M/S. AKSHAYAKALPA FARMS AND FOODS PVT LTD,TUMKUR vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, TUMKUR

None appeared on behalf of the assessee. Even though the notice of hearing was sent by registered post on the prior occasion and it was duly acknowledged by the assessee, yet the assessee did not appear for the hearing. Hence we proceed to dispose of the appeal ex-parte, without the presence of the assessee.

We heard ld DR and perused the record. We noticed that the assessee has not appeared before ld CIT(A) also and hence the first appellate authority was constrained to pass order ex-parte.

The issue contested by the assessee was related to valuation of shares on conversion of compulsory convertible preference shares (CCPS) into equity shares. The assessee had converted CCPS into equity shares of Rs.10 each at price of 17.52. However, the AO determined the FMV of equity shares at 12.80 per share. Accordingly the AO has assessed excess amount aggregating to Rs.50.79 lakhs as income of the assessee u/s 56(2)(viib) of the Act. The ld CIT(A) confirmed the addition and hence the assessee has filed this appeal before the Tribunal.

We have already noticed that the assessee has not appeared before the ld CIT(A) and hence the Ld CIT(A) has passed order ex- parte. However, in the interest of natural justice, we are of the view that the assessee should be provided with one more opportunity to present its case before ld CIT(A). However, the same will be at cost. Accordingly we impose a cost of Rs.5000/- (Rupees Five thousand) upon the assessee which shall be paid to the credit of Income-tax Department as ‘other fees’ within a period of 2 months from the receipt of this order. Subject to the payment of above fees, all the issues contested in the present appeal are restored to the file of ld CIT(A) for adjudicating them afresh, after affording adequate opportunity of being heard to the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.