What did the Tribunal hold?

The Tribunal found that the CIT(A)'s order was non-speaking and did not adjudicate the issues on merits. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

The assessee contested the disallowance of project expenses capitalized to construction work in progress. The assessee argued that the CIT(A) passed a non-speaking order without providing adequate opportunity and without considering documentary evidence.

What were the issues?

Whether the CIT(A) passed a non-speaking order and denied the assessee adequate opportunity to present its case regarding the disallowance of project expenses.

Mazda Realty P.Ltd vs ITO | ITAT Mumbai 2017

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-5, Mumbai, [in short CIT(A)] in appeal No. IT-181/12-13/100/13-14 dated 27.12.2013. The Assessment was framed by Income Tax Officer, Ward-2(2)(3), Mumbai (in short ITO or AO) for the assessment year 2010-11 vide order dated 26-11-2012 under section 143(3) of the Income Tax Act, 1961(hereinafter ‘the Act’).

At the outset, it is noticed that the main objection of the assessee is that the CIT(A) has adjudicated the issue without providing adequate opportunity to the assessee and that the CIT(A) has passed a totally non- speaking order. We find that the assessee has raised the following three grounds:

Mazda Realty Pvt. Ltd.(AY 10-11) The following grounds are submitted without prejudice to one another

On the facts and in the circumstances of the case and in law, the Learned CIT (Appeals) erred in confirming the 100% disallowances of Project expenses capitalised to Construction work in progress of Rs.53,00,208/- on the ground that no books of accounts, relevant bills, vouchers were produced without going into the facts of the case and also your appellant fails to failed to prove the genuineness of the expenses.

2. On the fact and in the circumstances of the case, the Learned CIT (Appeals) erred in not considering your appellant plea that disallowance of various Project expenses of Rs.53,00,208/-, was without opportunity being given to your appellant and/or without issuing any show cause notice for disallowance of expenses which amount to non- compliance and against fair justice of law.

3. On the fact and in the circumstances of the case, the Learned CIT (Appeals) erred in confirming the disallowances of various Project expenses of Rs.53,00,208 without considering the documentary evidence produced and also without cross examined the creditors.

When this was pointed out, the learned Senior DR went through para No.4 of the CIT(A) order, wherein it has been observed as under:

“4.………. The submissions filed finds place in Para 3 of this order. The issue is considered. In my considered view, ongoing through the details it is seen that the assessee was given ample

Mazda Realty Pvt. Ltd.(AY 10-11) opportunities by the AO, but still the assessee failed to produce the books of accounts and relevant bills and vouchers and prove the genuineness of the expenses. In view of the given facts, no interference is called for in AO's order. The Grounds raised by the assessee are rejected.”

From the above, it is clear that the CIT(A)’s order is non-speaking and none of issues has been adjudicated on merits. We, therefore, restore the matter back to the file of the Assessing Officer for fresh adjudication. The Assessing Officer will decide the issue in accordance with law.

In the result, the appeal of assessee is allowed for statistical purposes.

Order pronounced in the open court on 25-10-2017.

MAZDA REALTY P.LTD,MUMBAI vs. ITO 2(2)(3), MUMBAI

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