M/S AAP REALTORS LTD.,MUMBAI vs. DCIT CC 4 (2), MUMBAI

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ITA 4857/MUM/2019Status: DisposedITAT Mumbai29 October 2021AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT admitted the additional evidence, stating the assessee should not suffer for non-filing of information. The matter was set aside and restored to the Assessing Officer for a fresh decision on merits.

What were the facts?

The assessee, engaged in real estate, had selling and marketing expenses disallowed by the AO due to lack of supporting details. The CIT(A) confirmed this disallowance. The assessee appealed to the ITAT, seeking to admit additional evidence.

What were the issues?

Whether the disallowance of selling and marketing expenses was justified, and whether additional evidence should be admitted at the appellate stage.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 250,Section 37(1),Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

For Respondent: Shri. Mehul Jain. DR
Hearing: 27.10.2021Pronounced: 29.10.2021

O R D E R

PER PAVAN KUMAR GADALE JM:

1.

The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)- 52, Mumbai passed u/s 143(3) and 250 of the Income Tax Act, 1961. The assessee has raised the following grounds of appeal:

1. The learned CIT(A) erred in law and in facts in not holding that the Assesseement order u/sec143(3) of the Act passed by the AO is bad in law, illegal and null and void.

M/s. AAP Realtors Ltd, Mumbai - 2 - 2. The learned CIT(A) has erred in law and in facts in not holding that the A.O. erred in passing the assessment order in gross violation of principles of natural justice.

3.The learned CIT(A) has erred in law and in facts in confirming the disallowance of Rs.14,14,557/-on account of selling and marketing expenses u/sec37(1)of the Act.

2.

The Brief facts of the case are that, the assessee company is engaged in the business of real estate and construction activities. The assessee has filed the return of income for the A.Y 2015-16 on 31.10.2015 disclosing a total income of Rs.9,25,32,776/- Subsequently the case was selected for scrutiny and the A.O. has issued notice u/s 143(2) and 142(1) of the Act. In compliance, the Ld. AR of the assessee has furnished the details from time to time. There was survey u/sec133A of the Act on Transcon group on 22-01-2015 and various incriminating documents were impounded at the assesses premises. The A.O on perusal of the financial statements found that the selling and marketing expenses debited in the profit and loss account of Rs.1,41,45,569/- are not supported with the proper details and made adhoc addition @20%

M/s. AAP Realtors Ltd, Mumbai - 3 - which worked out to RS.14,14,557/-. Similarly made the addition of short fall of income disclosed in survey operations of Rs.5,41,067/- and assessed the total income of Rs.9,30,73,850/- and passed the order u/s 143(3) of the Act dated 13.10.2017.

3.

Aggrieved by the order, the assessee has filed an appeal before the CIT(A). In the appellate proceedings the CIT(A) considered the grounds of appeal, findings of the A.O and the submissions and has confirmed the disallowance of selling & marketing expenses and granted relief in other grounds of appeal and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.

4. At the time of hearing, the Ld. AR made submissions on the admission of the additional evidence. The contentions of the Ld. AR are that the assessee was prevented by sufficient cause in submitting the information before the A.O in respect of selling and marketing expenses. The Ld. AR made submissions on the merits of the case and prayed for an opportunity of hearing to substantiate the case with the evidences before

M/s. AAP Realtors Ltd, Mumbai - 4 - the lower Authorities. Contra, the Ld. DR relied on the order of the CIT(A).

5.

We heard the rival submissions and perused the material on record. The sole crux of the disputed issue is in respect of admission of additional evidence which could not be filed for various reasons. The contentions of the Ld. AR are that the additional evidence play a vital role in decision making and in the assessment proceedings, the assessee could not submit the complete details of invoices, bills and vouchers of selling & marketing expenses.

6.

We have considered the facts, circumstances, additional evidences and the paper book. We are of the opinion that the assessee should not suffer for non filing of material information, as the evidences played vital role and we admit the additional evidence. Accordingly, to meet the ends of justice and considering the principles of natural justice, we set aside the order of the CIT(A) and restore the entire disputed issue along with the additional evidence to the file of the Assessing officer to decide on merits and the assessee should be provided adequate opportunity of hearing. The assessee should cooperate in M/s. AAP Realtors Ltd, Mumbai - 5 - filling the information for early disposal of the appeal and allow the grounds of appeal

of the assessee for statistical purposes.

7. In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 29.10.2021.

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