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Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI
Before: Shri D T Garasia & Shri Rajesh Kumar
O R D E R Per D T Garasia, Judicial Member:
This appeal has been filed by the assessee against the orders of CIT(A)-1, Mumbai, dated 08.02.2011, relating to assessment years 2003-04.
The assessee has raised the following grounds of appeal:
“I. First Ground Appeal 1. The Commissioner of Income tax (Appeals) has erred in confirming the disallowance of business loss amounting to Rs. 2,20,24,623
The CIT (A) has failed to appreciate that the above mentioned business loss is genuine and allowable
3. The appellant prays that the business loss of Rs. 2,20,24,623 be allowed
II. Second Ground of Appeal 1. The Commissioner of Income tax (Appeals) has erred in confirming the disallowance of telephone expenses amounting to Rs. 51,145
2. He failed to appreciate that the residential telephones of the directors are used by the appellant for the purpose of business
3. The appellant prays that the telephone expenses of Rs. 51,145 be allowed.”
2. The assessee s in the business of processing and trading of gem stones and during the year the assessee has had a sales turnover of ` 1,26,30,173/- and other income of ` 92,72,242/-, which includes services charges of ` 72,91,875/- received from Gem House Incorporated, Canada. The assessee has returned business loss of ` 2,41,69,336/- during the year and had earned dividend income of ` 6,69,479/-, which was reflected under the head ‘Income from other sources’. The Assessing Officer disallowed business loss of ` 2,20,24,623/- and telephone expenses of ` 51,145/-. On appeal, the CIT(A) dismissed the ground pertaining to business loss observing as under:
“4.1. In the course of appellate proceedings, the appellant AR has filed written submission vide letter dt. 11.11.2010. have taken note of the appellant AR’s submission which has been submitted by the appellant in detail. Having taken note of the AO's order as well as Appellant AR’s submission, I find that the appellant has re- iterated the same fact as before the AO and the appellant could not adduce any justification for having incurred so much loss. Even, I find that the appellant could not rebut the finding of the AO. In view of the above, I do not find force in the appellant’s submission. Hence, the appellant’s this ground of appeal is dismissed.
During the course of hearing, the leaned AR fairly conceded that the CIT(A) has not applied his mind while deciding the issue regarding loss.
Though the assessee has given justification for claiming the loss the CIT(A) has not examined the facts of the case and has not passed a speaking order.
Therefore, the matter may be restored to the CIT(A) to pass a speaking order as per section 251C of the Act. The learned DR relied on the orders of the authorities below.
We have heard the rival contentions and have perused the record as well as the orders of the lower authorities. We find that as per section 251(1)of the I.T.Act, while disposing of an appeal, the CIT(A) shall have the power to confirm, reduce, enhance or annul the assessment. As per section 251(1)(c), the CIT(A) may pass such orders in the appeal as he thinks fit.
But as per section 250(6), the CIT(A) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. We find that in this appeal the CIT(A) has the power to dispose of the appeal but he has not passed the order as per section 250(6). Therefore, in the interest of justice and fair play, we restore this issue back to the file of the CIT(A) with a direction to pass a speaking order.
As ground no.1 is restored to the CIT(A), we restore ground 2 also to his file to pass an order as per rules.
In the result, the appeal is allowed for statistical purpose.
Order pronounced in the open court on 22nd day of September, 2017.