SOMA PUNJAB WAREHOUSINGH PRIVATE LIMITED,NEW DELHI vs. ACIT, CIRCLE-24(1), NEW DELHI

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ITA 4809/DEL/2019Status: DisposedITAT Delhi25 November 2020AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal without providing a proper opportunity of hearing and without deciding the case on merits. The matter was remanded back to the CIT(A) for a decision on merits after affording the assessee an opportunity of hearing.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-appearance, despite the assessee claiming non-receipt of notices. The CIT(A) did not decide the appeal on merits. The assessee's primary contention was that receipts from storage facilities of under-construction godowns should be treated as capital receipts.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal for non-appearance without proper notice and without adjudicating on merits. Whether receipts from under-construction godowns are capital or revenue in nature.

Which sections of the Income-tax Act were involved?

Section 250(6),Section 35AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI

Before: SHRI R. K. PANDAMS. SUCHITRA KAMBLE

For Appellant: Shri Umesh Takyar
Hearing: 19.11.2020Pronounced: 25.11.2020

O R D E R PER SUCHITRA KAMBLE, JM :

This appeal is filed by the assessee against the order dated 28.03.2019 passed by CIT (Appeals)-XXV, New Delhi, for Assessment Year 2015-16.

2.

The grounds of appeal are as under:-

1.

The Ld. CIT(A) has grossly erred on facts and in law in summarily dismissing the appeal of the Appellant solely on the basis that the Appellant failed to appear before him and on the assumption that the Appellant chose not to press the appeal, even though the notices for attendance were not received by the Appellant.

2. Without prejudice, the Ld. C1T(A) has grossly erred on facts and in law in not adjudicating the matter based on merits, which is unjustified, illegal and against the provisions of the section 250(6) of the Act.

3. The Ld. CIT(A) has grossly erred on facts and in law in confirming the action of the learned Assistant Commissioner of Income-tax, Circle 24, New Delhi (‘Ld. AO') and considering the amount received from PUNGRAIN for using of storage facilities of under-construction godowns as revenue in nature. 4. The Ld. CIT(A) has grossly erred on facts and in law in confirming the addition of Rs. 18,09,96,432/- without appreciating the fact that receipts arising from using of storage facilities of an under-construction godowns should have been considered as capital receipts which are to be deducted from the cost of construction of the warehouses in terms of the applicable Accounting Standards and, therefore, should not constitute as income of the Appellant. 5. Without prejudice, the Ld. CIT(A) and Ld. AO have grossly erred on facts and in law in not considering that even otherwise if receipts of Rs. 18,09,96,432/- are considered to be revenue in nature and not a reduction from capital expenditure, the Appellant ought to have been allowed a corresponding deduction of one and one-half times of the capital expenditure of Rs. 18,09,96,432/- incurred by the Appellant, under section 35AD of the Act and consequently, the assessed income should have been computed at an enhanced loss of Rs.1,02,40,60,920/- as against the returned loss of Rs.93,35,62,704/-. “

3.

The assessee filed return of income on 30.09.2015 declaring a loss of Rs.93,35,62,704/-. The Assessing Officer passed assessment order dated 30.12.2017 thereby assessing the loss at Rs.75,25,66,270/-.

4.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT (Appeals). The CIT (A) dismissed the appeal of the assessee.

5.

None appeared for the assessee despite giving notice, hence we are proceeding on the basis of the order of the CIT(A) and the assessment order.

6.

The Ld. Departmental Representative relied upon the assessment order and the order of the CIT (Appeals).

7.

We have heard Ld. DR and perused all the material available on record. It is pertinent to note that the CIT (Appeals) has not given any categorical finding on merits of the case and also did not give sufficient opportunity of hearing to the assessee. Therefore, the CIT (Appeals) was not right in dismissing the appeal of the assessee without giving proper opportunity of hearing. Hence, we are remanding back the entire issue to the file of the CIT (Appeals) to be decided on merits. Needless to say, the assessee be given an opportunity of hearing by following the principles of natural justice. The appeal of the assessee is partly allowed, for statistical purpose.

8.

In result, appeal of the assessee is partly allowed, for statistical purpose.

Order pronounced in the Open Court on this 25th Day of November, 2020

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