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Income Tax Appellate Tribunal, DELHI BENCH ‘H’ NEW DELHI
Before: SHRI H. S. SIDHU & SHRI L.P. SAHU
ORDER
Per L.P. Sahu, Accountant Member:
This is an appeal by the assessee against the order dated 31.10.2012 of ld. CIT(A), XXI New-Delhi for the assessment year 2006-07 on the following grounds: “1. That on the facts and in circumstances of the case and in law, the Ld. Commissioner of Income Tax ( Appeals )-XXI New Delhi, erred in disallowing the 1/10th of total expenses Rs. 14,81,304/- debited to Profit & Loss Account , resulting to the net addition of Rs. 1,48,130/- on ad-hoc basis , which is not sustainable in the eye’s of law.
2. The brief facts of the case are that the assessee filed return of income on 29.03.2007 electronically. The case was selected for scrutiny and & notice U/s 143 (2) was issued on 06.10.2007 which was served on 22.10.2007. There after many notices were issued and none attended . The ld. A.O. took the help of inspector for serving the notice but notice was not served to the assessee on the given address . He provided many opportunities to the assessee . Thereafter ld. A.O. issued notice U/s 144 and completed the assessment with certain additions which is as under . 1. Addition on account of Share Capital Rs, 15,13,300/- 2. Addition on account of Unsecured Loans Rs. 5,00,000/- 3. Disallowance on account of Expenses Debited under various heads in the Profit & Loss Account Rs. 14,81,304/- Aggrieved by the order of the Assessing Officer , the ld. CIT ( A ) allowed the addition made on account of Share Capital & Unsecured loans as stated above at point one & two . The ld. CIT (A ) restrict the disallowance up to the 1/10th of Rs. 14,81,304/-the sum of various expenses debited in the profit & loss account. The observation of the ld. CIT (A) is as under “ During the course of appellate proceedings ld. AR of the appellant has filed full details as per ledger account which are available at page no. 43 to 75 of the Paper Book which was perused by me . But these figures could not be verified by AO due to the reason that notices could not be served and there are certain expenses which are exorbitantly high, viz Miscellaneous Expenses amounting to Rs. 4,32,315/- . So in my considered opinion it would be reasonable to restrict the allowance to 1/10th of the total expenses claimed of Rs. 14,81,304/-. Being aggrieved, the assessee is in appeal before us.
The ld. AR submitted that the said ex parte order on dated 19.12.2008 under section 144 of the Income Tax Act. 1961 for the assessment year 2006- 07 was also not served on to the assessee company before the statutory time limit prescribed for the completion of assessment proceedings and the same was first came to the notice of the assessee company only during the course of hearing of assessment proceedings for the assessment year 2009-10. The said ex parte order passed on 19.12.2008 was served to the assessee company only on dated 16.11.2011 for the assessment year 2006-07. The ld. AR filed details of expenses as debited in the Profit & Loss Account at page no. 46-76 of and audit report at page No. 10-29 of paper respectively.
The ld. DR relied on the order of the lower authorities. Regarding production of additional evidence before the Bench, the ld. DR stated that such evidences can be examined only by the AO.
Having considered the rival submissions and perused the material on record, the additional evidence submitted by the assessee before the Bench is taken on record. A perusal of impugned order shows that the details for expenses are stated by the assessee to have been produced before the CIT (A). The additional evidence furnished by the assessee in the form of details of expenses ( Ledger Account ) . It needs to be examined by the AO before deciding the impugned issue. In presence of these facts, we find that it is a fit case which requires restoration to the file of AO. Accordingly, we set aside the order of the ld.CIT(A) only to the grounds of appeal taken by the appellant for disallowance and restore the matter to the file of Assessing Officer for deciding the issue afresh after examining all the evidences which the assessee shall furnish before the AO in support of its claim. Needless to say the assessee shall be afforded reasonable opportunity of being heard before finally deciding the matter. The assessee is directed to avoid unnecessary adjournments and shall fully cooperate with the Assessing Officer.
6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 04.02.2016 Sd/- Sd/- ( H. S. SIDHU) (L.P. SAHU) Judicial Member Accountant Member Dated : Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order Assistant. Registrar Income Tax Appellate Tribunal Delhi Benches, New Delhi
Date Initial 1. Draft dictated on 2. Draft placed before author 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.