GUJU ADS P.LTD,MUMBAI vs. DCIT 10(3), MUMBAI

The assessee has filed the present appeal against the order dated 01.03.2016, passed by the Commissioner of Income Tax (Appeals)-24 Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the AY. 2010- 11.

The assessee has raised the following grounds: - 8. On facts and circumstances of the case and in interest of natural justice matter be remanded back to learned Assessing Officer for assessment de novo given that authorized representative did not appear before learned Assessing Officer and learned CIT(A) in absence of assessee knowledge.

On facts and circumstances of the case learned CIT(A) erred in rejecting sales agreement of Flat No 618 and Flat No 2803 and thereby adopted higher sales consideration than what has been actually received by The Appellant company.

On facts and circumstance of the case learned CIT(A) erred in not granting indexation benefit on sale of Flat No 317 which was a long term capital asset sold by the Appellant company. 11. On facts and circumstances of the case learned CIT(A) erred in considering Flat No 317 as short-term capital asset and taxed the same at higher rate as against rate of 20% applicable on sale of long term capital asset 12. On facts and circumstances of the case learned CIT(A) erred in upholding disallowance of interest of INR 3,32,174 in respect of interest free loan given to shareholder out of total finance expenses incurred without appreciating that Appellant company had surplus interest free funds available.” 3. The brief facts of the case are that the assessee filed its return of income on 18.10.2010 declaring total income to the tune of Rs.80,44,677/-. The return was process u/s 143(2) of the I.T. Act, 1961. Thereafter, notice u/s 143(2) of the Act was issued on 29.08.2011 which was served upon the assessee. Subsequently, fresh notice u/s 143(2) of the Act was issued and served upon the assessee. Notice u/s 142(1) of the Act dated 13.08.2012 was also issued and served upon the assessee. The assessee company was in the business of advertisement agency. The assessee has shown the debited amount of Rs.41,50,081/- under the head loss on sale of assets. According to Section 50 of the Act, the said loss was not allowable, therefore, an amount of Rs.41,50,081/- was added to the income of the assessee. The assessee also sold the 6 property whose description are hereby mentioned below.: - Sr. No. Property Description Sale Price (Rs.) Municipal Value(Rs.) Difference (Rs.)

The property mentioned at serial nos. 2, 3, & 5 was sold below the Municipal value. Therefore, the transaction was liable to be re-viewed in view of provision of Section 50C of the Act. Therefore, notice was given and after getting the reply, the difference to the tune of Rs.24,65,370/- was added to the income of the assessee. In connection with the flat at Runwal no sale agreement was furnished, therefore, the cost was taken to the tune of Rs.79,93,151/- and the same was added to the income of the assessee. The sale agreement in connection with the office no. 618 at Nirmal Corporate Park to the tune of Rs.86,75,000/- was not produced, therefore, the said cost was also added to the income of the assessee. Therefore, the total short term capital was assessed to the tune of Rs.49,12,491/-. The assessee has also given the loan to Smt. Jayaben Bhinde of Rs.20,67,555/- and on the said loan no interest was charged, therefore, the comparable

At the very outset, the Ld. Representative of the assessee has argued that the CIT(A) has decided the matter of controversy in the absence of the assessee, therefore, in the said circumstances, the order in question is not justifiable and is liable to be set aside. It is also argued that the assessee wants to represent his case before the CIT(A) and wants to adducted the additional evidence in support of his claim, therefore, an opportunity of being heard is required to be given in accordance with law. On appraisal of the order dated 01.03.2016 passed by the CIT(A)-25 Mumbai, we noticed that the said order has been passed by the CIT(A) in absence of both the parties and the assessee nowhere got any opportunity to adduce the evidence of any kind in support of his claim. It is clearly violation of the principle of natural justice. Therefore, in the said circumstances, we set aside the finding of the CIT(A) on all the issues and remand the case before the CIT(A) to decide the matter afresh by giving an opportunity of being heard to the assessee in accordance with law.