M/S ADITYA MARKCON P LTD,INDORE vs. THE ITO 1(1), INDORE

This appeal is filed by the assessee against the order dated 13.06.2022 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [“CIT(A)” in short] for Assessment Year 2011- 12. 2. The Grounds of appeal are as under :-

That, without prejudice to the above, the ld. CIT(A) grossly erred, in law, in confirming the action of the AO in determining the total income of the appellant u/s. 143(3) r.w.s. 147 of the Act at Rs.4,18,04,152/-, as against the Returned Income of Rs.96,300/- thereby making huge additions of Rs.4,17,07,852/- which is quite unjustified, unwarranted, arbitrary, excessive and bad-in-law.

That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in framing the assessment under s. 143(3) of the Income-Tax Act, 1961, without affording sufficient opportunity of being heard to the appellant which is quite unjustified, unwarranted, arbitrary, bad-in-law and against the principles of natural law and justice.

That, without prejudice to the above, the ld. CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.96,60,852/- made by the AO in the appellant's income, on the allegation of unexplained cash deposits in bank accounts by invoking the provisions of Section68 of the Act without considering and appreciating the material fact that the appellant had made deposits in its bank accounts out of genuine receipts made by it from carrying out its real estate business.

That, without prejudice to the above, the ld. CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.66,000/- made by the AO in the appellant's income, on account of difference in opening balance in the ledger account of M/s. Satellite Infra & Real Estate Pvt. Ltd. in the books of account of the appellant company, without considering and appreciating the material fact that the difference was fully explainable.

That, without prejudice to the above, the ld. CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.3,23,81,000/- made by the AO in the appellant's income, on the allegation of unexplained credits in bank accounts by invoking the provisions of Section 68 of the Act without considering and appreciating the material fact that the entire credits as appearing in the bank accounts of the appellant company were fully explainable.”

The assessee is a private limited company engaged in the business of real estate and construction of flats. The assessee filed return of income for Assessment Year 2011-12 on 23.03.2012. The Assessing Officer initiated the proceedings under Section 147 of the Income-tax Act, 1961 (“the Act” in short) on the ground that the gross receipt/turnover shown in the return of income by the assessee is only Rs.33,88,000/- as against cash receipt of Rs.6,09,03,667/- in its bank account. The Assessing Officer made addition of Rs.96,60,852/- as unexplained cash deposits in bank, addition of Rs.66,000/- as difference in the ledger accounts of Satellite Infra and Real Estate Pvt. Ltd. as well as the assessee-company and Rs.3,23,81,000/- as undisclosed and unexplained credit in bank account.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The learned AR submitted that since the notice was not received by the assessee related to hearing of the appeal before the CIT(A), the assessee could not attend the hearing before the CIT(A) and ex-parte order was passed without giving any finding on merit. The learned AR prayed that the matter may be remanded back to the file of the CIT(A) for proper adjudication of issues contested therein on merit and opportunity of hearing be given to the assessee.

The learned DR relied upon the assessment order and the order of the CIT(A).

We have heard both the parties and perused all the relevant material available on record. From the perusal of the order of the CIT(A), it appears that the CIT(A) has dismissed the appeal solely on the ground of non- appearance on the part of the assessee, without giving any finding on merit.

In the result, the appeal of the assessee is partly allowed for statistical purposes.