RASHIDA VAHANVATY,MUMBAI vs. ITO WARD 20(3)(1), MUMBAI

O R D E R

PER PAVAN KUMAR GADALE JM:

1. The learned CIT(A) erred in confirming the addition of INR 12,72,493 made on account of bogus purchase under Section 69C as unexplained expenditure.

Rashida Vahanvaty, Mumbai. - 2 -

2. The learned CIT(A) erred in confirming the disallowance of INR 1,68,750 made on account of cash payment for purchasing the machinery under Section 40A(3). The learned CIT(A) erred in not directing the Assessing Officer to delete the said addition as the appellant had not claimed any expenditure in the profit and loss account.

3. The A.O to test check the genuineness of the transactions has issued notice u/s 133(6) of the Act on the parties and the notices were returned un served. The A.O. has called for additional details and the assessee was also issued show cause notice. The assessee has filed the reply but the AO was not satisfied with the explanations and observed that the genuineness of transactions could not be established and made addition of bogus purchase u/s 69C of the Act of Rs.12,72,493/- and disallowance u/s 40A(3) of the Act of Rs.1,68,750/- and assessed the total

Rashida Vahanvaty, Mumbai. - 4 - income of Rs.20,21,160/- and passed the order U/sec143(3) r.w.s147 of the Act dated30-11-2019.

4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.

5. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the submissions made in the assessment proceedings. Further the assessee has a good case on merits and shall substantiate with the material evidences. Per Contra, the Ld. DR supported the order of the CIT(A).

6. We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed

Rashida Vahanvaty, Mumbai. - 5 - the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld.CIT(A) has issued the notices of hearing referred at Page 3 Para 8 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in Rashida Vahanvaty, Mumbai. - 6 - submitting the information for early disposal of the appeal and we allow the grounds of appeal of the assessee for statistical purposes.

Order pronounced in the open court on 24.04.2023.