M/S ZENITH REAL INFRA LTD.,MUMBAI vs. ITO-3(3)(4), MUMBAI

PER AMARJIT SINGH, AM:

“1. On the facts and circumstances of the case and law on the subject, the assessing officer erred in making addition of Rs.1,17,29,000/- treating Advances Received against flats as unexplained cash credits / income of the assessee u/s 68 of the Income Tax Act, 1961 without correct appreciation of fact of the case and law on the subject and the learned Commissioner of Income Tax (Appeals) erred in upholding addition of Rs.1,17,29,000/- in respect of advance received against flat u/s 68 of the I.T. Act, 1961.

M/s Zenith Real India Infra Ltd. Vs. ITO-3(3)(4)

On the facts and circumstances of the case and law on the subject, the addition made may be deleted.

on or before the date of hearing.”

2. The fact in brief is that return of income declaring total income at Rs.11,89,020/- was filed on 30.09.2013. The case was subject to scrutiny assessment and notice u/s 143(2) was issued on 04.09.2014. The assessee company was engaged in the business of construction and infrastructure developers. During the course of assessment the A.O noticed that assessee has shown long time liabilities for projects at Rs.841,30,623/- which included advance against flat booking of Rs.117,29,000/- and advance from M/s R.B. Developers of Rs. 11,00,000/-. The Assessing Officer has treated the aforesaid amount of advance of Rs.1,28,29,000/- as unexplained for want of supporting evidences and added to the total income of the assessee.

3. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee on the ground that assessee has not made any compliance in response to the notices issued during the course of appellate proceedings.

4. Heard the ld. D.R. and perused the material on record. During the course of assessment the A.O made addition at Rs.1,28,29,000/- in respect of advance received by the assessee mainly against booking of flat since the assessee failed to furnish supporting details. The A.O has finalized the assessment u/s143(3) of the Act and in the assessment M/s Zenith Real India Infra Ltd. Vs. ITO-3(3)(4) order at para 2 the A.O has categorically mentioned that director of the assessee company along with chartered accountant and authorized representative of the assessee company had attended from time to time and submitted the detailed called for. However, the A.O has not specifically given any reference of any show cause notice pertaining to non submission of detailed called by the A.O. The A.O has not mentioned any notice issued u/s 142(1) of the Act requiring the assessee to furnish the particulars of detail. No remand report has also been called by the ld. CIT(A) from the A.O to clarify the detail of submission not given by the assessee during the course of assessment proceedings. Section 250(6) provide that the order of the ld. CIT(A) disposing to appeal shall be in writing and shall states points for determining the decision, and the reasons for the decision. Therefore, we are of the view that it will be appropriate to restore this case to the file of the ld. CIT(A) for adjudicating afresh after providing one more opportunity to the assessee. The assessee is also directed to make compliance before the ld. CIT(A) during the course of appellate proceedings without any failure. Accordingly, this appeal of the assessee is allowed for statistical purposes.