ITO 25(2)(3), MUMBAI vs. SANJAYKUNWAR R .RATHOD, MUMBAI

None appeared on behalf of the assessee even though the date of hearing was noted by the assessee on the last occasion. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee.

We have heard learned Departmental Representative and perused the record. The assessee had declared business income u/s. 44AD of the Act estimating the income at the rate of 9.08% of the contract receipts of ` 37,98,050/-. In order to verify the veracity and correctness of the claim of carrying on business activity, the Assessing Officer issued summons to the 2 Smt. Sanjaykunwar R. Rathod assessee two times, but the assessee failed to appear before the Assessing Officer. Hence the Assessing Officer assessed the entire amount of contract receipts of ` 37,98,050/- as income of the assessee. The learned CIT(A) deleted the same on the reasoning that payer of the contract amount has deducted tax u/s. 194C of the Act hence there is no reason to doubt or question the head of income in this case. Aggrieved, the Revenue has filed this appeal before us.

We have noticed that the learned CIT(A) did not address the point of the AO that the assessee has failed to prove that she carried on contract works. On the contrary, the learned CIT(A) appears to be under the impression that the issue before her was related to the head of income under which the above said amount was chargeable, i.e., the assessee is questioning the assessment of contract receipts of ` 37.98 lakhs under the head “income from other sources”. Accordingly, the learned CIT(A) has expressed the view that there is no reason to doubt or question the head of income in the instant case when TDS has been deducted u/s. 194C of the Act. Thus, we noticed that the learned CIT(A) has failed to address main issue, viz., whether the claim of undertaking of contract was genuine or not. Under these set of facts, we are of the view that this issue requires fresh examination at the end of the learned CIT(A). Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to her file for adjudicating this issue afresh.

In the result, the appeal filed by the Revenue is treated as allowed for statistical purposes.