JUBILEE HILLS LANDMARK PROJECTS PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD

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ITA 1630/HYD/2017Status: DisposedITAT Hyderabad11 May 2018AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee failed to appear before the CIT(A) due to circumstantial difficulties, not intentional non-compliance. Therefore, in the interest of justice, the assessee should be given another opportunity to present its case on merits.

What were the facts?

The assessee, engaged in real estate development, filed a return showing a substantial loss. The AO disallowed the claimed expenditure, treating it as unjustified as business operations had not commenced. The CIT(A) dismissed the assessee's appeal ex-parte for non-compliance.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal ex-parte without considering the assessee's submissions regarding non-receipt of notices and circumstantial difficulties in appearance.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SMT P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri V. Siva Kumar
For Respondent: Shri AGV Prasad
Hearing: 01/05/2018Pronounced: 11/05/2018

PER S. RIFAUR RAHMAN, A.M.:

This appeal filed by the assessee is directed against the order dated 30/06/2017 of CIT(A) – 2, Hyderabad for AY 2013-14.

2.

Briefly the facts of the case are, assessee company engaged in the business of development and real estate, filed its return of income for the AY 2013-14 on 26/09/2013 admitting loss of Rs. 18,93,65,612/-. Subsequently, the case was selected for scrutiny through CASS and notices u/s 143(2) and 142(1) dated 21/08/2015 were issued. In response to the said notices, the AR of assessee filed the information as called for.

2.1 The AO observed that the assessee had shown nil business income and had claimed expenditure of Rs. 18,95,87,000/-. Assessee was asked to furnish the justification of expenses vide order sheet

2 ITA No. 1630/Hyd/17 Jubilee Hills Landmark Projects Pvt. Ltd. noting dated 09/02/2016, against which, assessee filed its submission dated 11/02/2016. After considering the submissions of assessee, the AO observed that there were no business operations during the year, the claim of expenditure cannot be justified, as the business operations can be said as commenced only when the actual transaction takes place by selling apartments. Hence, the AO disallowed the total loss claimed by the assessee. The AO also made the following additions: 1. Addition of Rs. 11,35,263/- treating it as income from other sources. 2. Addition of Rs. 61,577/- on account of short term capital gain. 3. Disallowance of Rs. 8,62,708/- u/s 14A r.w.rule 8D.

3.

Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A).

4.

The CIT(A) passed ex-parte order dismissing the appeal of the assessee by observing that despite sufficient opportunities provided neither the assessee nor AR furnished any evidence during appellate proceedings also rebutting the conclusions drawn by the AO, therefore, the AO justified in making the above mentioned additions.

5.

Aggrieved by the order of the CIT(A), the assessee is in appeal before us.

6.

In the grounds of appeal, the grievance of the assessee is that the notices issued by the CIT(A) fixing the appeal for hearing on 26,05/2017, 08/06/2017 and on 22/06/2017, were not received by the assessee, hence, there was no compliance to the said dates.

7.

Before us, the ld. AR of the assessee submitted that the CIT(A) ought to have noticed that the assessee claimed a loss of Rs. 18,93,65,612/- for the year in the return of income which was disallowed by the AO and ought to have considered that non-

3 ITA No. 1630/Hyd/17 Jubilee Hills Landmark Projects Pvt. Ltd. pursuance of appeal would result in huge tax loss to the assessee company which was not intended by the assessee. He, therefore, submitted that the matter may be restored to the file of the CIT(A) with a direction to give one more opportunity to the assessee to represent its case on merits.

8.

Ld. DR, on the other hand, relied on the orders of revenue authorities.

9.

Considered the rival submissions and perused the material on record. We notice from the record that ld. CIT(A) has fixed the date for hearing on three occasions. In those dates, due to some reasons, ld. AR unable to appear before him. It was submitted that in the last occasion i.e. on 22.06.17 it was not the intentional but due to circumstantial difficulties, it was not represented. Therefore, in the interest of justice, assessee should be given another opportunity and further we notice that the case was dismissed within a short period of time of two months. Accordingly, we remit this case back to the file of ld. CIT(A) to adjudicate the matter afresh on merit after giving proper opportunity of being heard to the assessee.

10.

In the result, appeal of the assessee is treated as allowed for statistical purposes. Pronounced in the open Court on 11th May, 2018.

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated: 11th May, 2018 kv

4 ITA No. 1630/Hyd/17 Jubilee Hills Landmark Projects Pvt. Ltd. Copy to:-

1) Jubilee Hills Landmark Project Pvt. Ltd., Sy. No. 16/3, Ward No. 9, Road No. 1, Jubilee Hills Checkpost, Hyd – 500 081 2) DCIT, Circle – 2(1), Hyderabad. 3) CIT(A) –2, Hyderabad. 4) Pr. CIT - 2, Hyd. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File

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