SOLITAIRE WORLD PVT LTD.,NEW DELHI vs. ACIT CIRCLE-28, DELHI

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ITA 2533/DEL/2022Status: DisposedITAT Delhi11 May 2023AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee's claim of non-receipt of notices could not be disregarded. Therefore, the appeal was allowed to restore the issues to the CIT(A) for a fresh decision.

What were the facts?

The assessee's appeal was against an ex-parte order by the CIT(A) upholding additions made to the income. The assessee claimed they never received notices for the CIT(A) hearings, supported by an affidavit from their director.

What were the issues?

Whether the CIT(A) order was justified in being passed ex-parte without proper service of notices to the assessee. Whether the additions made by treating cash sales as unexplained credit and rejecting books of accounts were valid.

Which sections of the Income-tax Act were involved?

Section 68,Section 145(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA

For Respondent: Ms. Yamini Goutam, Sr DR
Hearing: 11/05/2023Pronounced: 11/05/2023

PER N. K. BILLAIYA, AM:

1.

This appeal by the assessee is preferred against the order of the CIT(A)-29, New Delhi dated 21.03.2022 pertaining to A.Y.2017-18.

2. The grievance of the assessee read as under :- “1. That on the facts and circumstances of the case and in law, the order passed by CIT(A) was not justified in passing the ex-parte order upholding the addition of Rs 8,37,80,273/- made in the assessment order as the notices for hearing mentioned in para 6 of appellate order were never received by the appellant.

2.

That on the facts and circumstances of the case and in law, the order passed by CIT(A) is contrary to facts and bad in law.

3. That on the facts and circumstances of the case and in law the CIT(A) was not justified in upholding the addition of Rs 6,00,00,000/- by treating cash sales as unexplained cash credit u/s 68 of Income Tax Act. 4. That on the facts and circumstances of the case and in law the CIT(A) was not justified in upholding the action of Assessing Officer in rejecting the books of the accounts of the appellate u/s 145(3) of Income Tax Act without providing any specific defects in the books of accounts. 5. That on the facts and circumstances of the case and in law the CIT(A) was not justified in upholding the addition of Rs.2,37,80,273/- (Rs.2,41,47,769/- (68,99,36,269 multiply 3.5 per cent) minus 3,67,496/- by applying GP rate of 3.5 percent on Rs.68,99,36,269/- (75,77,85,080 minus 6,78,48,811/-) being turnover after reducing the cash sales made during the year on account of estimated gross profit by summarily rejecting books of accounts. 6. That the appellant craves leave to add, alter and modify any of the grounds during the course of appellate proceedings.”

3.

At the very outset the Counsel for the assessee stated that the assessee never received any notices of hearing issued by the CIT(A) and, therefore, could not attend the appellate proceedings to support the case. In support of his submission the Counsel submitted the affidavit of Ashok Goyal being director of the assessee company.

4.

Per contra the DR stated that the CIT(A) has given several opportunities to the assessee and it was the assessee who chose not to attend the appellate proceedings.

5.

We have given a careful consideration to the order of the CIT(A). At para-6 of his order the CIT(A) has mentioned the date of notices issued. However, it is not coming out from the chart whether the notices actually served upon the assessee or not. The affidavit of the director of the assessee cannot be brushed aside lightly.

6.

In the interest of justice and fair play we deem it fit to restore the issues to the files of the CIT(A). The CIT(A) is directed to decide the appeal afresh after serving notices and affording a reasonable and adequate opportunity of being heard to the assessee. The assessee is directed to attend the appellate proceedings and furnish necessary details.

7.

In the result, the appeal for the assessee is allowed for statistical purpose.

8.

Decision announced in the open court on 11.05.2023.

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