Income Tax Appellate Tribunal - Ahmedabad
Shri Ratnesh Metal Industries Private ... vs Dcit, Circle-3(1)(2),, Ahmedabad on 28 June, 2018
आयकर अपील
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IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, AHMEDABAD
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BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER
And SMT MADHUMITA ROY, JUDICIAL MEMBER
आयकर अपील सं./I.T.A.
No.112/Ahd/2018
( नधा रण वष / Assessment Year : 2014-15)
Ratnesh Metal Industries Pvt. बनाम/ DCIT,
Ltd. Vs. Circle - 3(1)(2),
Mehta Lodha & Co., Ambawadi,
Chartered Accountants, 105, Ahmedabad - 380 015
Sakar - I, Ashram Road,
Ahmedabad - 380 009
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAACR 9219 H
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri P. D. Shah, A.R.
यथ क ओर से/Respondent by : Shri Prasoon Kabra, Sr. D.R.
ु वाई क तार ख /
सन Date of Hearing 26/06/2018
घोषणा क तार ख /Date of Pronounce ment 28/06/2018
आदे श / O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the assessee against the appellate order of the Commissioner of Income Tax(Appeals)-9, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)- 9/11004/DCIT, Cir 3(1)(2)/16-17 dated 01.12.2017 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") dated 23.12.2016 relevant to Assessment Year (AY) 2014-15.
ITA No.112/Ahd/2018Ratnesh Metal Ind. Pvt. Ltd. DCIT Asst.Year -2014-15 -2-
2. The grounds of appeal raised by the assessee are as under:-
"1. That the learned Commissioner of Income Tax(Appeals) has erred in law and facts by confirming the disallowance of interest of Rs.51,81,558/-, on account of Purchases of Capital asset and therefore the learned AO should be directed to allow the said interest while computing the total income.
2. That the learned Commissioner of Income Tax (Appeals) has erred in law and facts by confirming the disallowance of interest of Rs.10,65,860/- on account interest free advance and therefore the learned AO should be directed to allow the said expenses while computing the total income.
3. That the learned Commissioner of Income Tax (Appeals) has erred in law and facts by confirming the disallowance of Rs.74,692/-on account of interest on interest free advance and therefore the learned AO should be directed to allow the said expenses while computing the total income.
4. That the learned Commissioner of Income Tax (Appeals) has erred in law and facts by confirming the addition of Rs. 15,00,000/- and therefore the learned AO should be directed to delete the said addition while computing the total income.
5. That the appellant craves liberty to add, amend, alter and delete any grounds of appeal before the final hearing."
3. The ld. AR before us submitted as under:
"1. That the learned AO has not accepted the request for adjournment on 28/11/2017 and passed the order 1/12/2017 and without considering the facts of the case and ground of appeal, the Id. CIT(A) has been decided the appeal and has dismissed the appeal of the assessee. Now the ground wise submission is as under:-
2. Ground No.1-3:-
[a] Ground No.1: Against the advance for capital work, Rs.96,64,880/- already capitalized and therefore no further amount is required to disallowed.ITA No.112/Ahd/2018
Ratnesh Metal Ind. Pvt. Ltd. DCIT Asst.Year -2014-15 -3-
(b) Ground No. 1-3:- Without prejudice to above facts, there is ample interest free fund with the company of Rs.5445 Lacs as on 31/3/2013 and Rs.5478 as on 31/3/2014, against these items of alleged non business or capital advances. The total advances toward purchase of fixed assets, during the year from time to time is about Rs.1150 Lacs, Rs. 140 Lacs as on 31/3/2014 as interest free loans and advances and Rs.9. 85 Lacs Non Business Advances as on 31/3/2014.In this regard reliance is placed on the judgment of the Hon'ble Gujarat High Court in the case of C1T Vs Raghuvir Synthetics Pvt Ltd.(354 1TR 222)(Guj).
(c) The ld.AO has not established that borrowed money has been used for the non business purpose.
(d) In view of the said the disallowance of interest of Rs.51,18,558+ Rs.10,65,860/- and Rs.74,692/- is bad in law and against the facts and therefore the ld.AO is to be directed to not to disallow any part of interest expenses.
3. Ground No.4:-The confirmation of the unsecured loan (PAN AADCR 8444 F] of the said party has been received and same may sent to AO for the verification.
Your honor is requested to consider the above submission while deciding the appeal and oblige."
On the other hand the ld. DR opposed restoring the matter to the file of AO for fresh adjudication.
4. Heard the rival contentions and perused the materials available on record. From the preceding discussion, we note that the last date of hearing of the appeal was fixed on 28.11.2016, but assessee filed the adjournment application. However, the Ld. CIT(A) passed ex parte order ITA No.112/Ahd/2018 Ratnesh Metal Ind. Pvt. Ltd. DCIT Asst.Year -2014-15 -4- dated 1.12.2017 by observing that it was the last opportunity for a hearing provided to the assessee.
On perusal of appellate order, we find that Ld. CIT(A) affirmed the action of Assessing Officer on ex parte order. The provisions of Section 250(6) of the Act require the Commissioner (Appeal) to dispose of the appeal in writing with reasoning. But we find from the impugned order of Ld. CIT(A) who confirmed the order of AO without deciding the same on merit. We also note that the ld. CIT (A) has not allowed the proper opportunity of being heard. The principle of audi alteram partem is the basic concept of natural justice. The expression "audi alteram partem"
implies that a person must be given an opportunity to defend himself. This principle is the sine qua non of every civilized society. The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross-examination, right to legal representation, the disclosure of evidence to the party, report of inquiry to be shown to the other party and reasoned decisions or speaking orders. We took this guidance for the right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi v. Union of India in 1978 SCR (2) 621, wherein Hon'ble Supreme Court has laid down that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of the norm of the rule of audi alteram partem. We find that in this instant case, the assessee was not given a proper hearing. Therefore, we are of the view that the assessee must be given one more opportunity of hearing and to represent his case.ITA No.112/Ahd/2018
Ratnesh Metal Ind. Pvt. Ltd. DCIT Asst.Year -2014-15 -5- We also note that the assessee claimed not to have filed the copy of confirmation in respect of the loan obtained during the year before the AO at the time of assessment proceedings.
Therefore, in exercise of the power conferred under Rule 28 of Tribunal Rules, we restore this appeal to the file of AO for reconsideration all grounds of appeal after allowing the proper opportunity of being heard by law. We are sending this appeal to the AO for fresh adjudication to avoid the multiplicity of the appeal. Nevertheless, to mention that the assessee will cooperate in the appeal proceedings and his failure will entail confirmation of the impugned addition made by the AO. The assessee will file necessary evidence on which he wants to rely upon at the time of the hearing. Hence, this ground of assessee's appeal stands allowed for statistical purpose.
5. In the result, for statistical purpose, the appeal of the assessee is treated as allowed.
This Order pronounced in Open Court on 28/06/2018
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(MADHUMITA ROY) (WASEEM AHMED)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 28/06/2018
Priti Yadav, Sr.PS
ITA No.112/Ahd/2018
Ratnesh Metal Ind. Pvt. Ltd. DCIT
Asst.Year -2014-15
-6-
आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं'धत आयकर आयु)त / Concerned CIT
4. आयकर आय)
ु त(अपील) / The CIT(A)-9, Ahmedabad.
5. ,वभागीय /त/न'ध, आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड4 फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या,पत /त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation 27/06/2018 .
2. Date on which the typed draft is placed before the Dictating Member ...27/06/2018.
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............