What did the Tribunal hold?

The Tribunal noted that the lower authorities did not examine the assessee's balance sheet and other details before making the addition. Therefore, the issue was remanded for re-adjudication after payment of costs by the assessee.

The assessee's appeal concerns an addition of Rs. 5,85,00,000/- for unexplained investments. Both lower authorities finalized the assessment ex parte under Section 144 of the Act. The assessee claimed that a significant portion of the investment was an opening balance from the previous year.

What were the issues?

Whether the lower authorities erred in making an addition for unexplained investments without examining the assessee's financial documents, especially when the assessment was completed ex parte.

Radix Dealcom Pvt. Ltd. vs ITO | ITAT Kolkata 2018

Income Tax Appellate Tribunal, “D” BENCH : KOLKATA

Before: Hon’ble Shri J. Sudhakar Reddy, AM & Shri S.S. Godara, JM]

Hearing: 18.12.2018Pronounced: 28.12.2018

ORDER Per S.S. Godara, JM

This assessee’s appeal for assessment year 2014-15 arises against the CIT(A)-2, Kolkata’s order dated 09.01.2018 passed in case no. 10762/CIT(A)-2/16-17, involving proceeding u/s 144 of the Income Tax Act, 1961 (in short the ‘Act’). Heard both the parties. Case file perused.

The assessee’s sole substantive grievance raised in instant appeal challenges both the lower authorities’ action making unexplained investments addition amounting to Rs. 5,85,00,000/- during the course of assessment as affirmed in lower appellate proceedings. We notice at the outset that both the lower proceedings have been finalized ex parte against the assessee u/s 144 of the Act. The assessee did not appear in lower appellate proceedings as well.

Radix Dealcom Pvt. Ltd. A.Yr.2014-15

Learned counsel for the assessee files before us its balance sheet as on 31.03.2014, P & L A/c as well as notes to accounts. Page 6 of the Paper Book states that assessee’s investments in mutual funds as on 31.03.2014 to be Rs. 5.85 crores in issue and opening balance thereof is Rs. 4.5 crores as carried forward from 31.03.2013. His case therefore is that both the lower authorities have ignored the most vital fact of the impugned investment to the tune of Rs. 4.5 crores as not to have been made in the relevant previous year. The Revenue on the other hand strongly supports both the lower authorities action invoking the impugned addition.

We have given our thoughtful consideration to the rival contentions. It emerges at the outset that neither the Assessing Officer nor CIT(A) have examined the assessee’s balance sheet / other details before making the impugned addition in its hands. The fact also remains that the assessee had chosen not to appear either before Assessing Officer or the CIT(A). We therefore deem it appropriate that the instant sole issue needs to be re- adjudicated as per law subject to payment of cost from the tax payer in department’s favour to the tune of Rs. 5000/-. The Assessing Officer shall finalize the consequential proceedings as per law after affording adequate opportunity of hearing to assessee.

The assessee’s appeal is allowed for statistical purposes in above terms.

Order pronounced in the Court on 28.12.2018

RADIX DEALCOM PVT. LTD.,KOLKATA vs. ITO, WARD - 4(1), KOLKATA, KOLKATA

What did the Tribunal hold?

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