What did the Tribunal hold?

The Tribunal found that the CIT(A)'s order was indeed non-speaking and did not discuss the facts of the case. Consequently, the matter was restored to the CIT(A) for a fresh adjudication.

The assessee appealed against the CIT(A)'s order concerning disallowance of interest paid and addition of liabilities written back. The assessee argued that the CIT(A)'s order was non-speaking and lacked proper findings on both issues.

What were the issues?

Whether the CIT(A)'s order was a speaking order and adequately addressed the grounds of appeal raised by the assessee.

Dhanleela Investments & Trading… vs ITO | ITAT Mumbai 2016

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: Shri Dhanleela Investments &

Assessee by .. Pramod Rasam, AR Revenue by .. B.S. Bist, Sr. DR Date of hearing .. 08-11-2016 .. Date of pronouncement 08-11-2016 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT (A)-VII, Mumbai in appeal No. CIT (A)-VII/ITO-7(2)(1)/IT-563/2007-08 dated 31-12-2008. The Assessment was framed by ITO Ward 7(2)(1), Mumbai for the AY 1996-97 vide order dated 28-12-2007 under section 143(3) r. w. s. 254 of the Income Tax Act, 1961 (hereinafter ‘the Act’).

At the outset the learned Counsel for the assessee stated that there are two issues i.e. first regarding disallowance of interest paid to Dhanraj Mill P. Ltd. amounting to Rs. 32,97,605/- and addition of liabilities written back amounting to Rs. 35,55,453/-. Learned counsel for the assessee took us through the order of CIT (A) and he drew over attention to the findings of CIT (A) in regards to first issue which reads as under:-

“8. As far as the ITAT’s order is concerned, the Assessing Officer has already analyzed the appellant’s submission during the set aside proceedings before him and after discussing the same at Para No. 2.8 of this order, has already come to the conclusion that there is no reason with him for any material change in his earlier stand. 2.14. The appellant has not corroborated the AO's findings, and has not furnished any written submission.

2.15. In view of the above mentioned observations and findings, the undersigned sticks to the CIT (A)’s order dated 22/11/2000 on this issue, as reproduced in this order at para 2.12, and therefore while upholding the AO's action of holding that 86% of the loan was not utilized for the appellant’s business but only for making investments in order to have control over the group companies, and therefore the claim of interest payment of rs.32,97,605/- was not allowable, all of these grounds are dismissed.”

As regards in second addition he took us through the following finding of CIT (A) which read as under:- “3.6 There is no reason with the undersigned to deviate from the decision of my Ld. Predecessor on this issue, in the absence of any fresh details or submission taken before the undersigned, and therefore while sustaining the AO's action, these grounds are dismissed.”

In view of the above learned Counsel for the assessee stated the order of CIT (A) is totally non speaking order and on both the issues there is no finding at all by the CIT (A). He requested for setting aside of both the issues to the file of the CI T(A) for passing a speaking order and adjudicating the issue afresh after allowing reasonable of being heard to the assessee. On query from the bench, Ld. Sr. DR conceded the position.

In view of the above facts and circumstances of the case, we are of the view that the order of CIT (A) is a non-speaking order and facts are not at all discussed. Accordingly, as conceded by both the sides, we restore the matter back to the file of the CIT (A) on both the issues. The appeal of the assessee is allowed for statistical purposes.

DHANLEELA INVESTMENTS & TRADING CO. LTD,MUMBAI vs. ITO 7(2)(1), MUMBAI

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