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Facts
The assessee, M/s Shiv Balaji Cold Storage (P) Ltd., engaged in cold storage business for potatoes, appealed against an ex-parte order passed by the CIT(A). The assessee had submitted all relevant records and documentation to the Assessing Officer, including daily registers, rent receipts, and financial ledgers of farmers.
Held
The Tribunal found that the CIT(A) decided the appeal ex-parte without adjudicating on merits. Therefore, in the interest of justice, the appeal was restored to the CIT(A) for de novo adjudication on the surviving issues after giving the assessee a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without adjudicating the appeal on merits. Restoration of appeal for de novo adjudication.
Sections Cited
143(3), 56(2)(viib)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH “DB”: AGRA
AY 2014-15, arises out of the order of the Commissioner of Income Tax (Appeals)-2, Agra [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 12.02.2018 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.12.2016 by the Assessing Officer, ITO- 2(2)(5), Etawah (hereinafter referred to as ‘ld. AO’).
We find that the preliminary ground raised by the assessee is challenging the exparte order passed by the Learned CITA. This goes to the root of the matter and hence we deem it fit to address the same first.
We have heard the rival submissions and perused the materials available on record. The assessee is engaged in the business of cold storage of potatoes at Jaswantnagar which is very centre of potatoes cultivation. The promoters are also from agricultural background. The assessee only carries on storage business by keeping potatoes on fixed annual income charge basis as per prevalent market conditions. The assessee maintained daily potato aamad register as well as daily nikasi register, both registers containing details of farmers with their respective lot numbers. A receipt called Takpatti was issued on every arrival for storage to each farmer. Similarly on nikasi of goods, gatepass was issued to each of them. These records were duly produced before the Learned AO. They were issued rent receipts on realization of rent and for repayment of advances given to them (against storage of potatoes as per trade practice for which bank credits were also obtained). The financial ledger of each and every farmer was maintained and furnished which comprised of debits for advances given, interest charged thereon and repayment of advances / interest realization and the balance amount reflected as advances to farmers in the Balance sheet on 31.3.2014. Rent was realized in cash for which also, a receipt was issued on each payment. The farmer wise break up of outstanding amount was furnished along with all the abovesaid documents before the Learned AO together with the complete names and addresses of the farmers, amount of rent realized, number of packets received for storage from each one of them. Books of accounts were duly produced before the Learned AO. All these facts are conceded by the Learned AO himself in Para 10 of his assessment order. The summons issued to all the farmers were duly served on them. Few of the farmers who had kept potatoes with the assessee were also summoned by the Learned AO and statements recorded from them.
The Learned AO completed the assessment under section 143(3) of the Act by determining the total income at Rs 78,94,750/- after making the following additions:- a) Addition towards share application money u/s 56(2)(viib) being the difference in fair value of shares and issue price of shares – Rs 6,82,424/- b) Undisclosed trading business income of potatoes on an estimated basis – Rs 64,82,592/- c) Disallowance of expenditure on an adhoc basis – Rs 7,29,733/-
The assessee preferred an appeal before the Learned CITA. No appearance was made before the Learned CITA either in person or by way of filing written submissions. Hence the Learned CITA upheld the additions made by the Learned AO by simply endorsing the observations of the Learned AO.
Before us, the Learned AR made a statement from the Bar that he has been instructed to state that Ground Nos. 3 & 4 raised by the assessee were not to be pressed. Accordingly, the same is hereby dismissed as not pressed. For other grounds, we find on perusal of the order of the Learned CITA had decided the issue ex parte without adjudicating the issue on merits giving its independent finding. Hence, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to file of Learned CITA for de novo adjudication in accordance with law qua the surviving issues alone. Needless to mention the assessee be given reasonable opportunity of being heard. The assessee is directed to cooperate with Learned CITA for expeditious disposal of the appeal by not taking unwarranted adjournments. Hence, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 03/03/2025.