UDHAN KUMAR CHORDIA,CHENNAI vs. ACIT NON CORPORATE CIRCLE 6, CHENNAI

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ITA 2343/CHNY/2017Status: DisposedITAT Chennai08 January 2018AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not given sufficient opportunity to present its case before the CIT(A) due to multiple adjournments. Therefore, the order of the CIT(A) was set aside.

What were the facts?

The assessee declared income from other sources and suo motu disallowed a portion under Section 14A. The Assessing Officer made a further disallowance, which the assessee contested. The CIT(A) dismissed the appeal without a full hearing.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without granting adequate opportunity to the assessee to substantiate its claim regarding interest expenditure.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ (SMC

Before: SHRI ABRAHAM P. GEORGE]

आदेश / O R D E R

1.

Assessee in this appeal assails an order dated 25.07.2017 of ld. Commissioner of Income Tax (Appeals)-5, Chennai for the impugned assessment year.

Ld. Counsel for the assessee submitted that assessee had 2. shown a sum of Rs.30,57,332/- under the head ‘’income from other

ITA No.2343/Mds/2017. :- 2 -: sources’’ including disallowance of Rs.15,73,466/- made by the assessee suo motu, u/s.14A of the Income Tax Act, 1961 (in short ‘’the Act’). As per the ld. Authorised Representative against the above sum of �15,73,466/-, assessee had set off interest expenditure and declared Nil income. Contention of the ld. Authorised Representative was that the interest expenditure claimed for set-off was incurred for earning the income shown under the head ‘’other sources’’. As per the ld. Authorised Representative a further disallowance of Rs.15,73,466/- was made by the ld. Assessing Officer and this resulted in a double whammy. Further, as per the ld. Authorised Representative, ld. Commissioner of Income Tax (Appeals) did not give the assessee sufficient opportunity to represent its case and had dismissed its appeal without hearing it.

3.

Per contra, ld. Departmental Representative submitted that assessee could not show what was the interest paid by it and how it was related to the income shown by it under the head ‘’income from other sources’’. Further, according to him, assessee was given three chances by ld. Commissioner of Income Tax (Appeals) for presenting its case, but did not care to appear. As per ld. Departmental

ITA No.2343/Mds/2017. :- 3 -:

Representative, ld. Commissioner of Income Tax (Appeals) was justified in confirming the disallowance.

4.

I have considered the rival contentions and perused the orders of the authorities below. What I find is the appeal was posted for hearing by the ld. Commissioner of Income Tax (Appeals) three times viz on 11.05.2017, 07.06.2017 and 11.07.2017. In each such instance assessee had filed an adjournment letter. This is clearly mentioned by the ld. Commissioner of Income Tax (Appeals) in his order. Ld. Commissioner of Income Tax (Appeals) had proceeded to decide the matter based on materials available on record since according to him assessee was guilty of laches. Now the contention of the assessee before me is that proper opportunity was not given by the ld. Commissioner of Income Tax (Appeals) for substantiating its case. Ld. Authorised Representative has undertaken to appear before the ld. Commissioner of Income Tax (Appeals) if given one more chance and explain the case before ld. Commissioner of Income Tax (Appeals). In the facts and circumstances of the case, I am of the opinion that assessee can be given one more chance for entering appearance before the ld. Commissioner of Income Tax (Appeals) and explaining its case. I set aside the order of the ld. Commissioner of ITA No.2343/Mds/2017. :- 4 -:

Income Tax (Appeals) and remit the appeal back to the ld. Commissioner of Income Tax (Appeals) for consideration afresh in accordance with law.

In the result, appeal of the assessee is allowed for statistical 5. purpose. Order pronounced on Monday, the 8th day of January, 2018, at Chennai.

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