Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI
Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)
This appeal has been preferred by the revenue against order dated 25/06/2014 passed by the Ld. CIT(Appeals)-24 Mumbai for the Asst. Year 2007-08, whereby the Ld. CIT(A) allowed the appeal filed by the assessee against the order passed by the A.O u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 (in short ‘the Act’).
The case was called for hearing, however, neither the appellant/assessee himself nor any authorized representative appeared on his behalf. As per the order sheet, on 06/04/2016 the Bench did not function, and parties were informed accordingly. Hence, it was decided to proceed ex-parte against the appellant/assessee and dispose of the appeal on the basis of material available on record, after hearing the departmental representative.
Brief facts of the case are that the appellant/assessee, a builder & developer filed its return of income for the relevant A.Y. declaring the total loss of Rs. 7397/-. The return was processed u/s 143(1) of the Act. Assessment order was finalizing u/s 143(3) of the Act, determining the total income of the assessee at NIL. Thereafter order u/s 263 of the Act was passed by the CIT-13 Mumbai and the assessment order was set aside with certain directions. Consequently, the A.O issued notices u/s 142(1) & 143(2) and after hearing the assessee assessment order u/s 143 r.w.s. 263 of the Act was passed. The assessee challenged the assessment order before the Ld. CIT(A). During the appellant proceeding, the Ld. AR for the assessee informed that the ITAT has set aside the original order passed u/s 263 of the Act vide order dated 07/06/2013. Accordingly, the Ld. CIT(A) allowed the appeal of the assessee holding that since order u/s 263 passed by the CIT(A) has been set aside by the ITAT on the basis of which order u/s 143 r.w.s. 263 of the Act was passed, the appeal
The revenue has challenged the impugned order on the following effective grounds of appeal:-
1. “On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in relying on the ITAT’s order dated 07/06/2013 in the case of the assessee for the same A.Y. and thereby erred in allowing the appeal of the assessee.”
2. “On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing the appeal of the assessee, without
appreciating the fact that department is in appeal before the Hon. High Court against the order of the ITAT relied upon by him.
Before us, the Ld. Departmental Representative (DR) submitted that the Ld. CIT(A) has wrongly allowed the appeal of the assessee without appreciating the fact that the department is in appeal before the Hon’ble High Court against the order of the ITAT relied upon by him.
On perused the material placed on record, we notice that the Ld. CIT(A) has allowed the appeal of the assessee on the ground that since the order passed by the Ld. CIT(A) u/s 263 of the Act has been set aside by the ITAT, there remains no basis for passing the assessment order u/s 143(3) r.w.s. 263 of the Act. Therefore, the appeal filed cannot be adjudicated. We also notice that the coordinate Bench of the Tribunal has set aside the original order passed by the Ld. CIT(A) holding as under:-
“It is to be noted that in the assessment of retiring partner M/s. Satinder Pal Investment P. Ltd. the Assessing Officer has assessed the amount received from the assessee firm as business income under the provision of sec. 28(iv) while passing the scrutiny assessment u/s 143(3) dt. 29/12/2009. Therefore, on the one hand, the Assessing Officer has treated the said payment as revenue receipt in the hand of the retiring partner and assessed the same as business income and at the same time, the CIT has held that the payment made to the retiring partner is capital expenditure and also taxable u/s 45(4).
In view of the fact that there is no dissolution and therefore there is no compulsory distribution of capital asset, there is nothing on record that there is distribution of asset on retirement of outgoing partner and further the so called asset which in the form of work-in- progress, the claim allowed by the Assessing Officer in the original assessment as revenue expenditure can’t be said as absolutely wrong or illegal. Hence, the impugned revision order passed by the CIT is not sustainable and the same is set aside.
In the result, the appeal filed by the assessee is allowed.”
Since the Ld. CIT(A) has allowed the appeal of the assessee in view of the order dated 07/10/2013, we do not find any legal infirmity in the order of the Ld. CIT(A). We therefore, dismiss the appeal of the revenue as mot maintainable.
In the result appeal filed by the revenue for the Asst. Year 2007-08 is dismissed.