SHRI JAIPRKASH K.ASWANI,SURAT vs. THE ACIT, CIRCLE-1(2),, SURAT

Assessee by Shri Rajesh Shah – CA Revenue by Ms. Anupama Singla – Sr.DR Date of hearing 24.05.2021 Date of pronouncement 24.05.2021 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the orders of ld. Commissioner of Income tax (Appeals)-2, Surat dated 17.11.2017 for the assessment year (AY) 2013-14. The assessee raised the following grounds of appeal: “1. The Hon’ble CIT (Appeals)-II, was not justified in confirming in The learned ACIT has erred in making the addition of Rs.15,62,400/- on account of House Property.

2. The appellant reserves the right to add, alter, amend or withdraw any grounds of appeal.”

2. Brief facts of the case are that the assessee is engaged in the business of sale and purchase of the property. The assessee while filing return of income declared taxable income of Rs. 42,87,330/-. During the assessment the assessing officer noted that in the balance sheet the assesse has shown 16 unsold flats and 12 unsold shops as stock in trade, however no income was offered by assessee from those units. The assessing officer on the basis of decision of Delhi High Court in Ansal Housing Finance Ltd (ITA No. Shri Jaiprakash K.Aswani (AY 2013-14) 18/1999 dated 31.03.2012) worked out the annual letting value of all the units. The assessing officer treated the letting value of flats @ Rs. 6000/pm and shops @ Rs.7500/- pm and after grating deduction of 30% as per section 24(a) made addition of Rs.15,62,400/-. At the time of passing the assessment order, the assessing officer is recorded that none appeared on behalf of the assessee on seven consecutive dates despite service of notices under section 142(1) of the Act. On appeal before the ld.CIT(A), the action of AO was upheld. The ld.CIT(A) before passing the order, recorded that assessee has not made no compliance on three occasions as recorded in para 5.1.2. The ld. CIT(A) upheld the action of AO by taking view that the assessee is not interested in prosecuting the appeal. Further aggrieved, the assessee has filed present appeal before us.

3. We have heard the submissions of the ld. Authorised Representative (AR) for the assessee and the learned departmental representative (DR) for the revenue. The ld.AR for the assessee submits that the ld.CIT(A) passed the ex-parte order without discussing the merits of the case. The ld.AR submits that no opportunity of hearing was given to the assessee. The assessee has good case on merit and is likely to succeed if he is given opportunity. The ld. AR further submits that he undertake on behalf of the assessee to be vigilant in future in appearing before the lower authorities. The ld. AR for the assessee further submits that the assessee submitted required details before the assessing officer as well as before ld. CIT(A). the ld. AR for the assessee submits that in fact the case is covered by the Shri Jaiprakash K.Aswani (AY 2013-14) decision of Tribunal for assessment year 2010-11 dated 18.12.2018 in ITA No. 2237/Ahd/2015.

4. On the other hand, the Sr. DR for the Revenue submits that the assessee was given ample opportunity by ld CIT(A), as recorded in para 5.1.2 of the order assailed before the Tribunal. The assessee failed to comply with the notices issued by the ld.CIT(A). The ld.CIT(A) left with no option, except to proceed to decide the issue and in absence of any evidence or explanation affirm the action of AO. In alternative submission, the ld.CIT(DR) for the Revenue submits that in case the Hon’ble Tribunal is deem appropriate, the assessee be directed to be vigilant and not to default in attending the proceedings and to waste the time of public authorities/ld.CIT(A).

5. We have considered the rival submission of both the parties and have gone through the orders of Lower Authorities. We have also gone through the decision of the Tribunal in assessee’s own case for the A.Y. 2011-12 (supra). We find that assessing officer brought the unsold unit of flats and shops to tax by working out their Annual Letting Value (ALV). The assessing officer granted the benefit of section 24(a) and added the remaining amount as of Rs. 15,62,400/- as income from house property. The ld.CIT(A) upheld the action of AO in ex-parte proceedings. We have noted that the ld.CIT(A), has not recorded whether the final show cause notice dated 31.02.2017 was property served or not or that final show cause notice for hearing, so fixed was acknowledged by assessee or his representative. The ld.CIT(A) confirmed the addition in a non-speaking