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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AACCD3143N (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue by: Shri S. K. Mitra Assessee by: Shri Mitesh Shah सुनवाई की तारीख / Date of Hearing: 09/05/2019 घोषणा की तारीख /Date of Pronouncement: 24/06/2019 आदेश / O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the present appeal against the order dated 19.10.2016 passed by the Commissioner of Income Tax (Appeals) -12, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2012- 13.
The revenue has raised the following grounds: -
"1. On the facts and circumstances of case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO of ITA No. 7616/M/2016 A.Y.2012-13 Rs.1,24,18,443/- on account of port recovery and wharfage charges.
2. On the facts and circumstances of case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the assessee company failed to prove that it had actually carried out any business activity during A.Y. 2012-13 and the port recovery and wharfage charges claimed were actually incurred wholly and exclusively for purpose of business and allowable in nature.
3. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the AO be restored."
The brief facts of the case are that the assessee filed its return of income on 17.09.2012 declaring total loss to the tune of Rs.2,01,86,638/-. The return was processed u/s 143(1) of the I.T. Act, 1961. The case was selected for scrutiny under CASS. Thereafter, notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee is engaged in the business of Development of Infrastructure facilities. The assessee claimed the port recovery charges in sum of Rs.1,24,18,443/- as expenses. Since there was no business, therefore, the AO disallowed the same and added to the income of the assessee. The CIT(A) has allowed the claim of the assessee on the basis of this fact that there was temporary „lull in the business‟ and „going out of business was sold computed, therefore, the claim of the assessee was allowable. The revenue was not satisfied, therefore, filed the present appeal before us.
ISSUE NOS. 1 to 3:- 4. All the issues are in connection with the allowance of the claim of the assessee in sum of Rs.1,24,18,443/- Port Recovery and Wharfage charges. The Ld. Representative of the Department has argued that the ITA No. 7616/M/2016 A.Y.2012-13 assessee failed to prove this fact that the assessee was actually carrying the business in the A.Y. 2012-13 and Port Recovery and Wharfage Charges were belonging to its business and allowable in nature ,therefore, the finding of the CIT(A) is wrong against law and facts, therefore, is liable to be set aside . However, on the other hand, the Ld. Representative of the assessee has relied upon the order passed by the CIT(A) in question. On appraisal of the above said finding of the CIT(A), we find that the CIT(A) has nowhere discussed the cogent and convincing in connection with the temporary „lull in the business‟. It is to be seen whether the assessee was actually doing the business in the relevant year or not. It can be assessed in view of the evidence if any adducible before the AO on record. Moreover, it is also required to be confirmed that the port recovery and wharfage charges in sum of Rs.1,24,18,443/- is rightly connected to the business of the assessee. It is also required to be seen whether the said claim was raised by assessee in the earlier year also or not and what was the picture in the subsequent year also. It is not in dispute that if there is temporary „lull in the business‟ then the claim of the assessee is allowable but the claim is certainly required to be examined whether the same is connected to the business or not. Since, the evidence has not been discussed in the finding of the CIT(A), therefore, we are of the view that the matter of controversy is liable to be examined at the end of the AO to verify the claim of the assessee, therefore, we set aside the finding of the CIT(A) on this issue and restored the issue before the AO to examine the issue afresh by giving an opportunity of being heard to the assessee in accordance with law.
ITA No. 7616/M/2016 A.Y.2012-13