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Income Tax Appellate Tribunal, ‘C’ (SMC
Before: SHRI ABRAHAM P. GEORGE & SHRI DUVVURU RL REDDY]
आदेश / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:-
In this appeal filed by the assessee, which is directed against an order dated 20.12.2017 of ld. Commissioner of Income Tax (Appeals)-7, Chennai, it has taken the following grounds:-
ITA No.677/2018 :- 2 -:
The authorities below erred in passing the orders ex-parte without affording reasonable opportunity and in determining the total income of the appellant at ₹13,36,634/- against Rs. returned. 2.The appellant submits that the notices were issued both by the assessing officer and the Commissioner of Income-tax (Appeals) at Nethaji Street, Anna Nagar instead of the correct address of 12th Street, Anna Nagar and the appellant had never received any notices from the department and thus prevented by reasonable cause from responding to the various notices sent by the department. 3.The authorities below erred in disallowing 20% of the wages and labour claimed on estimated basis when the expenses are fully vouched and quite reasonable having regard to the turnover of the appellant and the nature of business carried on by her. 4. The authorities below erred in disallowing mortgage loan interest of Rs.2,40,823/-.
5. The appellant submits that the mortgage loan was used in the business of the appellant and therefore the interest is clearly admissible as deduction u/s 36(1 )(iii) of the Act 6. The appellant therefore prays that the assessment may be set aside to the assessing officer to complete the assessment afresh after providing reasonable opportunity and to delete the additions made in the assessment and render justice’’.
Ld. Counsel for the assessee submitted that ld. Assessing 2.
Officer had completed the assessment u/s.144 of the Income Tax Act, 1961 (in short ‘’the Act’’) by making a disallowance of 20% of the ITA No.677/2018 :- 3 -: expenditure claimed under the heads wages, labour charges and salaries. Apart from that, as per the ld. Authorised Representative, the whole of the mortgage loan interest was also disallowed.
Contention of the ld. Authorised Representative was that assessee could not appear before ld. Assessing Officer as well as ld. Commissioner of Income Tax (Appeals) due to wrong address being mentioned in the notices issued by these authorities. As per the ld. Authorised Representative, if given an opportunity assessee would be able to show that expenditure incurred by it in its civil contract and real estate business was correct with necessary evidence. Ld. Authorised Representative also gave an undertaking that assessee would enter appearance before lower authorities without fail.
Per contra, ld. Departmental Representative submitted that 3.
despite number of opportunities given, assessee had failed to enter appearance before ld. Assessing Officer or ld. Commissioner of Income Tax (Appeals). As per the ld. Departmental Representative, assessee also did not intimate change of address.
We have considered the rival contentions and perused the orders of the authorities below. It is true that assessment was ITA No.677/2018 :- 4 -:
completed u/s.144 of the Act for want of co-operation from the assessee. However, ld. Assessing Officer does mention in his order that ld. Authorised Representative of the assessee had appeared before him and filed certain details. Nevertheless, it seems assessee did not respond to a show cause notice issued on 24.12.2010. Ld. Assessing Officer had disallowed 20% on the wages, labour charges and salaries and whole of the mortgage loan interest. Though several notices, were issued by ld. Commissioner of Income Tax (Appeals) during the appeal proceedings, nobody appeared. However ld. Commissioner of Income Tax (Appeals) allowed mortgage loan interest of �1,50,000/-, while sustaining the other disallowances. Nevertheless, considering the undertaking given by the ld. Counsel for the assessee, we are of the opinion that assessee can be given one more opportunity for explaining its case before ld.CIT (Appeals) with necessary evidence.
Assessee shall without fail enter appearance before ld. Commissioner of Income Tax (Appeals) on the date of hearing. Ld. Commissioner of Income Tax (Appeals) shall proceed in accordance with law, whether or not assessee enters appearance on the scheduled date of hearing.
Assessee forthwith has to intimate in writing to the ld. Assessing Officer as well as ld. Commissioner of Income Tax (Appeals) its new address. With these observations, we set aside the order of the ITA No.677/2018 :- 5 -: ld. Commissioner of Income Tax (Appeals) and remit the case back to his file for consideration afresh in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced on Thursday, the 9th day of August, 2018, at Chennai.