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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA
सुनवाई क� तार�ख / : 29.08.2017 Date of Hearing घोषणा क� तार�ख / : 12.10.2017 Date of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: This is an Appeal by the Assessee is directed against the Order by the learned Commissioner of Income Tax (Appeals)-41, Mumbai (‘CIT(A)’ for short) dated 21.10.2016 and pertains to the assessment year (A.Y.) 2008-09.
The grounds of appeal read as under:
(A.Y. 2008-09) Shri Vipul N. Doshi vs. ITO 1. The learned CIT(Appeal) has erred in law and on the facts of the case in disallowing interest of Rs.30,380/-.
2. The learned CIT(Appeal) has erred in law and on the facts of the case in disallowing Rs.17,28,789/- in respect of payment made for freight, octroi and Excise.
3. The learned CIT(Appeal) has erred in law and on the facts of the case in disallowing business promotion expenses Rs.5,51,621/-.
At the outset, the learned Counsel of the assessee submitted that she will not be pressing ground number one. Hence, ground number one is dismissed as not pressed.
The assessing officer in this case has passed the assessment order pursuant to the revision by the learned Commissioner of Income Tax u/s. 263 of the Income Tax Act, 1961 (‘the Act’ hereinafter). On the impugned issues, the Assessing Officer has passed the following order: On the issue of non deduction of TD5 on Freight, Octroi and Excise is concerned the assessee submitted that the payments are not covered u/s194C and same is out of purview of YDS. It is also filed that all Freights are not paid for export to the agents of foreign shipping liners/airliners. The submission of the assessee in this regard is not accepted as foreign parties have not appointed following persons as their agents.
Sr. No. Name of the parties Address
1 Pal India Shipping Agency 1, Mores Cobral Estate, Sahar Village, Andheri (E), 20th Electronic City, Bangalore - 2 Biocon Ltd. 5600100 3 EDS Cargo Pvt. Ltd. 9, Abbas Manjil, Sahar Road, Chakala Junction, Andheri (E), Mumbai - 400099 306, Said Sadan, 3rd Floor, Modi 4 Mora Shipping Agency Street, Mumbai 5 Orchid Shipping P. Ltd. 203, Gokui Arcade, Subhash Road, Mumbai.
(A.Y. 2008-09) Shri Vipul N. Doshi vs. ITO 6 Penta Freight P. Ltd. 12, Sahar Cargo, V.M. Shah Marg, 3.B. Nagar, Andheri (L), Mumbai. 7 Vee Vin Shipping 319, 21, Narsinath Street, 4/15, Mody Chamber, Masjid, Mumbai 400009 Above stated parties are working as providers of Freight services, this purpose whether they engage their own ships or hire outside hips is not relevant. In view of the above, there is violation of section 194C of the I.T. Act, and hence disallowed of Freight, Octroi and Excise charges paid to the above parties without deduction of tax of Rs.17,28,789/-.
As regard to the Business Promotion expenses of Rs.5,51,6217-, the assessee has not submitted any supporting evidence / proof which will ascertain the genuineness of the claim of the expenses. Therefore, the claim of Business Promotion expenses to the tune of Rs.5,51,621/- is disallowed and added to the total income of the assessee.
Upon the assessee’s appeal, the learned CIT(A) noted that the assessee has submitted additional evidences. She noted that these additional evidences were sent to the Assessing Officer and the remand report was obtained. However, the appellate order of the learned CIT(A) did not mentioned anything about the additional evidence or the remand report.
In the appellate order, the ld. CIT(A) held that the Assessing Officer has followed the order of the ld. CIT(A) under section 263 of the Income Tax Act. She found that the assessing officer had no discretion in this regard. She held as under:
8. Aggrieved by the above additions, the appellant has preferred an appeal with this office. During the course of appellate proceedings, the A.R. of the assessee filed additional evidences along with the paper book which was not submitted during
(A.Y. 2008-09) Shri Vipul N. Doshi vs. ITO the course of assessment proceedings. Accordingly, remand report was called for from the Assessing Officer vide letter dated 12.11.2014 by my predecessor. The Assessing Officer submitted the remand report vide letter dated 17.02.2016 through Range Head.
I have considered the submissions of the appellant. I have also perused the findings of the A.O. in the assessment order. In the order u/s. 263, the ld. CIT had given findings on all the issues. At the end of the order u/s. 263, the A.O. was directed to give effect to the findings of the order. Therefore, I am of the opinion that nothing was left for adjudication to the A.O. The Assessing Officer in his order u/s. 143(3) r.w.s. 263 has correctly followed the findings given by the ld. LD. CIT(A) in order u/s. 263 on all the issues. Therefore, all the additions/disallowances made by the AO in order u/s. 143(3) r.w.s. 263 as per direction of ld. LD. CIT(A) in order u/s. 263 are sustained.
Against the above order, the assessee is in appeal before the ITAT.
8. I have heard both the counsels and perused the records. I find that in the assessment order, Assessing Officer has clearly given his findings and passed an order. The Assessing Officer has nowhere stated that he is simply following the revision order and not examining the issue and making any application of mind. In such situation, when there is the assessment order by the Assessing Officer, additional evidences filed by the assessee, and remand report by the assessing officer, it was incumbent upon the ld. CIT(A) to make proper application of mind and give a detailed order on the facts and provisions of law involved. In my considered opinion, the order by the learned CIT-A is a nonspeaking order. It has been held by the Hon’ble Supreme Court in the case of SaharaIndia (Farms) vs. CIT [2008] 300 ITR 403 (SC) that even quasi judicial orders have to be consistent with the rules of natural justice.
In the present case, the order by the Ld CIT(A) does not show any application of mind
(A.Y. 2008-09) Shri Vipul N. Doshi vs. ITO on the issues before her. Hence, I set aside the order of learned CIT-A and remit the issue back to the file of learned CIT-A. Learned CIT-A is directed to consider the issue afresh and pass a speaking order after giving the assessee proper opportunity of being heard.