HBP Estates Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1158/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8007 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 04-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M CHOPRA
• Assessee Lawyers: SANJEEV DEORA
• Keywords: Business expenditure
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER I.T.A .NO.- 1158/DEL/2016 (ASSESSMENT YEAR-2006-07) HBP ESTATES PVT. LTD. H-65, CONNAUGHT CIRCUS NEW DELHI AABCH6442H (APPELLANT) VS ITO WARD-11(2) NEW DELHI (RESPONDENT) APPELLANT BY SH. SANJEEV DEORA, FCA RESPONDENT BY SH. M. CHOPRA, SR. DR ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 31/12/2015 PASSED BY CIT(A)-4, N EW DELHI, PERTAINING TO ASSESSMENT YEAR 2006-07, ON VARIOUS GROUNDS INCLUDI NG THE GROUNDS THAT THE APPEAL WAS DISMISSED WITHOUT PROVIDING AN OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE . 2. BOTH THE PARTIES HAVE BEEN HEARD. 2.1. THE RELEVANT FACTS OF THE CASE ARE THAT THE A SSESSEE WHO IS ENGAGED IN THE BUSINESS OF BUILDERS/PROPERTY DEVELOPERS DECLARED A LOSS OF RS.6,79,435/-. IN VIEW OF THE FACT THAT THE ASSESSEE HAD EARNED INCOM E OF RS.1,68,961/- FROM BANK INTEREST AND INTEREST FROM OTHERS AND HAD CLAIMED B USINESS EXPENSES TO THE TUNE OF RS. 8,48,396/-. THE ASSESSING OFFICER DISALLOW ED THE BUSINESS EXPENSES AND ASSESSED THE TOTAL INCOME AT 1,68,961/- HOLDING AS UNDER:- SINCE INCOME EARNED IS INCOME FROM OTHER SOURCES, ONLY EXPENSES INCIDENTAL TO EARNING INCOME FROM OTHER SOURCES IS ALLOWED TO SET OFF AGAINST INCOME FROM OTHER SOURCES IN ACCORDANCE WIT H SECTION 57. IN VIEW OF THE PROVISIONS OF SECTION 56 & 57 BUSINESS EXPEN SES ARE DISALLOWED. DATE OF HEARING 04.05.2016 DATE OF PRONOUNCEMENT 06.05.2016 ITA N O. 1158/DEL/2016 PAGE 2 OF 3 3. THE SAID FINDING LED TO THE PASSING OF THE PENAL TY ORDER U/S 271(1) (C). AGGRIEVED BY WHICH THE ASSESSEE CAME IN APPEAL BEFO RE THE FIRST APPELLATE AUTHORITY. IN VIEW OF NON REPRESENTATION THE APPEA L WAS DISMISSED HOLDING AS UNDER:- 2. IN RESPONSE TO THE NOTICES, THE LAST TIME APPEL LANT HAD APPEARED WAS ON 9/1/2014, WHEN THEY MADE THE SUBMISSIONS. ON THAT DATE MY PREDECESSOR HAD ASKED TO FURNISH THE DETAILS OF TRA VELLING EXPENSES AND OTHER EXPENSES DISALLOWED BY THE ASSESSING OFFI CER. AFTER THAT THE DETAILS WERE NEVER FILED AND THE APPELLANT WENT ON TO SEEK MANY ADJOURNMENTS AS VISIBLE FROM THE ORDER SHEET. FINALLY AFTER I JOINED IN THIS CHARGE, AGAIN A NOTICE WAS ISSUED AND THE CASE WAS FIXED ON 16/7/2015. THE APPELLANT WAS GIVEN FURTHER ADJOURN MENTS TO 4/8/2015 AND 31/8/2015 BUT AFTER THAT NOBODY APPEARED ON 31/ 8/2015 EVEN. IN VIEW OF NON- COMPLIANCE, I HEREBY DISMISS THE APPEA L. (EMPHASIS PROVIDED) 4. AGGRIEVED THE ASSESSEE IS IN APPEAL. ON CONSIDE RATION OF THE ABOVE WE ARE OF THE VIEW THAT THE AFORESAID DECISION OF THE LEARNED FIRST APPELLATE AUTHORITY DOES NOT MEET THE STATUTORY REQUIREMENTS AS SET OUT SUB SECTION (6) OF SECTION 250 OF THE INCOME-TAX ACT 1961. THE SAME IS REPRODUCED HE REUNDER FOR READY REFERENCE:- 250. (1) . (2) (3) (4) . (5) . (6) THE ORDER OF THE COMMISSIONER (APPEALS) DISPOS ING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. (6A)............................................... .................... 4.1. WE FIND THAT NO SUCH EXERCISES HAS BEEN DONE B Y THE CIT(A). THE LD. AR APPEARING ON BEHALF OF THE ASSESSEE WAS NOT IN A P OSITION TO ADDRESS THE REASONS WHY THE ASSESSEE WAS NOT REPRESENTED AND MAINLY SUB MITTED THAT DUE TO CHANGE OF CIT(APPEALS), THE REPRESENTATION MAY NOT HAVE BEEN COMPLETED. THE LD. AR SUBMITTED THAT THE ASSESSEE SHALL PARTICIPATE IN TH E PROCEEDINGS IN THE EVENTUALITY, THE APPEAL IS DISMISSED. 4.2. THE SPECIFIC PROVISION REQUIRES THE FIRST AP PELLATE AUTHORITY TO SET OUT POINTS FOR DETERMINATION AND THE DECISION THEREON SUPPORTED BY REASONS FOR ITA N O. 1158/DEL/2016 PAGE 3 OF 3 ARRIVING AT A CONCLUSION. THE SAID MANDATORY EXERC ISE IN THE AFORESAID PROVISION IN THE PECULIAR FACTS OF THE PRESENT CASE IS FOUND TO BE NOT FULFILLED. ACCORDINGLY HOLDING THE IMPUGNED ORDER VIOLATIVE OF THE STATUTO RY MANDATE IT IS SET ASIDE BACK TO THE FILE OF THE CIT(A) TO MAKE GOOD THE STATUTOR Y DEFICIT. NEEDLESS TO SAY THAT BEFORE PASSING THE ORDER, A REASONABLE OPPORTUNITY SHALL BE PROVIDED TO THE ASSESSEE. WHILE SO DIRECTING IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED IS NOT ABUSED BY THE ASSESSEE AND IS UTILIZED IN GOOD FAIT H AS FAILING WHICH THE LD. CIT(A) WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER IN ACC ORDANCE WITH LAW ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 06 O F MAY 2016. SD/- SD/- (L. P. SAHU) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER *R. NAHEED/AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSIS TANT REGISTRAR ITAT NEW DELHI