KANGRA VALLEY GARDEN HOTELS PRIVATE LIMITED,KANGRA vs. INCOME TAX OFFICER, WARD DHARAMSHALA, HIMACHAL PRADESH, DHARAMSHALA

आदेश/ORDER PER PARESH M. JOSHI, JM

(ITA 600/CHD/2024 : A.Y. 2013-14)

This is an appeal filed by the assessee under Section

253 of the Income Tax Act, 1961 (hereinafter referred to as

Act) before this Tribunal as and by way of second appeal.

The assessee is aggrieved by the order bearing

No.ITBA/NFAC/S/250/2024-25/1064403518 (1) dated

26.04.2024 passed by ld. CIT(A) under Section 250 of the Act

which is hereinafter referred to as the ‘impugned order’. The

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 2

relevant assessment year is 2013-14 and the corresponding

previous year period is from 01.04.2012 to 31.03.2013.

2.1. That the assessee company e-filed its return of

income for the assessment year 2013-14 on 30.10.2013 and

declared total income as Rs. ‘Nil’.

2.2 Thereafter the case was selected in scrutiny through

CASS and the reason of selection as generated from the

system was “Large Share Premium Received”.

2.3 That notice under Section 143(2) was generated on

3rd September, 2014 by ITO Ward 5(1) Chandigarh and

served upon the assessee through Mail fixing the case for

hearing on 12 Sept.,2014.

2.4 That another notice under Section 143(2) was issued

through Mail fixing the case for hearing on 22 Sept.,2014.

2.5 That yet another notice under Section 143(2) was

issued through Mail fixing the case for 27 Sept.,2014.

2.6 That thereafter the case was transferred to ITO,

Dharmshala, HP in pursuance to the order under Section

127(2) dated 02.03.2015.

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 3 2.7 A detailed questionnaire alongwith notice under

Section 142(1) of the Act was issued on 14th August, 2015

fixing the case for hearing on 26th August, 2015.

2.8 That in response to the said notice and further

proceedings Shri Sanjiv Rana, Advocate, AR of the assessee

attended the proceedings from time to time and filed replies

and evidences as called for.

2.9 That the books of account alongwith vouchers were

produced and examined on test check basis.

2.10 That as per "Memorandum of Association" of the

company, the main object of the assessee company is to

carry on the business of hotels, motels, resorts, guest

houses etc and to develop tourism in India and abroad

During the year under consideration, the assessee

company has claimed only preoperative expenses and

does not have any revenue from the operations. As per

Memorandum and Articles of Association, the following

persons shall be directors of the company :-

(i) Nirvan Singh Gill (ii) Vivan Singh Gill (iii) Karan Singh Brar

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 4 2.11 That the reason for selection of the case was "Large

Share Premium Received". The assessee was asked to file

the details of the share applicants, number of shares

allotted, nominal value, premium value etc alongwith

supporting evidence. Consequently, the assessee filed the

requisite reply on 18 Jan 2116. The assessee in his reply

dated 18 Jan 2016 has stated that the present directors

of the company are :-

(i) Nikhilendra Singh (ii) Amarinder Singh Dhaliwal (iii) Nicholas Timothy Allan (iv) Jonathan Mark Edward Boyer

During the year under consideration, the assessee

company has received share application money of Rs.

17,39,27,429/- consisting of share capital of Rs

44,34,720/- (443472 shares were issued during the year)

and share premium of Rs 16,94,92,709/- meaning

thereby that shares were issued at a minimum premium

of Rs 365 per share and ranging upto Rs 400 per share.

The details are as given below :-

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 5

PAN No of Nominal Premium Total Amount (Rs) S. Name & Address Date shares Value (Rs) Value (Rs) No. 01 Jonathan Mark Edward - 111095 02-Apr- 11,10,950/- 4,05,49,675/- 4,16,60,625/- Boyer 2012 A3 Spyglass Glass, 96 Repulse Bay Road, H mg Kong, HK, HONGKONG 02 Nicholas T Allan - 55545 02-Apr- 5,55,450/- 2,02,73,925/- 2,08,29,375/- Kentisbeare House, 2012 Cullompton, EX152BR, United Kingdom 03 Jonathan Mark Edward - 37714 25- Jul- 3,77,140/- 1,37,65,610/- 1,41,42,750/- Boyer 2012 A3 Spyglass Glass, 96 Repulse Bay Road, H mg Kong, HK, HONGKONG 04 Nicholas T Allan - 19365 25-Jul- 1,93,650/- 70,68,225/- 72,61,875/- Kentisbeare House, 2012 Cullompton, EX15I BR, United Kingdom 05 Jonathan Mark Edward - 146161 19- 14,61,610/- 5,84,20,551.7/- 5,98,82,161.70/- Boyer Mar- A3 Spyglass Glass, 96 2013 Repulse Bay Road, Hong Kong, HK, HONGKONG 06 Nicholas T Allan - 73592 19- 7,35,920/- 2,94,14,722.4/- 3,01,50,642.40/- Kentisbeare House, Mar- Cullompton, EX152BR, 2013 U.K. Total 443472 44,34,720/- 16,94,92,709.1/ 17,39,27,429.1/- -

Information u/s 133(6) of the Income Tax Act, 1961

was called for from the above mentioned investors. Notice

u/s 133(6) was issued to these persons requiring them to

file the following details :-

(i) Nature of business activities being carried out by you or by your company if you are representing any company and your business dealings with the above mentioned company.

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 6 (ii) State the face value of each share and also state that how much payment had been made during the F.Y. 2012-13 against these shares. Give the details of outstanding payment, if any, along with the documentary evidence. (iii) Whether these shares have been allotted to you. If yes, give the date of allotment alongwith the details q the payment made and outstanding payment, if any. (iv) Whether you have received any dividend or any other benefit out of such investment. (v) Whether you also have made such investments in the State of H.P. or any other state in the North India. If yes, details of the same may also be provided. (vi) Copy of the balance sheets where the above mentioned and such other investments have been reflected. Reply was received from only one investor i.e. Nicholas T

Allan, Kentisbeare House, Cullompton, EX152BR, United

Kingdom which is reproduced below:-

In reference to the above referred letter, it is so state as under: 1. This is to confirm having made an investment in shares of Kangra Valley Garden Hotels Pvt. Ltd. The details of total allotment of shares in the said company is as under:

S. No. No. of Date of Nominal value Premium Total value shares Allotment value 01. 55545 02-Apr-12 5,55,450/- 2,02,73,925/- 2,08,29,375/- 02. 19365 2 5-Jul-12 1,93,650/- 70,68,225/- 72,61,875/- 03. 73592 19-Mar-13 7,35,920/- 2,94,14,722/- 3,01,50,642/- Total 14,85,020/- 5,67,56,872/- 5,82,41,892/-

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 7 2. In relation to the allotment made on 2nd April, 2012 the application money was paid during the financial year 2011- 12. 3. Besides above company I had also made investment in other companies in India. 4. No dividend has been paid so far by the aforesaid company, as the construction work is still in progress and the commercial activities are yet to be commenced. We hope your goodself will find the above details in order. However, no reply to notice u/s 133(6) was Received in

this office from the other investor i.e. Jonathan Mark

ridward, A3, Spyglass Glass, 96 Repulse Bay Road, Hong

Kong, HK, HONGKONG.

In view of the above, the business activities of the

investors are not ascertainable. Even the existence of the

persons except on papers, cannot be verified. Further,

the non availability of the income particulars in general

and source of the above mentioned investments in

particular of both the investing persons indicates that

their creditworthiness is also questionable. In these

strange circumstances, the genuineness of share

application money received from such persons is

questionable. Usually persons having good business,

proper identity, future prospects, having profit motives

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 8 invest such huge share capital leave aside share

premium.

The company has received share application money

at a very unreasonably high share premium. It is

unusual that without any advertisement, any future

prospects, profitability etc. persons from abroad like

UK.& HONGKONG will invest in the assessee company.

The whole transaction, even though tarried through

banking channel, appears to be a make believe

affair/transaction. The assessee has routed its own

unexplained money in the guise of share application

money.

The view is being taken on the basis of reply

received from one investor in response to notice u/s

133(6) and no communication received from the other

investor and finally by placing the reliance upon

following cases :-

(i) Commissioner of Income-Tax vs. Nova Promoters & finlease (P) Limited. 342 ITR 169 (Del)

In this case, the Hon'ble Delhi High Court held as under:

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 9 "29. The findings of the Tribunal cannot be upheld as they are based on irrelevant material or have been entered by ignoring relevant, material. The finding that the share application monies have come through account payee cheques is, at best, neutral. The question required a thorough examination and not a superficial examination. If anything, in the light of the material gathered by the investigation wing about the modus operandi followed by the entry providers, the statements of Mukesh Gupta and Rahan Jassal the plea that the money was sent through banking channels loses all force. The Tribunal ought to have seen that the modus operandi involves receipt by the entry providers of equivalent amount of cash from the assessee.

The judgment of Hon'ble Supreme Court in the case of

CIT Vs Lovely Exports reported in 2008 266 CTR P 59 is

also considered which states that ;

"If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of Assessee Company."

The present case is distinguishable on facts. In case of

M/s Lovely Exports Limited, the Hon'ble Delhi High

Court noted that the Assessing Officer has neither

controverted nor disproved the material filed by the

assessee. Again, the Hon'ble Delhi High Court, in the

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 10 case of Commissioner of Income-1 ax vs. Nova Promoters

& Finlease (P) Limited. 342 ITR 169 (Del) has discussed

the decision of the Hon'ble Supreme Court in the case of

CIT vs. Lovely Exports P. Ltd. [2008] 216 CTR (SC) 195

viz-a-viz it's application in the case of a private Ltd.

company and in cases where AO has through his

investigations/enquiries established that the

contributions of share capital is/are bogus/by

nonexistent persons/entity of no means.

The decision of Lovely Exports is not going in favour

of the assessee as the ingredients of a transaction

covered u/s 68 were completely looked into.

(ii) Commissioner of Income Tax vs. Nr Portfolio Pvt. Ltd. on 22 November, 2013

"Whether or not onus is discharged depends upon facts of each case. It depends on whether the two parties are related or known to each; the manner or mode by which the parties approached each other, whether the transaction was entered into through written documentation to protect the investment, whether the investor professes and was an angel investor, the quantum of money, creditworthiness of the recipients, the object and purpose for which payments/investment was made etc. These facts are basically and primarily in knowledge of the assessee and it are difficult for revenue to prove

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 11 and establish the negative. On the question of credits worthiness and genuineness, it was highlighted that the money no doubt was received through banking channels, but did not reflect actual genuine business activity. The share subscribers did not have their won profit making apparatus and were not involved in business activity. They merely rotated money, which was coming through the bank accounts, The bank accounts, therefore, did not reflect their creditworthiness or even genuineness of the transact on. The beneficiaries, including the respondent assessee, did not give any share- dividend or interest to the said entry operators/subscribers. The profit motive normal in case of investment was entirely absent. In the present case, no profit or dividend was declared on the shares. Any person, who would invest money or give loan would certainly seek return or income as consideration. These facts are adverted to and as noticed below are true and correct. They are undoubtedly relevant and material facts for ascertaining creditworthiness and genuineness of the transactions."

(iii) Hon'ble Delhi High Court in CIT vs. Nipun Builders

& Developers, 350ITR 407 (Del) held as under :-

"So far as the creditworthiness of the share subscribers is concerned, the contention of the assessee before us is that it was proved by the bank statements of those subscribers submitted before the Assessing Officer. The Assessing Officer has not referred to them in the assessment order but it is not in dispute that the copies of the bank statements were furnished before him. Even assuming that the bank statements were filed before the Assessing Officer, that by itself may not be sufficient to

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 12 prove that creditworthiness without any explanation for the deposits in the accounts and their source. The usual argument in all such cases, including the present case, is that it is not for the assessee to prove the source of source and origin of origin of the receipts. We are alive to the, difficulty that may be faced by an assessee to unimpeachably establish that creditworthiness of the share subscribers but at the same time we are of the opinion that men furnishing of the copies of the bank accounts of the subscribers is not sufficient to prove their creditworthiness. There must be, in our opinion, some positive evidence to show the nature and source of the resources of the share subscriber himself and, therefore, it is necessary for him to come before the Assessing Officer and confirm his sources from which he subscribed to the capital. In the present case, the assessee did not produce the principal officers of the companies who subscribed to the shares; it merely filed a letter at the "dak" counter of the Assessing Officer, stating that the communications sent by it to the share subscribers have not come back unserved. This is not compliance with the direction of the Assessing Officer who had issued notice to the assessee to produce the principal officers of the subscribing companies, as is well known, in the case of private limited companies, it cannot be denied that there is serious enough to establish its case, it ought to have produced the principal officers of sources from which the share subscription was made. That would also have taken care of the difficulty of the assessee in proving the creditworthiness of the subscriber companies. It was, therefore, in the assessee's own interest to have actively participated and cooperated in the assessment proceedings and complied with the direction of the Assessing Officer to produce the principle officers of the

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 13 subscribing companies. Instead, the assessee took an adamant, of we may use that expression, attitude and failed to comply with the direction of the Assessing Officer; not only that, it challenged the Assessing Officer's finding that the summons sent to the companies came back unserved with the remark "no such company", which was also supported by the report of the inspector who made a visit to the addresses. The assessee thus took a very extreme stand which was, in our opinion, not justified; certainly it did nothing worthwhile to discharge the onus to prove the creditworthiness of the subscribing companies."

Receipt of such a high premium by the assessee company which is not eligible to fetch such a huge share capital lea ,-e aside share premium is against the human probability and just contrary to very nature of human conduct as held by the Hon'ble Supreme Court in the case of CIT vs. Durga Parsad More, ,1971) 82 ITR 540 (SC) in the said decision. The Hon'ble Supreme Court has categorically held that revenue is entitled to look into surrounding circumstances to find out the reality of recitals made in the documents in the case of Sumati Dayal vs. CIT 214 ITR 801 (SC), the Hon'ble Supreme Court has also held that the matter has to be considered in light of the human probabilities. "It is a story that does not accord with human probabilities". (iv) In the case of McDowell and Co. Ltd. [1985] 154 ITR

148, the following observation was made by the Supreme

Court (Chinnappa Reddy J., with other judges of the

Court) at page 160, which reads as hereunder: “In our

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 14 view, - the proper way to construe a taxing statue, while

considering a device to avoid tax, is not to ask whether

the provisions should be construed literally or liberally,

nor whether the transaction is not unreal and not

prohibited by the statute, but whether the transaction is

a device to avoid tax, and whether the transaction is

such that the judicial process may accord its approval to

it". Again page 171 (Ranganath Mishra, J with other

Hon'ble Judges of the Court) has observed as follows:

"Tax planning may be legitimate provided it is within the

framework of law, Colourable devices cannot be part of

tax planning and it is wrong to encourage or entertain

the believe that it is obligation of every citizen to pay the

taxes honestly without resorting to subterfuges".

(v) Another important decision of the Supreme Court in

this regard is the case of Workmen or - Associated

Rubber Industry Ltd. Vs. Associated Rubber Industry

Ltd. [1986] 157 ITR 77 (SC), where the Court held thus:

"It is duty of the court, in every case where ingenuity is

expended to avoid taxing and welfare legislations, to get

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 15 behind the smoke screen and discover

the true state of affairs. The Court is not to be satisfied

with form and leave well alone the

substance of a transaction.

(vi) In the case of Bombay Oil Industries Ltd. Vs. DCIT

[2000] 82 ITD 626, the following observation was made

by the ITAT Mumbai - C Bench, which reads as under:

"Under the Income Tax Act, the income -tax authorities

are empowered to go behind the apparent to find out the

real and if a transaction, on the bases of the evidence

and the surrounding circumstances of the case, appears

to them to be non-genuine or a facade or a make believe

affair, got up to evade the tax liability or if it appears

that the series of steps taken to achieve the desired

result is sham of collusive, they can ignore the

transaction".

In light of the foregoing paras, the share premium money

received by the assessee company from Jonathan Mark

Edward Boyer, A3 Spyglass Glass, 96 Repulse Bay Road,

Hong Kong, HK, HONGKONG and Nicholas T Allan,

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 16

Kentisbeare House, Cullompton, EX152BR, United

Kingdom to the tune of Rs. 16,94,92,709/- (as per details

given below) is treated as unexplained credits and is

treated as income of the assessee company within the

meaning of section 68 of the IT Act, 1961.

Name & Address Share Premium Jonathan Mark Edward Boyv r, A3 Spyglass Glass, 96 Rs 11,27,35,837/- Repulse Bay Road, Hong Kong, HK, HONGKONG Nicholas T Allan, Kentish are House, Cullompton, Rs 5,67,56,872/- EX152BR, United Kingdom Total Rs 16,94,92,709/-

2.12 Perusal of the Profit & Loss Account of the assessee

company reveal that the company has received a dividend

of Rs 6,88,365/- under the head "Other Income" of the

Profit & Loss Account. Going by the main objects of the

assessee company, the income by way of dividend is

clearly income from other sources. Moreover, the

assessee company has invested the money received in the

shape of share application money into SBI Mutual Funds

and received a dividend of Rs 6,88,365/- on the same.

This clearly establish that the assessee has utilized the

funds raised for business purpose into generating the

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 17

income in the form of dividend i.e. Income from Other

Sources i or the assessee company.

Therefore, the dividend received by the assessee company

at Rs 6,88,365/- is treated as income from other sources

arid taxed accordingly.

(Addition: Rs 6,88,365/-)

2.13 Total income of the assessee was computed as

under :

Returned income : Rs Nil Add : As discussed above in para-3 : Rs 16,94,92,709/ As discussed above in para-4 : Rs 6,88,365/- Total assessed income : Rs.17,01,81,074/-

2.14 The aforesaid assessment order of ld. AO is dated

29.03.2016 passed under Section 143(3) of the Act.

assessment order of ld. AO dated 29.03.2016 prefers first

appeal in terms of Section 246A of the Act before ld. CIT(A)

who by passing the impugned order however, has dismissed

their appeal. Consequently aforesaid additions stand

sustained.

order has preferred second appeal before us and inter-alia

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 18

has raised following grounds against the impugned order

which are as follows :

“1. The order passed by the Learned Assessing Officer ("Ld. AO") is bad in law and facts of the case 2. The Learned Commissioner of Income Tax (Appeals) (“Ld. CIT(A)/Ld.AO have erred in ignoring the submissions and details filed by the appellant 3. The Ld CTT(A) has erred in not providing a personal hearing to the appellant before passing the order. 4. The Ld CIT(A) / Ld. AO have erred in invoking the provisions of section 68 of the Income Tax Act, 1961 ("the Act") with respect to share premium amount received by the appellant from non-resident individuals and by treating the same as unexplained credits 5. The Ld C1T(A) / Ld. AO have erred in holding that appellant received unreasonably high share premium amount without any future prospects and in ignoring the valuation report filed by the appellant 6. The Ld. C1T(A) / Ld. AO have erred in making additions of share premium amount by ignoring that the same is not taxable in the hands of the appellant under section 56(2)(viib) read with section 5 and section 2(24)(xvi) of the Act. 7. The Ld. CIT(A)/Ld. AO have erred in levying interest under 234B of the Act. 8. The Ld. AO has erred in initiating penalty under section 271 (l)(c) of the Act. 9. The above grounds are independent and without prejudice to one another.”

5.1 The hearing in the matter took place before this

Tribunal on 09.12.2024 when both the ld. AR and ld. DR

were heard on their respective submissions. It was

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 19

contended by ld. AR for and on behalf of the assessee that

the impugned order is illegal, bad in law and not proper and

in violation of the principles of natural justice in as much as

before passing the impugned order the ld. CIT(A) did not

afford to them any opportunity of personal hearing, hence

the impugned order be set aside and matter may kindly be

remitted back to CIT(A) for denovo adjudication of their first

appeal. The ld. AR has produced before us a chart which is

giving share issuance details by the assessee company,

which is as under :

Assessment Name of No. of Month Face Premiu Face Premium Total Amount Year Shareholder Shares Value m value Amount amount NICHOLAS 55,545 April 2012 10 365 5,55,450 2,02,73,925 2,08,29,375 TIMOTHY 2013-14 ALLAN 19,365 July 2012 10 365 1,93,650 70,68,225 72,61,875

73,592 March 2013 10 399.7 7,35,920 2,94,14,722 3,01,50,642

JONATHAN 1,11,095 April 2012 10 365 11,10,950 4,05,49,675 4,16,60,625 MARK EDWARD BOYER 37,714 July 2012 10 365 3,77,140 1,37,65,610 1,41,42,750

1,46,161 March 2013 10 399.7 14,61,610 5,84,20,552 5,98,82,162

Total 4,43,472 44,34,720 16,94,92,709 17,39,27,429

NICHOLAS 48,816 November 10 399.7 4,88,160 1,95,11,755 1,99,99,915 TIMOTHY 2013 ALLAN 2014-15 24,052 March 2014 10 399.7 2,40,520 96,13,584 98,54,104

JONATHAN 97,632 November 10 399.7 9,76,320 3,90,23,510 3,99,99,830 MARK 2013

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 20

EDWARD BOYER 24,408 March 2014 10 399.7 2,44,080 97,55,878 99,99,958

Total 1,94,908 19,49,080 7,79,04,728 7,98,53,808

NICHOLAS 45,330 August 10 399.7 4,53,300 1,81,18,401 1,85,71,701 TIMOTHY 2014 ALLAN 2015-16 2,874 August 10 400 28,740 11,49,600 11,78,340 2014 16,191 December 10 400 1,61,910 64,76,400 66,38,310 2014 JONATHAN 48,810 June 2014 10 399.7 4,88,100 1,95,09,357 1,99,97,457 MARK EDWARD BOYER 67,480 August 10 399.7 6,74,800 2,69,71,756 2,76,46,556 2014

5,746 August 10 400 57,460 22,98,400 23,55,860 2014 32,519 December 10 400 3,25,190 1,30,07,600 1,33,32,790 2014 Sub-total 2,18,950 70 2,799 21,89,500 8,75,31,514 8,97,21,014

Amrinder 4,850 10 400 48,500 19,40,000 19,88,500 Singh

Nikhilendra 7,000 10 400 70,000 28,00,000 28,70,000 Singh Grand Total 2,30,800 23,08,000 9,22,71,514 9,45,79,514

Basis above, it was contended that for assessment year

2013-14, 2014-15, 2015-16, there are premium amount

against issue of shares. The ld. DR, however, has gone by

the order of lower authority and have left it to this Tribunal

to pass a suitable order in accordance with law.

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 21

6.1 We have carefully perused the record of the case, have

heard the arguments and submissions of both the parties

i.e., ld. AR for and on behalf of the assessee and ld. DR for

and on behalf of the Department and are of the view that the

impugned order is indeed bad in law and in violation of the

principles of natural justice as no opportunity was afforded

to the assessee of personal hearing before dismissing their

appeal.

6.2 In the premises set out hereinabove, we are of the

considered view that a detailed explanation be provided by

the assessee company to the first appellate authority in

such a manner that merits of their explanation be considered

by him on meritorious grounds. We, therefore, set aside the

impugned order and remand the case back to ld. CIT(A) on

denovo basis. We direct assessee to place before CIT(A) all

material information, documents etc., so that CIT(A) can

adjudge and adjudicate the first appeal on merits. Needless

to state CIT(A) should pass a speaking and reasoned order.

The assessee to cooperate in disposing off the first appeal

and not to seek unnecessary adjournments and delay the

due process of law.

ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 22

6.3 In result, appeal of the assessee is allowed as and by

way of remand on denovo basis.

6.4 Appeal allowed for statistical purposes.

ITA 601 & 602/CHD/2024

6.5 As the facts, issues and circumstances in ITA No.

601 & 602/CHD/2024 are similar to that of ITA

No.600/CHD/2024, therefore, our findings given in ITA

No.600/CHD/2024 would apply mutatis-mutandis to ITA

No.601 & 602/CHD/2024 also. Accordingly, ITA No.601 &

602/CHD/2024 are also allowed for statistical purposes.

6.6 In result, all appeals of assessee stand allowed for

statistical purposes.

Order pronounced on 18.12.2024.

Sd/- Sd/-

(VIKRAM SINGH YADAV) ( PARESH M. JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar