Hans Dyg. & Ptg. Mills Pvt.Ltd., Surat vs Department Of Income Tax

आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद यायपीठ ''B'', अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, "B" BENCH

सव ौी ौी जी. जी.सी. सी.गु ा, माननीय उपा!य", उपा!य", एवं अिनल चतुवद ' (, (, लेखा सदःय के सम" । BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER)

ITA No.986/Ahd/2011 [Asstt.Year : 2007-2008]

DCIT. Cir.1 बनाम/Vs. M/s.Hans Dyg. & Prtg. Mills P. Ltd. Surat. S/4, Sardar Palace, Sardar Market Parvat Patiya, Surat. PAN : AABCR 1485 Q

(अपीलाथ. / Appellant) (ू0यथ. / Respondent)

राजःव क1 ओर से/ : Revenue by Shri Roopchand, Sr.DR िनधा 4रती क1 ओर से/ : Assessee by None सुनवाई क1 तार(ख/ : Date of Hearing 6th January, 2015 घोषणा क1 तार(ख/ : Date of Pronouncement 02-02-2015

आदे श / O R D E R

PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the Revenue for the Asstt.Year 2007-2008 is directed against the order of the CIT(A).

2. At the time of hearing, non-appeared on behalf of assessee- respondent, and therefore, the appeal of the Revenue is being decided ex parte qua the assessee-respondent on merits after hearing the learned DR. Notice of hearing was served in this case by the department and evidence has been filed by the department on record in this behalf. ITA No.986/Ahd/2011

2. The ground no.1 of appeal of the Revenue is under: 1. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in deleting the additions made on account of disallowance of manufacturing expenses inspite of the failure on the part of the assessee to furnish supporting proof or documentary evidences to substantiate its claim."

3. The learned DR submitted that the assessee was not cooperating with the AO at the time of its assessment, and the assessment has to be framed ex parte qua the assessee under section 144 of the Act. The assessee could not file any evidence with regard to manufacturing expenses claimed by it amounting to Rs.1.61 crores. He submitted that the AO was reasonable in disallowing only 10% of the manufacturing expenses claimed by the assessee. He relied on the order of the AO.

4. We have considered submissions of the learned DR and perused the orders of the AO and the CIT(A). We find that the assessment in this case was framed by the AO ex parte under section 144 of the Act due to non- co-operation of the assessee. The assessee has failed to file evidence in support of its claim of expenses. The CIT(A) has not passed any speaking order on this issue while deleting the addition except saying that the assessee has submitted sufficient details relating to the expenses. In these facts, we are of the view that there was no justification on the part of the CIT(A) to delete the disallowance at 10% of the total manufacturing expenses claimed by the assessee and disallowance made by the AO being reasonable, is confirmed and the ground no.1 of the Revenue is allowed.

5. The ground no.2 of the Revenue is as under:

"2. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition made on account of interest subsidy received under TUF scheme inspite of the fact that -2- ITA No.986/Ahd/2011

the assessee failed to offer any explanation as to where the amount was credited.

6. The learned DR has submitted that the assessee has failed to give any explanation as to whether the amount of interest subsidy received under TUF scheme was credited by it. He relied on the order of the AO.

7. We have considered submissions of the learned DR and perused the orders of the AO and the CT(A). We find that the assessee was not cooperative and has not filed any explanation regarding query of the AO that whether the said subsidy was credited in the profit & loss account or not, against the interest liability of the Company. We find that the CIT(A) has passed a cryptic order on this issue and has recorded that the interest subsidy receivable by the assessee has been duly accounted for as per the mercantile system. In these facts, we are of the view that it shall be interest of justice to restore this issue to the file of the CIT(A) to decide the same afresh as per law after providing reasonable opportunity of hearing to the parties, and the CIT(A) is directed to pass a speaking order on this issue. We direct accordingly.

8. The ground no.3 of the appeal of the Revenue is as under:

"3. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in admitting additional evidence in respect of flood claim, thus violating provision of Rule 46A to I.T.Rules, 1962."

9. The learned DR has relied on the order of the AO. We find that the CIT(A) has passed a reasonable speaking order on this issue, and there is no violation of provision of Rule 46A of the I.T. Rules, 1962 in this case, and therefore, the order of the CIT(A) is confirmed and the ground no.3 of the Revenue is dismissed.

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10. In the result, the appeal of the Revenue is partly allowed for statistical purpose.

Order pronounced in Open Court on the date mentioned hereinabove.

Sd/- Sd/- अिनल चतुव'द( / ANIL CHATURVEDI) (अिनल (जी. जी.सी. सी.गु ा/G.C. GUPTA) लेखा सदःय /ACCOUNTANT MEMBER उपा!य" /VICE-PRESIDENT

Copy of the order forwarded to: 1) : Appellant 2) : Respondent 3) : CIT(A) 4) : CIT concerned 5) : DR, ITAT. BY ORDER

DR/AR, ITAT, AHMEDABAD

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