DCIT CORPORATE CIRCLE 4 (1), CHENNAI vs. M/S MPL CARS PVT LTD, CHENNAI

This appeal by the Revenue is arising out of the order of the learned Commissioner of Income Tax (Appeals)-8, Chennai in order No.97/14-15 dated 19.01.2018. The assessment was framed by the ACIT, Company Circle-IV(3), Chennai for the assessment year 2008-09 u/s. 143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter ‘the Act’), vide order dated 24.03.2014.

The brief facts are that the AO during the course of assessment proceedings noticed that the assessee for constructing IT Park-1, engaged a Product Engineer Shri P.K. Ramesh and in consideration of the services rendered, one floor in IT park was allotted to him on 03.04.2007. The entire project was completed and sold in 2008. The assessee based on the cost of construction of the portion allotted to Shri P.K. Ramesh, the total cost of construction for IT Part-1 is extrapolated by Rs.36,47,37,992/- as against the total cost claimed by the assessee at Rs.51,94,21,284/-. According to AO, this excess expenditure of Rs.15,46,83,292/- is to be disallowed while computing short term capital gain arising out of sale of IT Park-1. Hence, he disallowed the same. Aggrieved assessee preferred appeal before CIT(A). The assessee before CIT(A) filed written submissions dated 27.08.2014 explaining the entire details of payments to project engineer, agreement entered into, actual cost adopted and extrapolated cost considered. But the CIT(A) without considering the details by criptic order vide para 7 has deleted the addition, as under:- “7. It is noted from the records that the Assessing Officer has not disputed the books of accounts maintained by the assessee alongwith all the primary

Now, before us none is present from assessee’s side despite this matter fixed for hearing on 20 occasions. Even the RPAD notices could not be served and returned back with a remark either “no such company” or “left”. We have noted the RPAD address, which is the same address as given in Form No.36 or in the order of CIT(A). Hence, qua assessee we are hearing this appeal ex-parte.

The ld.CIT-DR Shri T. Vasanthan, only requested that the order of CIT(A) is non-speaking order and no facts are discussed or issue is discussed by CIT(A) and hence, requested for setting aside the order of CIT(A) and remanding the matter back to his file for passing a speaking order.

After hearing ld.CIT-DR, we noted that actually the CIT(A) has not recorded his finding how this expenditure is allowable. Hence,

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