is placed before the Dictating Member 14/11/2017

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......

7. Date on which the file goes to the Bench Clerk.....................

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................