ACIT, CENTRAL CIRCLE-3, PATNA vs. M/S TIRUPATI HOMES LTD, PATNA

O R D E R

PER SONJOY SARMA, JM:

1. That on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 1,35,06,630/- made by the A.O. on account of undisclosed/misreporting of sale of flats, accepting the contention and calculation made by the assessee in which the main questionable point is deduction of expense of Rs.5,19,35,503/- on account of "excess provision of earlier years deducted'" to complete the substantially completed units. The ld.CIT(A) has accepted this contention which was made for the first time before him, without making proper verification and verifying corresponding entry in the accounts.

2. That the Ld.CIT(A) failed to appreciate the fact that the assessee did not discharge the burden of proof on him by submitting any information or even responding to the clarification sought by the A.O. The assessee was totally non co-operating in the assessment proceedings. The Ld.CIT(A) accepted explanation provided by the assessee for the first time before him in violation of Rule 46A of the I.T. Rules. The Ld.CIT(A) even did not ask the reason for not providing explanation to the A.0. Further,

2 & 71/PAT/2020 M/s. Tirupati Homes Limited A.Y. 2016-17 the contention raised before CIT(A) were one sided and could not be verified independently because no remand report was asked for. The assessee by not cooperating before the A.O. has avoided all the further enquiries and took the benefit providing explanation best suited to him without any further verification. The acceptance of the assessee's explanation provided for the first time before CIT(A) has made the function of A.O. as of no relevance as Ld. CIT(A) did not even obtain a report from the A.0.

3. That on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.74,39,916/- made by the A.O. on account of undisclosed rental receipt by accepting the contention of the assessee which was made for the first time before the Ld.CIT(A).

4. That the order of the Ld.CIT(A) being erroneous in law and on facts to be vacated and the order of the A.O. be restored.

1. The ld. CIT(A) has deleted the penalty on the ground that quantum additions made in the assessment order in consequence of which penalty was imposed has been deleted by the CIT(A). However, further fact is that the department is contesting the deletion of quantum addition before the Hon’ble ITAT.

2. That the appellant craves leave to add, alter, delete, modify the grounds of appeal before the Hon’ble ITAT.

5. At the time of hearing, ld. DR brought to our notice that various additional evidences were admitted by the ld. CIT(A) from the assessee but those additional evidences were never placed before the Assessing Officer for his comments. The ld. DR further submitted that the ld. CIT(A) has erred in deleting the addition of Rs. 1,35,06,630/- made by the AO on account of undisclosed / misreporting of sale of flats by accepting the contention and calculation made by the assessee by allowing the deduction of expenses of Rs. 5,19,35,503/- on account of “excess provision of earlier years deducted” to complete substantially completed units. Besides that the ld. DR submitted that while passing the order ld. CIT(A) has erred in deleting the addition of Rs. 74,39,916/- made by the AO on account of undisclosed rental receipt by accepting the contention made by the assessee and while allowing, ld. CIT(A) did not obtain a report from the ld. AO. Therefore, the impugned order was not justified by simply admitting the various additional evidences and giving relief to the assessee even without calling for any remand report from the concerned Assessing Officer. On the other hand, ld. AR supported the decision rendered by the ld. CIT(A).

4 & 71/PAT/2020 M/s. Tirupati Homes Limited A.Y. 2016-17 6. We have perused the case records and heard the submission made by the ld. DR and analyzed the facts and circumstances of the act, the Assessing Officer vide at para no. 3 & 4 of his order has made addition of Rs. 74,39,916/- and Rs. 1,35,06,630/- in the hands of assessee. The facts further clearly demonstrates that in the entire order of ld. CIT(A), he has not called for any remand report from the Assessing Officer. The ld. CIT(A) simply relied on the submissions and evidences furnished before him by the assessee and has given relief even without himself conducting any specific enquiry. This is an issue of assessment proceeding where the assessee avoided to appear before the Assessing Officer and at the appellate stage has provided certain additional evidences but they were also not scrutinized on the parameters of genuineness by the concerned Assessing Officer since no remand report was called for from him.

5 & 71/PAT/2020 M/s. Tirupati Homes Limited A.Y. 2016-17 8. In view of the above matter, we set aside the order of the ld. CIT(A) and remand the matter back to the file of AO and direct him to adjudicate the matter on the instant issues involved in the instant appeal. The assessee is directed to submit the necessary evidences before the Assessing Officer in support of its claim. The Assessing Officer should pass speaking order after verification of the facts and examine the evidences produced before him at the time of hearing. Needless to mention here that the ld. Assessing Officer shall grant reasonable opportunity of hearing to the assessee and accordingly the appeal of the revenue is allowed for statistical purposes.