VIRENDRA P MAMTORA,AHMEDABAD vs. THE ITO, WARD-5(3)(3), AHMEDABAD

This appeal has been filed by the Assessee is directed against the order of the Ld. CIT(A) vide Appeal No. CIT(A)-5/ITO Ward-5(3)(3)/10100/2018-19 order dated 2 . A.Y. 2012-13 28/01/2019 arising out of assessment order dated 30/03/2015. The assessee has taken following grounds of appeal: 1) 1.1 The order passed u/s. 250 on 28.01.2019 for A.Y.2012-13 by CIT(A)-5, A'bad, upholding additions/disallowances of Rs.7,68,50,212/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has erred in holding that the appellant filed small and sketchy reply on 24-12-2018 and his AR Shri Mehul Talera admitted vide order sheet entry dt 10-1-2019 that with respect to ground no. I/a to 1/e there was no evidence available and issues may be decided as per available material. The Ld CIT(A) has passed a non-speaking order without considering the submissions and evidence produced before him. The CIT(A) has also not considered the application for additional evidence as per rule 46A and failed to dispose off this ground. Thus there is gross violation of the principles of natural justice. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding following additions/disallowances: (a) Disallowance of Interest Rs. 53,01,535/- (b) Disallowance of deduction u/c VIA Rs. 16,51,155/- (c) Cash deposits in Bank a/c Rs. 2,81,91,623/- (d) Disallowance of Expenses Rs. 54,68,899

Brief facts of the case are that the appellant is an Individual and derives income by way of mfg and semi whole seller of garments. He had filed his return of income for A.Y.2012-13 on 29-9-2012 declaring total income of Rs. 9,39,410/-.

During the course of assessment proceedings, it is claimed that various notices of hearing were issued and served upon the appellant but he completely failed to comply with the same. Hence the AO passed ex-parte order making following additions/disallowances:

The AO also noticed that the appellant had claimed interest exp of Rs. 53,01,535/- on loan taken on the security of house property but in absence of the supporting evidence relating to the loan taken from bank for the specific purpose of house property, the entire interest exp. was disallowed.

The AO also disallowed the entire claim of Rs.16,51,155/- made under Chapter-VIA consisting of deductions u/s. 80C of Rs.l lacs, u/s. 80GGC of Rs. 15,21,000/-, u/s. 80D of Rs. 6,155/- and u/s. 80GGA of Rs. 24,000/- in absence of the proof of payment.

The AO noticed from the balance sheet that there was unsecured loan of Rs.3,62,37,000/- from 11 parties but the appellant did not established the identity, 4 . A.Y. 2012-13 creditworthiness and genuineness of the transaction in spite of opportunity given. Hence, the addition of Rs. 3,62,37,000/- was made.

The AO has observed that as per AIR information, the appellant had made cash deposits in account with City Bank and HDFC bank as per the details given in para 6.3 of the order, but, in absence of copy of bank account and the source to prove the cash deposits, the same was treated as unexplained cash credit. Hence, the addition of all credits in the bank accounts totaling to Rs.2,81,91,623/- was made.

The AO has observed that in absence of details of sales ledger, sales bill, name and address of the parties etc., the sales were unverifiable and hence 20% of the total expenses were disallowed i.e. Rs. 54,68,899/-. Thus the AO passed an ex-pate order making additions/disallowances of totaling to Rs.7,68,50,212/-.

Being aggrieved, the appellant preferred appeal before the CIT(A)-5, Abad. However, even at this stage, the appellant could not represent his case and the CIT(A) dismissed the appeal without considering the matter on merits.

We have heard both the parties. Undisputedly, assessee could not furnish the relevant details in support of his contention however, lower authorities had to pass an ex parte order. The argument of the Ld. A.R. was that at that point of time, asessee did not have sufficient evidence in support of its contention and at this stage, assessee has filed detailed paper book containing supporting documents those have been filed first time before us. Therefore, in the interest of justice, we set aside this matter to the file of the Assessing Officer to consider all the evidences and supporting documents and thereafter will pass an order as per law. Subject to the condition that assessee shall deposit a cost of Rs. 10,000/- with the department as assessee has wasted precious time of the lower authorities and after payment of the cost. Ld. AO. Shall proceed with the appeal and will pass an order as per law.