R.K.MADHANI & CO.,MUMBAI vs. DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-8(1), MUMBAI

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ITA 1471/MUM/2018Status: DisposedITAT Mumbai04 December 2019AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) rejected the assessee's books of account and made an addition on an estimated basis without providing cogent reasons. The Tribunal also noted that the AO did not submit a remand report sought by the CIT(A).

What were the facts?

The assessee firm did not respond to notices from the AO, leading to an ex-parte assessment order. The AO made an addition of Rs. 2,17,82,72,458/-. The CIT(A) partly allowed the appeal, restricting the addition to Rs. 4,52,30,169/-.

What were the issues?

Whether the rejection of books of account and subsequent addition by the CIT(A) were justified without proper reasons and opportunity to the assessee. Whether the assessment order was passed in accordance with the principles of natural justice and settled law.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144,Section 145(3)

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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI

Before: SHRI M. BALAGANESH (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri Anant N. Pai (AR)
For Respondent: Shri D.G. Pansari (DR)
Hearing: 05/09/2019Pronounced: 04/12/2019

O R D E R

PER RAM LAL NEGI, JM

1.

This appeal has been filed by the assessee against the order dated 28.12.2017 passed by the Commissioner of Income Tax (Appeals)-50 (for short ‘the CIT(A), Mumbai, for the assessment year 2014-15, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against the assessment order passed u/s 143 (3) of the Income Tax Act, 1961 (for short the ‘Act’).

2.

Brief facts of the case are that the assessee firm carrying on civil construction for various Govt./Semi Govt. authority, filed its return of income for the assessment year under consideration declaring the total income at Rs. 12,28,44,430/-. Since the case was selected for scrutiny, the AO issued notice u/s 143 (2) and 142 (1) of the Act. However, the assessee did not respond to the same. Accordingly, the AO issued fresh notices u/s 142 (1) on 10.06.2016, 18.07.2016 and 16.08.2016. In response thereof, the authorized representative Assessment Year: 2014-15 requested for transfer the case to Central Circle Mumbai. Accordingly, the case was transferred to Central Circle Mumbai. Fresh notice u/s 142 (1) was issued on 20.10,16 , 03.11.2016 and 15.11.2016, however, in response to the said notices the assessee did not file any reply. Finally, vide notice dated 15.12.16, the assessee was asked to show cause as to why an ex-parte assessment order u/s 144 of the Act should not be passed. Since, the assessee did not comply with any of the notices sent u/s 142 (1) of the Act, the AO proceeded to complete assessment on the basis of material available on record. It was noticed that the assessee had claimed expenditure of Rs. 2,17,82,72,458/- in its P & L account and since, no explanation was given by the assessee, the AO made addition of the said amount to the income of the assessee and determined the total income at Rs. 2,30,11,16,890/-. The assessee challenged the assessment order before the Ld. CIT (A). The Ld.CIT (A) after hearing the assessee, partly allowed the appeal for the statistical purposes and restricted the addition to Rs. 4,52,30,169/-, worked out in its order. Still aggrieved, the assessee is in appeal before the Tribunal.

3.

The assessee has challenged the impugned order passed by the Ld. CIT

(A) on the following effective ground:-

Ground No. 1: On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in rejecting the books of accounts of the Appellant and making an addition to tis business income @ 4,52,30,169/- on estimated basis and without any credible reasons on hand to support the addition. The addition of Rs. 4,52,30,169/- being so made, deserves to be deleted in appeal. Ground No. 2: Without prejudice to the above ground, the Appellant submits that the addition of Rs. 4,52,30,169/- is any case excessive and deserves to be reduced in appeal. Ground No. 3: The learned Commissioner (Appeals) also erred in passing his order without granting the Appellant an adequate opportunity of being heard. Assessment Year: 2014-15 The orders passed by him is in contravention of the principles of natural justice and hence, bad in law.

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