CAT COSMETICS & HEALTHCARE PVT. LTD.,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(3),, AHMEDABAD

आदेश / 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:

ITA No.1874/Ahd/2015 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.

ITA No.1874/Ahd/2015 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) 37,90,000/- 2. Addition on account of 1,00,000/- Administrative Expenses 3. Disallowance of loss on sale of 11,30,884/- goods

ITA No.1874/Ahd/2015 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.

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

Sd/- Sd/- Ekuh’k cksjM Ekuh’k cksjM Ekuh’k cksjM Ekuh’k cksjM egkohj izlkn egkohj izlkn egkohj izlkn egkohj izlkn ¼ys[kk lnL;½ ¼U;kf;d lnL;½ ¼ys[kk lnL;½ ¼U;kf;d lnL;½ ¼ys[kk lnL;½ ¼U;kf;d lnL;½ 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 -

आदेश 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 आयु�त(अपील) / The CIT(A)-6, Ahmedabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ 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 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………………