KRIDHAN INFRA LIMITED,MUMBAI vs. CIT (APPEAL),IT DEPT, MUMBAI

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ITA 2883/MUM/2022Status: DisposedITAT Mumbai22 February 2023AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) failed to consider the material on record and dismissed the appeal without adjudicating the issue. The Tribunal directed the Assessing Officer to allow the claim after verifying the provided documents.

What were the facts?

The assessee debited a loss on sale of fixed assets to its P&L account, but later disallowed this amount in its income tax return. The CPC added this loss back to the total income. The CIT(A) dismissed the assessee's appeal for want of prosecution.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal for want of prosecution without considering the merits of the case and the disallowance already made by the assessee in its return.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI AMARJIT SINGH

For Appellant: Shri Rohit Golecha
For Respondent: Shri Abhishek Kumar – Sr AR
Hearing: 13/02/2023Pronounced: 22/02/2023

O R D E R PER:AMARJIT SINGH (AM) This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter called, Ld.CIT(A)] dated 10/10/2022 for the assessment year 2019-20 sustaining the disallowance of amount added back by the Assessing Officer in respect of loss on sale of fixed assets to the amount of Rs.2,51,86,330/- for the assessment year 2019-20.

2 ITA 2649/Mum/2022

2.

The fact in brief are that the return of income filed by the assessee on 24/10/2019 was processed under section 143(1) of the Act by the CPC, Bangalore. Thereafter, the CPC, vide order under section 154 of the Act on 27/11/2020 disallowed Rs.2,51,86,330/- being the loss on sale of fixed assets debited by the assessee to the P&L Account. Against the decision of CPC, the assessee has filed appeal before the Ld.CIT(A). As per the form 35 filed before the Ld.CIT(A), the assessee has submitted that CPC had issued communication under section 143(1)(a) to which the assessee had replied and submitted that it had already disallowed Rs.2,51,86,330/- being loss on sale of fixed assets in the income-tax return filed by the assessee. The assessee had also categorically explained that the same was reflected in Schedule B-Computation of Income from business or profession in the return of income. The assessee has also raised specific ground of appeal

on the basis of above facts before the Ld.CIT(A) stating that adding the same amount resulted in treating the same amount twice. However, the Ld.CIT(A) has dismissed the appeal of the assessee for want of prosecution since the assessee has not made any compliance before the Ld.CIT(A).

3. Heard both the sides and perused the material on record. The assessee has filed return of income on 24/10/2019. The CPC (Assistant Director of Income-tax) vide order under section 154 dated 27/11/2020 has added loss on sale of assets of Rs.2,51,86,330/- to the total income of the assessee. The assessee filed appeal before the Ld.CIT(A) and stated that it had already disallowed the impugned loss of Rs.2,51,86,330/- as per the Income-tax return filed on 24/10/2019. However, the Ld.CIT(A) has dismissed the appeal of the assessee for want of non

3 ITA 2649/Mum/2022 prosecution since the assessee filed to make any compliance before the Ld.CIT(A) during the course of appellate proceedings.

4.

During the course of appellate proceedings before us, the Ld.Counsel filed paper book comprising the copies of intimation under section 143(1), financials for A.Y. 2019-20, copy of tax audit report and copy of income-tax return and certified that these documents were filed / available before the lower authorities. The Ld.Counsel demonstrated by referring to these documents that loss on sale of fixed assets was initially debited to the P&L Account. However, while filing the return of income, the assessee had disallowed the same and the assessee had also submitted reply to the CPC online on the portal on 04/02/2020. It was also explained that the same was reflected at para – Schedule B – Computation of income from business or profession in the return of income. In the light of the above facts and circumstances, we observe that Ld.CIT(A) has not considered the material available on record and dismissed the appeal of the assessee for want of prosecution. We consider that the provisions of section 250(6) of the Income-tax Act provides that the orders of the first appellate authority disposing of the appeal shall be in writing and to settle the point arising in the appeal and the reasons for such decisions. However, in the case of the assessee, the Ld.CIT(A) has not adjudicated the issue on the basis of material available on the record. Therefore, we direct the Assessing Officer to allow the claim of the assessee after verification of the material on record as referred supra in this order. Accordingly, the grounds of the assessee is allowed for statistical purpose.

4 ITA 2649/Mum/2022

5.

In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 22/02/2023.

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