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Income Tax Appellate Tribunal, CHANDIGARH BENCHES ‘A’, CHANDIGARH
Before: SHRI SANJAY GARG & Dr. B.R.R. KUMAR
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 31.08.2016 of the Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A)], Panchkula.
The assessee is aggrieved by the disallowance made by Assessing officer us 40A(3) of the Income-tax Act, 1961 read with Rule 6DD on account of cash payments made for purchase of land.
The assessee is a builder and developer and for its business activity it purchased certain land from villagers. The assessee made total payment
of about Rs. 16 crores as consideration for the purchase of land from
different sellers out of which an amount of Rs. 3.34 crores was made in
cash. However, considering the submissions of the assessee, the Ld.
Assessing officer restricted the addition u/s 40A(3) to the extent of Rs.
1.70 cores. Being aggrieved by the above, the assessee preferred appeal
before the CIT(A).
The Ld. Counsel for the assessee has submitted that the assessee
could not appear before the CIT(A) as the address of the assessee was
changed and hence, the notices of hearing could not be received by the
assessee. That there was change in the management also. Due to these
circumstances, the case remained unrepresented before the CIT(A). The
Ld. CIT(A), therefore, passed an ex-parte order. The Ld. Counsel has
further submitted that the assessee has a good case on merits and that there
was a reasonable cause for making the said payments in cash. Ld. counsel,
therefore, has submitted that assessee may be given an opportunity to
present its case before the CIT(A) so that it may demonstrate the reasons
and justification for making a small portion of the total consideration in
cash.
The Ld. DR, on the other hand, has relied on the findings of the
lower authorities.
Considering the overall facts and circumstances, in our view, the
interest of justice will be well served if the assessee is given an
opportunity to present its case before CIT(A). In view of this, we set aside
the order of CIT(A) and restore the same to the file of the CIT(A) for
decision afresh. Needless to say that CIT(A) will give proper opportunity
to the assessee to present its case and assessee will present itself before
the Ld. CIT(A) as and when called for and would not deliberately
contribute in delaying the conclusion of the appeal.
The appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court.
Sd/- Sd/- (Dr. B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 21.02.2018 Rkk Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR