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Income Tax Appellate Tribunal, “G” Bench, Mumbai
Before: Shri S.Rifaur Rehman & Shri Ravish Sood
O R D E R
PER RAVISH SOOD, JM
The present appeal filed by the assessee is directed against the order passed by the CIT(A)-28, Mumbai, dated 11.11.2016, which in turn arises from the order passed by the A.O under Sec.143(3) r.w.s 147 of the Income Tax Act, 1961 (for short „Act‟), dated 10.03.2014. The assessee has assailed the impugned order on the following grounds of appeal: “On the facts and in the circumstances of the case and in law, whether the Id. Commissioner of Income Tax (Appeal) is right in upholding the Assessment Order u/s. 143(3) r.w.s. 147 of the Id. assessing officer, without giving / allowing any opportunity of being heard in the case. On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) has erred in upholding the Assessment Order passed by A.O u/s. 143(3) r.w.s. 147, ignoring the fact that the transaction under issue is covered by exclusion clause of section 2(22)(e) of I.T Act, and appellant's objection for reassessment under this section was disposed off without giving any reason. On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) has erred in confirming the view of the Id. A.O to the extent of advance received from company was deemed dividend under section 2(22)(e) of the LT Act, ignoring the fact that the said amount was received by the appellant for the company's business expansion.
P a g e | Mr. Samir S. Doshi Vs. DCIT-12(2) On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 62,50,000/- (Rupees Sixty-two Iakhs fifty thousand only) made by A.O invoking section 2(22)(e) of the I.T Act, ignoring the fact that the advance amount was actually of Rs. 36,50,000/- (Rupees Thirty-six Iakhs fifty thousand only) only and net of advance was of Rs. 31,75,000/- (Rupees Thirty-one lakhs seventy-five thousand only). On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) has erred in confirming the view of Id. A.O that commission, consultancy and advisory fees declared by appellant under head "Income from Business or Profession in the return, to be taxed under the head "Income from Other Source'. On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of expenditures made by Id. A.O as claimed by appellant against commission, consultancy and advisory fees income declared by the appellant in the return filed under the head Income from Business or Profession". On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax (Appeals) has erred in confirming the error committed by Id. A.O as doubly tax on the income under the head "Income from Business or Profession" declared in the return of Income filed by the appellant and the same income under the head "Income from Other Source" as considered and computed by the learned assessing officer. The Appellant craves leave to submit at the time of hearing such further facts, information, clarification, documents etc. as may be necessary for the purpose of deciding the issues in the appeal. The appellant craves leave to add, alter, amend or modify the aforesaid grounds of appeal
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2. Briefly stated, the assessee had filed his return of income for A.Y. 2008-09 on 30.07.2008, declaring his total income at Rs.33,47,800/-. The return of income filed by the assessee was processed as such under Sec.143(1) of the Act. Subsequently, the case of the assessee was reopened under Sec.147 of the Act.
During the course of the assessment proceedings it was observed by the A.O that the assessee was a registered shareholder with a holding of more than10% in M/s Falcon Brokerage Pvt. Ltd. Observing, that an amount of Rs.62,50,000/- was advanced by the aforesaid company to the assessee, the A.O assessed the same as „deemed dividend‟ under Sec.2(22)(e) of the Act. Apart therefrom, the A.O observed that the assessee had shown certain „Miscellaneous Receipts‟ amounting to Rs.5,75,000/- in his profit and loss account for the year under consideration. it was noticed by the A.O, that the assessee after claiming certain expenses against the aforesaid receipts had accounted for the balance amount as his „business income‟ for the year under consideration. As there was no evidence as regards the nature of receipts which could evidence that the same pertained to any business activity of the assessee, therefore, the A.O subjected the same to tax as the income of the assessee from „Other P a g e | Mr. Samir S. Doshi Vs. DCIT-12(2) sources‟. After inter alia making the aforesaid additions/disallowance, the A.O assessed the income at Rs.1,01,72,820/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee failed to put up an appearance in the course of the appellate proceedings, therefore, the CIT(A) on the basis of an ex-parte order dismissed the appeal.
The assessee being aggrieved, with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short „A.R‟) for the assessee at the very outset of the hearing of the appeal submitted, that the failure on the part of the assessee to put up an appearance in the course of the proceedings before the first appellate authority was for the reason that no notice intimating the hearing of the appeal was ever received by him. It was submitted by the ld. A.R, that a perusal of the order passed by the CIT(A) dated 11.11.2016, therein revealed that the address of the assessee was wrongly mentioned viz. (i) “Samir S. Doshi, 4 & 5 Sai Commercial Building, 82-A Jolly Maker Apt, No.-1, Cuffe Parade, Mumbai – 400 005”. It was submitted by the ld. A.R, that the address of the assessee as was mentioned in the „Form No. 35‟ “Samir S. Doshi, No.82-A, Jolly Maker, Apt. No.1, Cuffe Parade, Mumbai – 400 005”. It was averred by the ld. A.R that apparently, as the notices intimating the hearing of the appeal would also have been forwarded by the office of the CIT(A) at the aforesaid incorrect address, therefore, the assessee who was never put to notice about the date of hearing of the appeal, had thus remained divested of an opportunity for appearing in the course of the proceedings before the said appellate authority. In the backdrop of his aforesaid contention, it was submitted by the ld. A.R that in all fairness the matter may be restored to the file of the CIT(A) for fresh adjudication after affording an opportunity of being heard to the assessee.
Per contra, the ld. Departmental Representative did not controvert the aforesaid claim of the assesses counsel.
We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. As is discernible from the order of the CIT(A), we are in agreement with the claim of the ld. A.R that the address mentioned by the assessee in “Form No.35” is different from that mentioned by the CIT(A) in his order dated