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Facts
The assessee received compensation for letting out shop premises, classifying it under 'Income from House Property'. The Assessing Officer (AO) reclassified this as 'Income from Other Sources'. The CIT(A) dismissed the assessee's appeal ex parte, affirming the AO's view, as the assessee failed to furnish required documents despite multiple opportunities.
Held
The Tribunal noted the ex parte order by the CIT(A). In the interest of justice and fair play, the matter was remitted back to the CIT(A) for a de novo adjudication. The CIT(A) was directed to provide reasonable opportunities to the assessee for submissions and to call for a remand report if necessary, with the assessee also urged to be diligent.
Key Issues
Whether the income from letting out premises and amenities should be taxed as 'Income from House Property' or 'Income from Other Sources', and the validity of the ex parte order passed by the CIT(A).
Sections Cited
143(3) of the Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH MUMBAI
Before: AND SHRI GIRISH AGRAWAL
O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: These both appeals filed by the assessee are against the orders of Ld. CIT(A)-52, Mumbai vide order nos. ITBA/APL/S/250/2023- 24/1058647530(1) and ITBA/APL/S/250/2023-24/1058646292(1), dated 11.12.2023 passed against the assessment orders by Deputy Commissioner of Income Tax, Central Circle 4(2), Mumbai, u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 30.08.2016 for AY 2014-15 and 19.01.2016 for AY 2013-14.
Both the appeals are on identical issues, except for variation in quantum of addition. Therefore, both these appeals are taken up together for adjudication by passing a consolidated order. The issue involved is in respect of the addition made by the ld. Assessing Officer towards compensation received by the assessee against various amenities and services provided in respect of letting out of premises by 2 & 572/MUM/2024 Rajdeep Construction Pvt Ltd., AY 2014-15 & 2013-14 treating it as income from other sources instead of income from house property. We draw facts from the appeal in Assessment Year 2014-15. Return of income was filed on 20.09.2014 reporting total income of Rs.89,51,820/-. In the year under consideration, assessee has given shop premises on rent basis to Yes Bank (Licensee) vide Leave and Licence Agreement and provision of Service Agreement, both dated 31.05.2011. Assessee received compensation against these agreements which was offered to tax under the head ‘Income from House Property’ in the return filed by the assessee. However, ld. Assessing Officer treated the same as income from other sources, since assessee could not furnish required documents and details. Aggrieved, assessee went into appeal before the ld. CIT(A).
From para 9 of the order of the ld. CIT(A), it is noted that multiple opportunities were given to the assessee to make its submission, however, on most of the dates, assessee sought adjournment, which were granted. Assessee could not comply with the requirements for substantiating its claim. In absence of any submission from the assessee, ld. CIT(A) considered the statement of facts and other material on record to hold the Assessing Officer has rightly brought a sum of Rs.64,50,000/- to tax as income from other sources. Thus, he dismissed the appeal by passing an ex parte order. Aggrieved, assessee is in appeal before the Tribunal.
Before us, the Ld. Counsel for the assessee at the outset prayed for remitting the matter to the file of Ld. CIT(A), so as to afford an opportunity of making all the required submissions alongwith documentary evidences and justify the claim made in the return.
Per contra, Ld. Sr.DR objected on the prayer so made.
3 & 572/MUM/2024 Rajdeep Construction Pvt Ltd., AY 2014-15 & 2013-14 6. We have heard the rival contentions and perused the material available on record. We note that assessee had made detailed submis- sions before the Assessing Officer though adverse view was taken by him. Assessee could not represent its case effectively on the dates of hearing fixed by the Ld. CIT(A). It has sought adjournments on several occasions. Since the order have been passed ex parte by the Ld. CIT(A), in the interest of justice and fair play, we find it appropriate to accept the prayer made by the ld. Counsel, so as to remit the matter back to the file of ld. CIT(A) for denovo meritorious adjudication of the grounds of appeal taken at the 1st appellate stage. We direct the ld. CIT(A) to provide reasonable opportunities to the assessee for making his submissions and also call for remand report from the Assessing Officer, if so required. We direct the assessee also, to be diligent in at- tending the hearings fixed for the appeal and assist in its expeditious and effective disposal. Assessee should not seek adjournments unless warranted by compelling reasons.
7. In the result, both the appeals of the assessee are allowed for statistical purposes.
Order is pronounced in the open court on 24 June, 2024