V TEN REALTY PRIVATE LIMITED ,KALYAN vs. DCIT, CIRCLE 14(3)(1), MUMBAI
Facts
The assessee, engaged in real estate, filed its return of income and its case was selected for scrutiny. The Assessing Officer disallowed interest expenditure of Rs.37,10,502/- on unsecured loans from directors as part of the cost of the project.
Held
The assessee failed to appear or provide necessary documents before the first appellate authority, leading to an ex-parte order upholding the AO's decision. The tribunal observed the assessee's non-compliance and decided to grant one more opportunity.
Key Issues
Whether the appeal should be dismissed ex-parte due to non-compliance, or if the assessee should be given another opportunity to present its case and whether the disallowance of interest expenditure was justified.
Sections Cited
250, 143(2), 142(1), 143(3), 115JB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI
BEFORE MS. KAVITHA RAJAGOPAL, JM AN SHRI OMKARESHWAR CHIDARA, AM
ITA No.993/Mum/2023 (Assessment Year: 2015-16) V Ten Realty Private Limited DCIT, Circle 14(3)(1) V10 Residency, Ground Floor, Mumbai Near Kankavati Apartment, Vs. Rambaug Lane No.4 End,Chikanghar, Kalyan (W), Thane-421 301 PAN/GIR No. AADCV 9641 E (Assessee) (Respondent) : Assessee by : Shri Subodh Ratnaparkhi Respondent by : Ms. Rajeshwari Menon Date of Hearing : 29.07.2024 Date of Pronouncement : 31.07.2024
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned
Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal
Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'),
pertaining to the Assessment Year (‘A.Y.’ for short) 2015-16.
The assessee has challenged this appeal on the following grounds:
The Hon. CIT(A) erred in dismissing the appeal ex-parte for alleged non- compliance to appeal notices, inspite of the appellant being not aware of the notices issued and for this reason the order dismissing the appeal was not justified and may kindly be over turned and set aside. 2. The Hon. CIT (A) erred in dismissing the appeal ex-parte, for alleged non-compliance to hearing notices, without deciding the appeal on the merits and for this reason also the order of the Hon. CIT(A) is bad-in-law and required to be set aside. 3. The Hon. CIT (A) erred in confirming the addition of Rs.37,10,502/- made by the ld AO by disallowing interest expenditure debited to P & L account, which action of ld AO is not as per law and the consequent addition may kindly be deleted.
2 ITA No. 993/Mum/2023 (A.Y.2015-16) V Ten Realty Private Limited vs. DCIT 3. The brief facts are that the assessee company is engaged in the business of real
estate activities with owned and leased properties. The assessee had e-filed its return of
income on 30.09.2015, declaring total income at Rs.36,77,900/- and computed book
profit u/s. 115JB at Rs.36,70,270/-. The assessee’s case was selected for scrutiny
assessment and notices u/s. 143(2) and 142(1) of the Act were issued and served upon the
assessee.
The ld. Assessing Officer ('A.O.' for short) observed from the balance sheet that
the assessee has taken unsecured loans of Rs.4,97,24,452/- from its Directors and has
debited interest expenses of Rs.37,10,502/- in profit and loss account. The ld. A.O.
passed the assessment order u/s. 143(3) of the Act on 16.12.2017, determining the total
income at Rs.73,88,399/- by disallowing the interest expenditure as being part of the cost
of the project.
The assessee was in appeal before the first appellate authority, challenging the
order of the ld. A.O.
The ld. CIT(A) vide an ex parte order upheld the order of the ld. A.O. on the
ground that the assessee has failed to furnish any explanation or supporting documents to
substantiate its claim.
The assessee is in appeal before us, challenging the order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on
record. It is observed that the assessee has been non compliant throughout the
proceeding before the first appellate authority and had failed to furnish any explanation
3 ITA No. 993/Mum/2023 (A.Y.2015-16) V Ten Realty Private Limited vs. DCIT along with any supporting documentary evidence in support of its claim. The ld. CIT(A)
has also not decided the issue on the merits of the case for the above mentioned reason. In
view of the same, we are of the considered opinion that the assessee shall be given one
more opportunity to present its case before the first appellate authority in view of the
principles of natural justice with the direction that the assessee should cooperate with the
proceeding before the ld. CIT(A) without any undue delay.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 31.07.2024
Sd/- Sd/-
(Omkareshwar Chidara) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 31.07.2024 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai
