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Income Tax Appellate Tribunal, DELHI BENCH “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-13, New Delhi, dated 26-02-2020, pertaining to the assessment year 2015-16. The assessee has raised following grounds of appeal:
“1(i) That on the facts and circumstances of the case, the CIT(A) was not justified in dismissing the appeal without appreciating the replies filed and same is in total disregard to principle of natural justice. (ii) That the appellant having already filed requisite documents during the course of remand and appellate proceedings, the action of CIT(A)
R.S. Traders Vs. ITO in not giving an explicit finding on the merits of the case is in total disregard to provisions of section 250(6) of the Act.
(iii) That replies to notices issued by CIT(A0 and Assessing Officer were regularly e-filed and the same having direct bearing to the issues in dispute, the Assessing Officer & CIT(A) should have admitted & considered the same in the interest of justice and for proper adjudication of grounds in dispute.
2(i) That on the facts and circumstances of the case, the CIT(A0 was not justified in confirming the action of Assessing Officer in making 40% ad-hoc disallowance of expenses to the extent of Rs. 64,100/- u/s 37(1) incurred in the form of commission and conveyance charges without appreciating the nature of expenses and documents on record.
(ii) That the claim of expenses made by the Appellant is fully supported from relevant bills and vouchers already filed before the lower authorities and the same being incurred for the purpose of business, the impugned disallowance is wholly on the basis of surmises and conjectures.
3(i) That on the facts and circumstances of the case, the CIT(A) is not justified in confirming addition of Rs. 14,50,000/- u/s 68 of the Act relating to the unsecured loans received by the appellant.
(ii) That the transactions of loans are fully supported from various documentary evidences and there being no adverse material on record to doubt the genuineness & creditworthiness of the lenders, the Assessing Officer has made the addition merely on the basis of surmises and conjectures.
(iii) That there being no dispute in regard to interest paid by the Appellant on such loan amounts and all the requisite documents being already filed before lower authorities, the action of the Assessing Officer in making such addition is arbitrary and mechanical.
4(i) That on the facts and circumstances of the case, the CIT(A0 was not justified in confirming the disallowance OF Rs. 1,00,915/- made u/s R.S. Traders Vs. ITO 37(1) incurred on account of salary paid to employees without appreciating the details filed by the Appellant.
(ii) That the salary payable outstanding in the liability side of balance sheet is an aggregate figure of employee salary & partner’s remuneration, the Assessing Officer has made this disallowance on the alleged ground that salary expenses claimed are less than the salary payable and as such the same is arbitrary and factually incorrect.
5. That the orders of the lower authorities are not justified on facts and the same are bad in law.
That the assessee craves leave to add, amend, alter or forgo any or all of the grounds as may be necessary and in the interest of justice.”
At the outset the learned counsel for the assessee submitted that the Assessing Officer did not provide adequate opportunity to the assessee to explain the source of unsecured loan to the tune of Rs. 14,50,000/-. He submitted that the learned CIT(Appeals) also dismissed the appeal in the absence of the assessee.
Learned Departmental Representative submitted that the Revenue would have no objection if the matter is restored to the Assessing Officer.
I have heard the rival submissions, perused the entire record and gone through the orders of the authorities below. It is seen from the record that the impugned order was passed ex parte qua the assessee. Even the Assessing Officer
R.S. Traders Vs. ITO also did not provide adequate opportunity to the assessee. Under these circumstances I deem it fit and proper in the interest of principles of natural justice to set aside the assessment and restore the same to the Assessing Officer for making assessment afresh. The grounds raised in this appeal are allowed for statistical purpose. The Assessing Officer is hereby directed to frame the assessment afresh after giving adequate opportunity to the assessee for proving the source of unsecured loans.
Assessee’s appeal is allowed for statistical purposes.