CENTEC RRR SYSTEMS AND SENSORS PRIVATE LIMITED,NAVI MUMBAI vs. ITO 15(1)(3), MUMBAI

During the course of assessment proceedings, the Assessing Officer observed that the assessee had not filed its return of income and had later filed the return only after the Assessing Officer issued notice issued under section 148 of the Act. The Assessing Officer was of the view that the assessee had not commenced its business operations during the relevant previous year and, accordingly, held that the interest earned on fixed deposits amounting to ₹2,08,080 was assessable under the head "Income from Other Sources" instead of business income. The Assessing Officer observed that the assessee had claimed certain expenditure which was not allowable since that the business had not commenced, and the Assessing Officer completed assessing the total income at ₹2,08,080.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), who dismissed the appeal. The learned CIT(A) held that the assessee had neither produced any documentary evidence before the Assessing Officer nor during the appellate proceedings to prove that its business had actually commenced. The CIT(A) observed that although the assessee stated that it had filed documents such as VAT returns, sales tax returns and ledger accounts during the assessment proceedings, the assessee could not produce any such material before him despite having been provided various opportunities. The CIT(Appeals) further held that though the assessee's stated that business had commenced, this was merely a self-serving statement which was not supported by any documentary evidence, and even after the assessee being granted the opportunity to furnish supporting documents, the assessee stated that it had nothing further to submit in the matter. In these circumstances, the learned CIT(A) upheld the order of the Assessing Officer that the business had not commenced and dismissed the appeal of the assessee.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

We have heard the learned Departmental Representative and perused the material available on record. None appeared on behalf of the assessee despite the matter being called for hearing. No application seeking adjournment has been filed. We also observe from the record that on the last several occasions, the assessee has neither caused appearance nor shown any interest in prosecuting the appeal. We, therefore, proceed to dispose of the on the basis of the material available on record.

On merits also, we find no reason to interfere with the order of the learned CIT(A). The issue before us is whether the assessee had commenced its business during the relevant previous year so as to entitle it to claim the expenditure as revenue expenditure and to assess the interest income under the head "Profits and Gains of Business or Profession". Both the Assessing Officer and the learned CIT(A) have specifically held that the assessee failed to furnish any documentary evidence to establish that the business of the assessee had commenced. The learned CIT(A) has specifically observed that despite adequate opportunities, the assessee did not produce any supporting documents, supporting evidence, statutory records or any other material to substantiate its claim that business of the assessee had commenced. Even in response to the specific notice issued by CIT(Appeals), the assessee merely stated that it had nothing further to submit. Before us also, no material has been placed on record to rebut the findings of the Assessing Officer and CIT(Appeals). Accordingly, we find no infirmity in the order of the learned CIT(A) so as to call for any interference.

In the result, the appeal of the assessee is dismissed.