SAVI LEATHERS,NOIDA vs. ACIT, CIRCLE-43(1), NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH ‘G’: NEW DELHI
PER ANADEE NATH MISSHRA, AM (A) This appeal by Assessee is filed against the order of Learned
Commissioner of Income Tax (Appeals)-15, Delhi [“Ld. CIT(A)”, for
short], dated 31/08/2018 for Assessment Year 2013-14.
(B) In this case, assessment order dated 30/03/2016 was passed
u/s 143(3) of Income Tax Act, wherein the assessee’s income was
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ITA No.8125/Del/2019 Savi Leathers vs. ACIT
determined at Rs.3,13,32,229/- (rounded off to Rs.3,13,32,230/-)
as against returned income of Rs.1,75,03,610/-. In the assessment
order, separate additions were made amounting to Rs.3,26,919/-
(on account of disallowance out of Conveyance, Travelling and
Telephone expenses), Rs.70,65,703/- (on account of disallowance of
commission expenses) and Rs.64,35,997/- (on account of Discount
on sale expenses). The assessee’s appeal against the aforesaid
assessment order was dismissed by Ld. CIT(A)-15, Delhi, vide
impugned appellate order dated 31/08/2018 and the aforesaid
additions amounting to Rs.3,26,919/- (on account of disallowance
out of Conveyance, Travelling and Telephone expenses),
Rs.70,65,703/- (on account of disallowance of commission
expenses) and Rs.64,35,997/- (on account of Discount on sale
expenses were confirmed. Aggrieved, the assessee filed this present
appeal in Income Tax Appellate Tribunal (“ITAT” for short). The
original grounds of appeal filed by the assessee are as under:
“1. The Id. C1T (Appeals), dismissed the appeal by citing that on date of hearing on 03/08/2018. no one attended and appellant's AR filled an application that father of the partner of appellant’s firm has died and they have gone to their native place to firm has any link with the attendance of Page 2 of 7
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appellant's AR for hearing is not based on the facts and circumstances of the case. Sir, it is humbly submitted that the appellant's AR has always appeared for hearing and gets time as there was change in incumbent of the office of the Ld. CIT(A) and the appellant received a notice on 10/05/2018 fixing the date on 22/05/2018, the AR of the appellant appeared but was told to come on other days by the staff of the Ld. CIT(A). Again a letter was received by the appellant dated 27/07/2018 and received on 02/08/2018 t fixing the case for hearing on 03/03/2018, suddenly AR of the appellant has to go to Bihar to visit the partner of the appellant on the death of his father and tilled an application for adjournment as the date of hearing was very short to, gather the information and documents to be submitted, and was again told that a notice for new date for hearing will be sent. But ignoring the genuine hardship went through by the partner of the appellant, the Ld. C1T(A) has dismissed the appeal without giving sufficient opportunities of being heard which is violation of natural justice. The order passed by the Ld. CIT (A) be set aside and or be deleted.
The Id. CIT(A) has erred in disallowing Rs.70,65.703/- as difference between commission paid as per P&L account and as per reconciliation of 26Q, ignoring the facts and circumstances of the entry made and expenses incurred. Sir, it is humbly submitted that the out of Rs.70,65,703/- Rs. 10.00,00/- was incurred as commission Rs. 60.84.100/- was incurred as finishing and checking expenses and was debited under the Group Head "Selling expenses others. These expenses were incurred for business purposes and applicable TDS was deducted and paid to the government. The same be deleted.
The Id. C1T(A) has erred in dismissing the appeal of the appellant allowing Rs.64,35,997/- as discounts offered and write off made in the debtors of the appellant assessee without considering the facts and circumstances of the expenses incurred. Sir, it is humbly submitted that Rs.64.35,997/- was in fact cumulative debit balance in debtors account on account of exchange fluctuation and free sample sale and was irrecoverable hence the amount was written off as bad debts and shown as "Discount on sales" . The same be deleted.
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That the appellant craves to add, alter, amend or forgo any of the grounds of appeal at the time of hearing.
PRAYER In view of the above what is stated here in above and the grounds taken the appellant most respectfully prays that the Hon’ble ITAT may be pleased to set and quash the impugned order passed by the Ld. CIT(A) and declare the same to be unsustainable both on facts and in law based on each of the above grounds and vacate the same with consequential relief to the appellant after hearing. It is prayed accordingly.
(B.1) In the course of appellate proceedings in ITAT, the assessee
filed revised grounds/concise grounds of appeal which are as
under:
“1. Because the Id. CIT (Appeals), dismissed the appeal ignoring the genuine hardship went through by the partner of the appellant, the Ld. CIT(A) has dismissed the appeal without giving sufficient opportunities of being heard which is violation of natural justice. The order passed by the Ld. CIT (A) be set aside and or be deleted.
Because the Id. C1T(A) has erred in confirming the addition of Rs.70,65,703/- as difference between commission paid as per P&L account and as per reconciliation of 26Q, ignoring the facts and circumstances of the entry made and expenses incurred. The same be deleted.
Because the Id. CIT(A) has erred in confirming the addition and dismissing the appeal of the appellant allowing Rs.64.35,997/- as discounts offered and write off made in the debtors of the appellant assessee without considering the facts and circumstances of the expenses incurred. The same be deleted.
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Because the Ld. C1T(A) has erred in confirming the ad hoc addition of Rs.3,26.919/-without considering the facts and circumstances of the expenses incurred. The same be deleted.
That the appellant craves to add, alter, amend or forgo any of the grounds of appeal at the time of hearing.
PRAYER
In view of the above what is stated here in above and the grounds taken the appellant most respectfully prays that the Honble ITAT may be pleased to set and quash the impugned order passed by the Ld. CIT(A) and declare the same to be unsustainable both on facts and in law based on each of the above grounds and vacate the same with consequential relief to the appellant after hearing. It is prayed accordingly.”
(C) At the time of hearing before us, the learned Authorized
Representative (“Ld. AR” for short) for the assessee drew our
attention to page-5 of aforesaid assessment order dated
30/03/2016, and highlighted that the assessee faced problem in
getting the account/details as the same was destroyed in fire on
14/09/2015. He further submitted that the Ld. CIT(A) did not
provide reasonable opportunity to the assessee and drew our
specific attention to ground no.1 of the original grounds of appeal
and also to ground no.1 of the revised/concise grounds of appeal.
After some deliberation, at the time of hearing before us, the
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representatives of both sides, the Ld. AR for the assessee and the
Ld. Sr. DR for Revenue, both were in agreement that the issues in
dispute in the present appeal may be remanded back for fresh order
in accordance with law, after providing reasonable opportunity to
the assessee.
(D) In view of the foregoing, and as representatives of both sides
are in agreement with this, we set aside the impugned appellate
order dated 31/08/2018 of Ld. CIT(A) and restore all the issues in
dispute to the file of the Assessing Officer with the direction to pass
fresh order in accordance with law, on the specific issues of
aforesaid additions amounting to Rs.3,26,919/- and
Rs.70,65,703/- and Rs.64,35,997/-; after providing reasonable
opportunity to the assessee. All the grounds of appeal are treated as
disposed of in accordance with aforesaid directions.
(E) In the result, for statistical purposes, this appeal is
treated as partly allowed.
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This order was already pronounced orally on 31st August,
2022 in Open Court, in the presence of representatives of both
sides. Now this order in writing is signed today on 31/08/2022.
Sd/- Sd/- (KUL BHARAT) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 31/08/2022 Pk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT NEW, DELHI
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