KRANTHI EDIFICE PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD

Brief facts of the case are that the assessee-company, which is engaged in the business of construction activity, filed its return of income for the AY.2013-14 on 01-10-2013, admitting income of Rs.1,41,78,020/-.

During the assessment proceedings u/s.143(3) of the of the Income Tax Act [Act], the Assessing Officer (AO) observed that out of the total paid-up share capital of assessee i.e., Rs.13 Crores, Rs.5 Crores have been transferred from partnership firm viz., Kranti Construction on conversion into company and the balance amount of Rs.8 Crores has been received in cash. The assessee filed confirmation letters from the parties who have invested in cash in which they confirmed that investments in cash. The AO observed that the assessee failed to furnish their returns of income and bank statements and therefore, he held that the identity of the parties, genuineness of transactions and creditworthiness of the parties is not proved. Thus, he invoked the provisions of Section 68 of the Act and made the addition of Rs.8 Crores. He also made certain other additions u/s.40(a)(ia) of the Act and disallowed ROC charges.

Aggrieved, the assessee filed an appeal before the CIT(A), but did not appear before the CIT(A) inspite of notices for hearings on 13-03-2017, 30-03-2017, 17-04-2017, 15-05- 2017, 30-05-2017, 26-06-2017 and 11-07-2017 issued to the assessee. Therefore, the CIT(A) proceeded to dispose-of the appeal and confirmed the assessment order.

Aggrieved, the assessee is in appeal before us by raising the following Grounds :

The case is taken up for hearing on 29-09-2020 through video conferencing and both the parties were heard.

Having gone through the assessment order as well as the order of the CIT(A), we find that the assessee has not filed any evidence before the CIT(A) due to which the CIT(A) was constrained to confirm the assessment order by observing that the assessee has not furnished any evidence during the appellate proceedings to rebut the conclusions of the AO in the assessment order. The CIT(A) ought to have decided the appeals on merits.

Ld.Counsel for the assessee prayed for another opportunity to present its case before the CIT(A).

Ld.DR was also heard.

Taking into consideration the fact that none appeared before the CIT(A) and that even the CIT(A) has not disposed-of the appeal on merits but has merely confirmed the assessment order, we deem it fit and proper to remand the issue to the file of CIT(A) with a direction to pass a speaking order on merits of the case. The assessee is directed to file all the relevant material before the CIT(A) and co-operate with the CIT(A) for early conclusion of the appeal proceedings.

In the result, the appeal of assessee is treated as allowed for statistical purposes.