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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE, JM:
The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-16, Mumbai passed u/s 143(3) r.w.s 145(3) and 250 of the Act. The assessee has raised the following grounds of appeal:
1. On the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals), hereinafter referred to as the CIT (A) has erred in confirming the rejection of the books of accounts of the appellant u/s. 145(3) of the Act
without appreciating the correct facts of the case and the clarifications given by the appellant vide the Statement of Facts.
2. On the facts and in the circumstances of the case, the CIT(A) has erred in confirming the addition of Rs. 18,59,00,000/-, made by the assessing officer u/s. 68 of the Act. The addition has been made by the assessing officer on the basis of irrelevant facts and the same deserves to be deleted.
Without prejudice to the ground 2 above, on the facts and in the circumstances of the case, the CIT (A) has erred in confirming addition u/s. 68 of the Act to the extent of Rs. 15,79,00,000/- in respect of loan from Balu India Pvt. Ltd., taken by Easiworks Enterprise Solutions Pvt. Ltd., the amalgamating company, in the earlier financial year.
4. On the facts and in the circumstances of the case, the CIT (A) has erred in confirming the disallowance of Rs. 1,45,55,796/- on account of Interest on loan paid to Balu India Pvt. Ltd. without appreciating the correct facts of the case.
On the facts and in the circumstances of the case, the CIT (A) has erred in confirming that the loss of Rs. 1,34,35,617/- on account of loss from shares / derivatives is a speculative loss and therefore the same is not eligible for set off against the other incomes of the appellant.
6 The CIT (A) has failed to appreciate the facts that (a) loss from derivatives is specifically excluded from the definition of " speculative transaction" and also that (b) loss from trading in shares is on account of amalgamation of business of Easiworks Enterprise Solutions Pvt. Ltd., and accordingly the same is one of the principle businesses of the company and accordingly the loss is not a speculation loss as per the provisions of Explanation to section 73 of the Act.
On perusal of the facts, the appeal was filed by the assessee on 02-04-2018 and the case was posted for hearing on 6-06-2019,30-07-2019,22-01-2020,4-03- 2020,15-09-2020,13-10-2020,31-12-2020,8-042021,7- 06-2021,29-07-2021,13-09-2021,26-10-2021,29-12- 2021,10-02-2022,23-02-2022,26-05-2022,28-06-2022 and today i.e 21.07.2022, none appeared on dates of hearing nor any application was filed for adjournment. On considering the facts and the action of the assessee in nonappearance on date of hearing. The presumption is that after filling the appeal, the assessee is not inclined/ interested to prosecute the appeal. Accordingly, we heard the Ld. DR submissions and considered the material information available on record.
3.The brief facts of the case are that the assessee company is engaged in the business of real estate and filed the return of income electronically for the A.Y 2012-13 on 30.03.2013 disclosing a total income of Rs. 1,92,17,070/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act was issued. In compliance to the notice, the Ld.AR of the assessee appeared from time to time and submitted the details. The A.O on perusal of the Tax Audit Report and details and financial statements filed by the assessee find that the assessee is engaged in the business of investment and development of real- estate and builders. During the year, another company M/s Easiworks Enterprises Solutions Pvt Ltd has been amalgamated with the assessee company under the scheme of amalgamation with effect from 01.01.2011 approved by the Hon’ble Bombay High Court vide order dated 01.02.2013. Whereas the company which is amalgamated is in share trading business and assessee is a real estate developer which implies that both these business have no connection and the assessee has filed the details in respect of the amalgamation but the A.O on perusal of the tax audit report found that the assessee has raised Rs. 19,12,00,000/- as unsecured loan and the A.O has called for the various details and dealt on the facts at Para 4 of the assessment order.
The assessee has raised the amount of Rs. 19,12,00,000/- from the six parties and called for the details. Subsequently the assessee was asked to submit the profit and loss account and other details of these loan creditors. But the assessee did not file any supporting documents. Subsequently notice u/s 133(6) of the Act was issued and the called for the information. Whereas the A.O. has dealt on the facts of these cases and observed that in respect of four parties the notices were returned back by the postal authorities with remark not known and in respect of two parties where the reply has been filed. The A.O has dealt on the facts with respect to the companies which has provided the information and rejected the books of accounts of the asseesse. The A.O. was not satisfied with the explanations and made an addition as unexplained cash credit u/s68 of the Act of Rs.18,59,00,000/- and the interest on unsecured loan Rs.1,45,00,000/- and disallowance u/s 14A of the Act of Rs. 31,944/- and disallowed the speculation loss to the extent of Rs.1,34,67,561/- and assessed the total income of Rs.23,31,40,430/- and passed the order u/s143(3)r.w.s 145(3) of the Act dated 31.03.2015.
5. Aggrieved by the order, the assessee has filed an appeal with the CIT(A), the CIT(A) considered the grounds of appeal, submissions of the assessee and issued notice to the assessee but there was no compliance and therefore 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.At the time of hearing, none appeared on behalf of the assessee and the Ld.DR supported the order of the CIT(A).
We heard the Ld. DR submissions and perused the material on record. Prima-facie the CIT(A) has passed 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. We find the Ld.CIT(A) has issued the notices of hearing referred at page 2 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. We find that the assessee has raised grounds of appeal challenging the additions of the assessing officer and there could be various reasons for non appearance which cannot be overruled. We considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case before the CIT(A) along 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 pass a speaking order and the assessee should cooperate in submitting the information for early disposal of the appeal and allow the grounds of appeal of the assessee statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.