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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Ms. Suchitra Kamble
आदेश/ORDER This is an appeal filed against the order dated 27-10- 2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18.
The grounds of appeal
are as under:-
1. Ld. CIT(A) erred in law as well as in fact in confirming addition of Rs. 10,60,305/- out of addition of Rs. 13,10,305/- made by Id. AO being unverifiable purchase of assets duly accounted for in books of accounts.
Page No. Tara Electro Appliances Pvt. Ltd. vs. ITO
2. Ld. CIT(A) erred in law as well as in fact in confirming addition of Rs. 1,92,089/- made by ld. AO being disallowance of depreciation.
Ld. CIT(A) erred in law as well as in fact in confirming addition of Rs. 5,15,616/- made by Id. AO being 20% disallowance of expenditure claimed on account of salaries, wages and bonus and directors remuneration. 4. Ld. CIT(A) erred in law as well as in fact in confirming addition of Rs. 11,53,430/- made by Id. AO being 20% disallowance of interest expenses. The Appellant craves leave to amend and or to add and or to alter any of the grounds of appeal.”
3. The assessee company is engaged in the business of mobile recharge and DTH recharge business. The assessee company filed its return of income on 01-11-2017 declaring total income of Rs. nil (current year loss of Rs. 4,70,097/- and the book profit u/s. 115JB of the Act at Rs. nil. The case was selected for complete scrutiny and statutory notice u/s. 143(2) of the Income Tax Act was issued to the assessee on 29-08- 2018. The reason for selection for scrutiny described as quantitative details of principal items of goods traded or raw material as well as finished goods not submitted. In response to the notice u/s. 143(2) of the Act, the assessee furnished his submissions dated 15-09-2019. Notice u/s. 142(1) of the Act was accordingly issued along with questionnaire. The assessee filed certain details but the Assessing Officer observed that the assessee has not provided the details related to trade payable, additions to fixed assets and the claim of deprecation thereon, expenses towards salary and remuneration, interest expenses and other expenses claimed. The Assessing Officer therefore
Page No. Tara Electro Appliances Pvt. Ltd. vs. ITO made disallowance of depreciation at Rs. 1,92,089/- on account of addition of unverifiable investment of assets amounting to Rs. 13,10,305/-. The Assessing Officer also made disallowance of salaries, wages and bonus amounting to Rs. 5,15,616/-. The Assessing Officer also made disallowance of interest expenses amounting to Rs. 11,53,430/-.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
The ld. A.R. submitted that there is a delay of 22 days in filing the present appeal as the assessee was seeking the advice from his professional consultant and due to unavoidable circumstances the delay incurred. The explanation by the assessee appears to be reasonable. Hence, the delay is condoned.
The ld. Authorized Representative submitted the assessee could not respond the email of the hearing notices issued by the CIT(A) as the assessee’s concern account department has not informed on time. The ld. Authorized Representative submitted that the assessee was not able to represent his case before the ld. CIT(A) and the CIT(A) passed ex-parte order. The ld. A.R. submitted that the assessee has filed the paper book
Page No. Tara Electro Appliances Pvt. Ltd. vs. ITO wherein the documents submitted before the lower authorities as well as the additional evidences related to bills for fixed assets purchases were also placed on record before the Tribunal for the first time. The ld. A.R. submitted that these additional evidences should be admitted and the matter may be remanded back to the file of the Assessing Officer for proper adjudication of the issues.
The ld. D.R. submitted that despite giving proper opportunities, the assessee has not filed the relevant details either before the Assessing Officer as well as before the CIT(A) and in fact there is negligence on the part of the assessee to represent the case properly. The ld. Departmental Representative submitted that the CIT(A) has rightly decided the case on merit as well.
Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the CIT(A) has not taken cognizance of the evidences filed by the assessee before the Assessing Officer while deciding the issue on merit. In fact, the CIT(A) has also not called upon the assessee to file bills for fixed assets purchases and thus the proper representation was not taken into account by the Revenue while deciding the case. From the perusal of the documents, it appears that the evidences filed before the Page No. Tara Electro Appliances Pvt. Ltd. vs. ITO Assessing Officer as well as the additional evidences in consonance to the earlier evidences needs proper verification and adjudication. Therefore, the matter is remanded back to the file of the Assessing Officer for proper adjudication of the issues on merit as per income tax statute. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.