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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI PAWAN SINGH
सुनवाई की तायीख / Date of Hearing : 22.02.2017 घोषणा की तायीख /Date of Pronouncement : 17.03.2017 आदेश / O R D E R
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee on 7.10.2015 is against the order of the CIT (A)-6, Mumbai dated 13.8.2015 for the assessment year 2010-2011. In this appeal, assessee raised the following grounds which read as under:- “1. On the facts and in the circumstances of the case and in law, the Hon‟ble CIT (A) erred in passing as ex-parte order without affording proper opportunity.
2. On the facts and in the circumstances of the case and in law, the Hon‟ble CIT (A) erred in upholding the disallowance of expenses made by Ld AO of Rs. 7,70,70,676/- and the reason assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under.”
2. At the outset, Ld Counsel for the assessee brought our attention to the grounds and submitted that the CIT (A) passed the order ex-parte without affording proper opportunity of being heard to the assessee. In effect, the disallowance of expenses amounting to Rs. 7,70,70,676/- stands confirmed. According to the assessee the same constitutes unreasonable order.
Before us, it is the argument of the Ld Counsel for the assessee that the matter needs to revisit file of the AO for fresh adjudication. Bringing our attention to the assessment order, Ld AR submitted that the assessment order dated 12.3.2013 was also ex-parte order passed u/s 144 of theAct. Assessee filed the return of income declaring the total income of Rs. NIL claiming loss of Rs. 7,69,86,000/- and the same was assessed at Rs. 84,676/- disallowing the entire claim of expenses amounting to Rs.7,70,70,676/-. Matter travelled to the first appellate authority.
During the proceedings before the first appellate authority, CIT (A) confirmed the said decision of the AO in toto without providing opportunity of hearing to the assessee. Ld AR made appearances before the CIT (A). However, CIT (A) dismissed the addition on merit as well. The contents of para 3.1 of the CIT (A)‟s order confess the decision of the FAA on merits. It is the claim of the CIT (A) that no explanations and details were given to justify the claim of such huge expenses. Aggrieved with the above order of the CIT (A), assessee is in appeal before us with the above grounds. 5. In connection with the issues relating to principles of natural justice, it is the claim of the assessee that while the assessment order was passed u/s 144 of the Act, the CIT (A) passed the order in an ex-parte manner. Though the CIT (A) held that the assessee failed to establish the correctness and allowability of the expenses amounting to Rs. 7,70,70,676/-, the fact is that proper opportunity was not granted to the assessee for furnishing the evidences and explanations. Bringing our attention to page 10 of the paper book ie the copy of the ITR-VI for the AY 2010-2011, Ld Counsel for the assessee demonstrated that the said expenses in fact are not business expenses, they constitute „short term capital loss‟ (page no.8 of the paper book). These facts were not considered properly by the Ld CIT (A) by passing a speaking order. It is the request of the Ld AR that the matter should be remanded to the file of the AO. 6. We have heard Ld Representatives of both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. After hearing both the parties, we find merit in the Ld AR‟s argument. Therefore, in our opinion, the matter should remanded to file of the AO. Accordingly we order. AO is directed to examine the claim of the assessee and decide the issue afresh whether