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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI G. MANJUNATHA
The captioned appeal has been filed by the assessee challenging the order dated 13thNovember 2018, passed by the learned Commissioner of Income Tax (Appeals)–28, Mumbai, pertaining to the assessment year 2013–14.
When the appeal was called for hearing, no one was present on behalf of the assessee to represent the case. There is no application
2 Shri Vinod Kumar U. Agrawal seeking adjournment either. Accordingly, we proceed to dispose off the appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record.
The dispute in the present appeal is confined to the addition made of ` 21,50,000, as unexplained expenditure under section 69C of the Income Tax Act, 1961 (for short "the Act").
Brief facts are, the assessee is an individual and is engaged in the business of trading in textile. For the assessment year under dispute, the assessee filed his return of income on 4th March 2014, declaring total income of ` 8,56,540. In the course of assessment proceedings, the Assessing Officer noticed that as per the information received from the DGIT (Inv.), Surat, in the course of a survey operation conducted under section 133A of the Act, in case of one Shri Hari M. Pherwani, on 10th April 2013, it was found that the assessee has transferred fund through RTGS aggregating to ` 21,52,100, to two proprietary concerns of Shri Hari M. Pherwani, and has immediately received back the cash on clearance of the cheques. When confronted with the aforesaid information, the assessee submitted that the payment made was for purchase of goods. On the basis of submissions made by the assessee, the Assessing Officer called upon the assessee
3 Shri Vinod Kumar U. Agrawal to furnish the details of purchases such as purchase bills, payment details, vehicle details, lorry receipt, gate pass, cost inward and outward note, cost movement register, bank statement, etc. Not being satisfied with the evidences filed by the assessee and relying upon the information available on record including the statement recorded from Hari M. Pherwani, the Assessing Officer ultimately concluded that the claim of the assessee that payment made was towards purchases is unbelievable and assessee has obtained accommodation entries. Accordingly, treating the purchases of ` 21,50,000, as bogus, the Assessing Officer added back to the income of the assessee as unexplained expenditure under section 69C of the Act. Though, the assessee contested the aforesaid addition before learned Commissioner (Appeals), however, he was unsuccessful, as the addition made was sustained.
We have considered the submissions of learned Departmental Representative and perused the material on record. As could be seen from the impugned order of learned Commissioner (Appeals), since the assessee failed to appear before the first appellate authority to represent his case on various dates fixed for hearing of appeal, he proceeded to dispose off the appeal ex–parte by sustaining the addition made by the Assessing Officer. While doing so, learned Commissioner (Appeals) has observed that the assessee failed to lead
4 Shri Vinod Kumar U. Agrawal any evidence to prove the genuineness of purchases, hence, the addition has to be sustained. It is further noticed, though, in Para–2.1 of the appeal order, learned Commissioner (Appeals) has referred to four occasions on which the appeal was fixed for hearing, however, it is not forthcoming whether any notice of hearing was issued to the assessee and, if issued, whether they were served on the assessee. Considering the fact that learned Commissioner (Appeals) has sustained the addition made by the Assessing Officer on account of non–genuine purchases due to lack of representation by the assessee and in the absence of any corroborative evidence filed by him to prove the purchases, we are inclined to grant one more opportunity to the assessee to prove his case before learned Commissioner (Appeals). For enabling the assessee to do so, we set aside the impugned order of learned Commissioner (Appeals) and restore the issue back to his file for fresh adjudication after due opportunity of being heard to the assessee. Further, we make it clear, the assessee should act in a diligent manner in representing his case before learned Commissioner (Appeals) and co–operate in finalizing the proceeding. With the aforesaid observations, the grounds are allowed for statistical purposes.
5 Shri Vinod Kumar U. Agrawal
In the result, appeal is allowed for statistical purposes. Order pronounced in the open Court on 04.03.2020