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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: VIKAS AWASTHY & SHRI N.K.PRADHANShri Ruchir Parekh,
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-30, Mumbai ( in short ‘the CIT(A)’) dated 29/03/2019 for the assessment year 2013-14.
The assessee is an individual and derives income from salary, rent, profit from partnership firm and other sources. The assessee filed his return of income for the impugned assessment year declaring total income of Rs.9,95,290/- for the impugned
2 आअसं. 5164/मुं/2019 (�न.व. 2013-14) (A.Y.2013-14) assessment year. In scrutiny assessment proceedings the Assessing Officer observed that as against the total investment in fixed assets, shares, etc. aggregating to Rs.1,28,17,495/- the assessee has capital of Rs.1,28,39,337/-. The assessee has advanced loans aggregating to Rs.4,37,58,366/- From the fund position mentioned above the assessee is not having availability of interest free funds. The Assessing Officer concluded that the assessee has utilized interest bearing funds for non- business purposes. The assessee had claimed interest expenses of Rs.12,49,826/-. The Assessing Officer allowed interest expenses to the extent interest income earned i.e. Rs.9,71,852/- and disallowed the remaining i.e. Rs.2,77,974/-. Aggrieved by the assessment order dated 12/02/2016 the assessee filed appeal before CIT(A). The CIT(A) in an ex-parte proceedings dismissed the appeal of assessee. Hence, the present appeal by assessee before the Tribunal.
Shri G.P. Mehta appearing on behalf of the assessee submitted that the CIT(A) has passed ex-parte order. The assessee could not appear before the CIT(A) as the notices were never served on the assessee. The ld. Authorized Representative for the assessee submitted that if an opportunity is allowed to the assessee, he would be able to explain before the CIT(A) with evidence the source for advancing funds.
Shri Sanjay J. Sethi representing the Department submitted that a perusal of impugned order would show that sufficient opportunity of hearing was granted to the assessee by the CIT(A). Repeated notices were sen,t however, the assessee failed to respond to the notices issued by CIT(A).
Both sides heard, orders of authorities below examined. A perusal of the impugned order, para- 4.1 reveals that the CIT(A) had issued notices to the assessee on 28/08/2018 and 21/09/2018 manually. And on 30/01/2019 and 11/03/2019 on ITBA. However, it is not emanating from the order that the notices issued were 3 आअसं. 5164/मुं/2019 (�न.व. 2013-14) (A.Y.2013-14)
served on the assessee. The CIT(A) thereafter proceeded to decide the appeal of the assessee in an ex-parte proceedings. Be that as it may, without commenting on the merits of appeal, we deem it appropriate to restore this appeal back to the file of CIT(A). The assessee is directed to appear before the CIT(A) on receipt of notice and co-operate in first appellate proceedings. The CIT(A) is directed to grant reasonable opportunity of hearing to the assessee before deciding the appeal, in accordance with law.
In the result, appeal by assessee is allowed for statistical purpose.
Order pronounced in the open court on Monday, the 8th day of March, 2021.