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Facts
The assessee appealed against the CIT(A)'s order concerning the assessment year 2015-2016. The core contention was that the lower authorities failed to acknowledge the assessee's claim of having sufficient cash to cover commission expenses related to the sale of property.
Held
The Tribunal found the lower authorities' reasoning for disallowing the expenses, based on the belief that no one keeps cash for long periods for future expenses, to be implausible. Consequently, the matter was remitted back to the Assessing Officer for a fresh examination of the assessee's cash availability and to provide a meaningful opportunity for the assessee to present their case.
Key Issues
Whether the lower authorities correctly disregarded the assessee's claim of cash availability for commission expenses, and if the matter should be remanded for re-examination.
Sections Cited
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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
Asst.Year 2015-2016 Sri.Varkey Mattathil Joseph The Assistant Commissioner Mattathil, Pala of Income-tax, v. Kottayam – 686 575. Kottayam. PAN : ACEPJ1257E. (Appellant) (Respondent) Appellant by :Sri.Prasanth Srinivas, CA Respondent by : Smt.Leena Lal, Sr.AR Date of Pronouncement : 19.02.2025 Date of Hearing : 20.01.2025. O R D E R Per Prakash Chand Yadav, JM :
The present appeal of the assessee is arising from the order of the learned Commissioner of Income-tax (Appeals) dated 15thFebruary, 2024 and relates to the assessment year 2015-2016 having DIN & Order No.ITBA/NFAC/S/250/2023- 24/1060993414(1).
At the outset, the learned Counsel for the assessee craved that one more opportunity before the Assessing Officer on the ground that both the authorities have erred in not appreciating that there was sufficient cash with the assessee in order to meet the commission expenses incurred by the assessee with respect to the sale of the property.
We have heard the rival submissions and perused the material available on record. We observe that both the lower authorities, i.e., the AO and the CIT(A) have simply gone away by saying that no person can keep cash for a long time for meeting future expenses. We are of the firm view that this reasoning is not at all a plausible reason and therefore in the interest of justice we remit the matter back to the file of the AO for examining afresh after considering the availability of cash withdrawal by the assessee. Needless to say, the AO shall afford meaningful opportunity to the assessee before passing any view.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 19th day of February, 2025.