DEEPAK KUMAR KANJIBHAI PATEL,MUMBAI vs. ITO 24(1)(5), MUMBAI

Learned CIT(A) erred in mechanically confirming the brought forward credit balance on account of purchase added by the AO to the extent of Rs.8475322/-.

Learned CIT(A) erred in confirming the adhoc disallowance of deposits and withdrawals made by the AO on peak basis amounting to Rs.2410825/-. A.Y.2012-13

Learned CIT(A) erred in confirming the adhoc disallowance of additions to the fixed assets made by AO amounting to Rs.17500/- and 60% of depreciation amounting to Rs.5250/-.

The appellant craves to leave, to amend, alter, to vary or modify any of the above grounds of appeal.”

The brief facts of the case are that the assessee filed his return of income on 13.09.2012 declaring total income to the tune of Rs.16,02,123/-. The return was processed u/s 143(1) of the I.T. Act, 1961. The case was selected for scrutiny under CASS. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee was deriving income from business or profession. On verification, it was found that the assessee has sundry creditors to the extent of Rs.9,25,06,738/-. The necessary information from the assessee was called but the assessee failed to reconcile the creditors in sum of Rs.84,75,322/-, therefore, the credit in sum of Rs.84,75,322/- was disallowed and added to the income of the assessee. The assessee also deposited a sum of Rs.24,10,825/- on 25.08.2011 in his account lies at HDFC. The same was not disclosed in the relevant assessment year. The same was also added to the income of the assessee. The assessee also purchased the machinery and plant eligible for depreciation to the extent of 60% i.e. of Rs.17,500/-. The relevant details were called but the assessee failed to furnish the bill and invoices of the asset of Rs.17,500/-. Notice was given but assessee failed to substantiate the claim, therefore, the claim in sum of Rs.17,500 and depreciation thereon @ 60% amounting to Rs.5,250/- was disallowed and added to the income of the assessee. The total income of the assessee was assessed to the tune of Rs.1,26,11,020/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who dismissed the appeal of the assessee, therefore, the assessee filed the present appeal before us.

We have heard the argument advanced by the Ld. Representative of the parties and perused the record. In fact, the Ld. Representative of the assessee did not argue the case on merits but argued on this point that the CIT(A) has decided the matter of controversy in absence of the assessee and without giving an opportunity of being heard to the assessee in accordance with law, therefore, the finding of the CIT(A) is not justifiable, hence, is liable to be set aside in the interest of justice. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the order of the CIT(A) dated 01.07.2016 passed by the CIT(A) we find that the CIT(A) has decided the matter of controversy in absence of the assessee/Representative of the Assessee without giving an opportunity of being heard to the assessee in the accordance with law. A proper and reasonable opportunity is required to be given to the assessee before the deciding the matter of controversy in accordance with law.

For this proposition we place reliance upon the following case laws. (1) CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 154 DTR (Bom) 302 (2) CIT Vs. S Chenniappa Mudaliar (1969) 74 ITR 1 (SC)

Accordingly in the interest of justice, we remit the issue raised in the appeal to the file of the Ld. CIT(A). Ld. CIT(A) is directed to consider the issue afresh and pass an order on the merits of the case after giving after giving an proper opportunity of being heard to the assessee in accordance with law. Therefore, we set aside the finding of the CIT(A) on all the issues and restore the matter before the CIT(A) to decide the matter afresh by giving an opportunity of being heard to the assessee in accordance with law.

In the result, the appeal filed by the assessee is hereby ordered to be allowed for statistical purposes. Order pronounced in the open court on 21/08/2019 (AMARJIT SINGH) (M. BALAGANESH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; ददनांक Dated : 21/08/2019. Vijay/Sr. PS आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदध, आयकर अपीलीय अदधकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //// उि/सहधिक िंजीकधर /(Dy./Asstt.