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JCIT, Spl. Range 26,New Delhi. Vs. M/s Ester Industries Ltd.,DLF Bldg., No.8 Tower A,2nd Floor, DLF Cyber City,DLF, Phase-II, Sector 25,Gurgaon (Haryana)
June, 22nd 2012
                IN THE INCOME TAX APPELLATE TRIBUNAL
                      (DELHI BENCH `A' : NEW DELHI)
              BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND
                 SHRI A.N. PAHUJA, ACCOUNTANT MEMBER

                                    ITA Nos.3655, 3656 & 3657/Del./2000
                                (Assessment Years : 1993-94, 94-95 & 95-96)

JCIT, Spl. Range 26,                 Vs.           M/s Ester Industries Ltd.,
New Delhi.                                         DLF Bldg., No.8 Tower A,
                                                   2nd Floor, DLF Cyber City,
                                                   DLF, Phase-II, Sector 25,
                                                   Gurgaon (Haryana)
                                                    (PAN/GIR No. : N.A.)

(Appellant)                                        (Respondent)

       Assessee by : Shri Prem Sharma, Official Representative of the company
                             Revenue by : Shri Alok Singh Sr.DR





PER U.B.S. BEDI, J.M.


       These three appeals of the department were decided by common order passed by
the Tribunal vide order dated 22.12.2006 in I.T.A. Nos.3655/Del./2000, 3656/Del./2000
& 3657/Del./2000 in respect of assessment years 1993-94, 94-95 & 95-96, respectively,
against which assessee preferred further appeals to the Hon'ble Delhi High Court in
I.T.A. Nos.697, 698 & 699/2007 u/s 260A of the I.T. Act, 1961 and in an earlier round,
the assessee had filed an appeal u/s 260A of the I.T. Act, 1961, against common
judgment of the Tribunal dated 31.1.2005, the Division Bench of the Hon'ble High Court
by an order dated 19.01.2006 had set aside the judgment of the Tribunal dated 31.01.2005
based on a concession that Tribunal had disposed of the appeal without affording a
reasonable opportunity of being heard.


2.     In subsequent appeal, the assessee has principally agreed on account of fact that
Tribunal has once failed to apply its mind to the issue raised and his submission made
before it. The principal submission of the assessee before the Tribunal was that the
                                            2    I.T.A. Nos.3655,3656 & 3657/Del./2000
                                                        (A.Ys. : 1993-94, 94-95 & 95-96)
Assessing Officer had made certain additions and disallowance mechanically while
computing the income without issuing a show cause notice or providing an opportunity of
hearing to the assessee in respect of said additions and disallowances. It was noticed by
the Hon'ble High Court that CIT(A) by an order dated 1.05.2000 had reversed the said
additions and disallowances primarily on the ground that the Assessing Officer had not
discussed the additions or supplied any reasons thereto. The Tribunal in appeal found that
in most of the issue, the CIT(A) had committed the same error while reversing the order
of the Assessing Officer. So, Hon'ble High Court opined that Tribunal ought to have
examined as to whether the Assessing Officer could have made the additions for
disallowed expenses claimed without affording adequate opportunity. Upon perusal of
the impugned judgment, Hon'ble High Court found that Tribunal has not applied its mind
to this aspect of the matter. On the contrary, Hon'ble High Court was constrained to note
that impugned judgment dated 22.12.2006 in second round is but for the change in the
composition of the bench and a cosmetic change in language, almost similar to judgment
dated 31.1.2005 passed by the Tribunal in the first round. So, in these very appeals
before Hon'ble High Court, the assessee was aggrieved by the disallowances of the
various amounts claimed as allowances/expenses. Discussing the details, ground raised
and other material facts, the Hon'ble Division Bench of the Hon'ble High Court by an
order dated 19.01.2006, has set aside the order of Tribunal dated 31.01.2005.
Accordingly, the Tribunal by impugned judgment ostensibly set out to correct the wrong
committed in the first round. After noting that Revenue before the Tribunal had preferred
eight grounds and by reproducing those grounds, Hon'ble high Court has passed the
direction vide order dated 06.03.2009 as per paras.10-12 as under:




       "10. A perusal would show that the basic ground for preferring an appeal by
       the Revenue against the order of the CIT(A) was that all such additions or
       disallowances had been made by the Assessing Officer in view of the fact that the
       assessee had itself made such disallowances in its original and revised return of
       income. The Tribunal by the impugned order dated 22.01.2006 had reversed the
       order of the CIT(A) and restored the order of the Assessing Officer primarily on
       the ground that the assessee both in his original, as well as, in his revised return
       had made admissions which formed the basis of the additions/disallowances made
       by the Assessing Officer.
                                            3    I.T.A. Nos.3655,3656 & 3657/Del./2000
                                                        (A.Ys. : 1993-94, 94-95 & 95-96)
       11.     According to us, the Tribunal ought to have examined the issue as to
       whether the fact that assessee had made an admission with respect to an
       addition/disallowance in its original return or in the revised return would ipso
       facto bar the assessee from claiming an expense or disputing an addition if it is
       otherwise permissible under law. This is so especially in view3 of the
       circumstances,     that    the    Assessing     Officer    while    making     the
       additions/disallowances did not call upon the assessee to furnish any explanation.
       The upshot of the submission made by the Ld.Counsel for the assessee, is that,
       had the assessee been given an opportunity by the Assessing Officer it could have
       demonstrated that no additions or disallowances were called for, in view of the
       binding precedents of Courts and/or Tribunal in respect of each of he
       addition/disallowance. The observations made in the Tax Audit Report could not
       have formed the basis of additions/disallowances by the Assessing Officer. On
       this aspect of he matter the observations in the judgment of the Supreme Court in
       the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerala and Anr.:
       (1973) 91 I.T.R. 18 at page 20 being apposite are extracted herein below:

              "It is no doubt true that entries in the account books of the assessee
              amount to an admission that the amount in question was laid out or
              expended for the cultivation, upkeep or maintenance of immature plants
              from which no agricultural income was derived during the previous year.
              An admission is an extremely important piece of evidence but it cannot be
              said that it is conclusive. It is open to the person who made the admission
              to show that it is incorrect."

       1.1     We find that the Tribunal instead of examining the matter from this angle
       has repeated the order passed in the first round without due application of mind to
       the issues which called for adjudication.

       12.     In these circumstances, we set aside the impugned judgment of the
       Tribunal. The Tribunal will rehear the parties, and if, the Tribunal is of the view
       that the matter requires to be remanded to he Assessing Officer for passing a fresh
       order of assessment, it will do so giving an opportunity to the assessee to appear
       before the Assessing Officer so as to enable him to make his representation before
       him with regard to the facts as well on law on each of the issues. These appeals
       are disposed of with the aforesaid directions."

3.     Pursuant to Hon'ble High Court's direction, these appeals were fixed for hearing
by issuing notices to both the sides.      Ld.Counsel for the assessee requested for
adjournment but ground raised in the application was found to be not adequate and when
this was disclosed to Shri Prem Sharma, Official Representative, appearing for the
assessee company has agreed to argue the appeals and at the very outset, submitted that
                                             4    I.T.A. Nos.3655,3656 & 3657/Del./2000
                                                         (A.Ys. : 1993-94, 94-95 & 95-96)
since the various issues raised in these appeals have not appropriately been dealt with
either by the Assessing Officer or by the CIT(A), moreover various details and
documents are also required to b e submitted and examined. Therefore, in the interest of
justice, orders of the CIT(A) and of Assessing Officer for all the three years should be set
aside and the matters be restored back to Assessing Officer        It was also submitted that
Hon'ble High Court has also passed the direction that while rehearing the appeals, if the
Tribunal is of the view that matter required to be remanded to the Assessing Officer for
passing a fresh order of assessment, it would do so giving an opportunity to the assessee
to appear before the Assessing Officer so as to enable it to make its representation before
him with regard to the facts as well as on law on each of the issues. Since not only, facts
are to be looked into, but issues are required to be appropriately dealt with by the
Assessing Officer and fresh material and evidence is also required to be filed and
verified. Therefore, it would be just and appropriate to restore the matter on the file of
the Assessing Officer for re-consideration of the issues afresh.


4.     Ld.DR has been heard, who relied upon the orders of the Assessing Officer and
pleaded for reversal of the Ld. CIT(A)'s order, but did not raise any serious objection in
case matter goes back to the Assessing Officer as pleaded by the official representative of
the assessee company and      directed by the Hon'ble Delhi High Court also, in view of
facts and circumstances of the case.


5.     We have heard both the sides, considered the material on record. We have also
gone through the orders of the Assessing Officer as well as of CIT(A) for all the years
under consideration. We have carefully gone through the grounds raised in the appeals of
the Revenue for all the years under consideration in the light of arguments of rival sides
and find that the assessee in these cases intend to support the order of CIT(A) and rely
upon various documents and details already on record and to submit further details and
documents. Since intricacies are involved in the issues raised in the appeals of the
Revenue for all the years under consideration and assessee requires to file further details
and documents in order to substantiate and support its claim for relief already granted by
the CIT(A) as contended by the official Representative of the assessee company during
                                              5    I.T.A. Nos.3655,3656 & 3657/Del./2000
                                                          (A.Ys. : 1993-94, 94-95 & 95-96)
the hearing of the appeals and there being no serious objection from Revenue's side, we
in the interest of justice and to have fair play in the matter find it just and appropriate to
set aside the orders of the authorities below and restore the matters back on the file of the
Assessing Officer with the direction to reconsider and re-decide the issues afresh after
giving due opportunity to the assessee and by following the direction issued by Hon'ble
High Court as reproduced in earlier part of the order. We hold and direct accordingly.
6.      As a result, all the three     appeals filed by the department get accepted for
statistical purposes.
        Order pronounced in open court soon after the conclusion of the hearing on
20.06.2012.


            Sd/-                                                        Sd/-
       (A.N. PAHUJA)                                                (U.B.S. BEDI)
 ACCOUNTANT MEMBER                                               JUDICIAL MEMBER
Dated : June         20, 2012
SKB
Copy of the order forwarded to:-
   1. Appellant
   2. Respondent
   3. CIT
   4. CIT(A)-I, New Delhi.
   5. CIT(ITAT)                                               Deputy Registrar, ITAT
 
 
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