V TEN REALTY PRIVATE LIMITED ,KALYAN vs. DCIT, CIRCLE 14(3)(1), MUMBAI

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ITA 993/MUM/2023Status: DisposedITAT Mumbai31 July 2024AY 2015-16Bench: MS. KAVITHA RAJAGOPAL, JM AN SHRI OMKARESHWAR CHIDARA (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

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.

What were the 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.

What were the 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.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(2),Section 142(1),Section 143(3),Section 115JB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

For Appellant: Shri Subodh Ratnaparkhi
For Respondent: Ms. Rajeshwari Menon
Hearing: 29.07.2024Pronounced: 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.

2.

The assessee has challenged this appeal on the following grounds:

1. 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.

(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.

4.

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.

5.

The assessee was in appeal before the first appellate authority, challenging the order of the ld. A.O.

6.

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.

7.

The assessee is in appeal before us, challenging the order of the ld. CIT(A).

9.

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

(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.

10.

In the result, the appeal filed by the assessee is allowed for statistical purpose.

Order pronounced in the open court on 31.07.2024

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