MR MURTUZA KAYAMALI PARDAWALA, MUMBAI V. THE INCOME TAX OFFICER, WARD 17(2)(4), MUMBAI

ITA 1944/MUM/2023

AI Insights

The case involves Mr. Murtuza Kayamali Pardawala, who appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi, for the assessment year 2013-14. The primary issues in the appeal included the addition of deemed rental income and unexplained cash credits under section 68 of the Income Tax Act, 1961. The assessee contested the additions made by the Assessing Officer, which were confirmed by the CIT(A). The Tribunal noted that the CIT(A) had dismissed the appeal without adequate hearing, leading to the decision to remit the case back for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123338 (ITAT-undefined)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: Mumbai
• Next Hearing Date: 28-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 25-05-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAKINA AMRELIWALA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 68; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI S RIFAUR RAHMAN (ACCOUNTANT MEMBER) ITA No. 1944/MUM/2023 Assessment Year: 2013-14 Mr. Murtuza Kayamali Pardawala, 3602, 36 th floor, Marathom ERA- II, Nextgen CHS Ltd., Veer Santaji Lane, Off. G.K. Marg, Lower Parel (Wes), Mumbai-400013. Vs. The ITO Ward-17(2)(4), Room No. 123-B/E, 1 st floor, Aayakar Bhavan, Mumbai-400020. PAN No. AGHPP 7102 R Appellant Respondent Assessee by : Ms. Sakina Amreliwala, AR Revenue by : Mr. Jasbir S. Chouhan, CIT-DR Date of Hearing : 29/08/2023 Date of pronouncement : 06/09/2023 ORDER PER S RIFAUR RAHMAN, AM This appeal has been preferred by the assessee against order dated 22.03.2023 passed by the Ld. Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013-14, raising following grounds: 1. The learned assessing officer has erred in making addition of deemed rental income of Rs. 1,34,704 to income from house property and the learned Commissioner of Income Tax (A) NFAC has erred in confirming the same. 2. The addition of deemed rental income of Rs. 1,34,704 is incorrect and constitutes double addition. 3. The assessee prays to allow standard deduction in respect of income added as deemed rental income while assessing income from house property. 4. The addition of deemed rental income agreed by the assessee / his AR before the AO was incorrect and was not facts of the case and provisions of law. 5. The learned assessing officer has erred in making addition of Rs. 80,00,000 as unexplained cash credit under section 68 of the Act and the learned Commissioner of Income Tax (A) NFAC has erred in confirming the same. 6. The learned assessing officer has erred in treating and taxing the advance received from developer of Rs. 80,00,000 as unexplained cash credit under section 68 of the Act and the learned Commissioner of Income Tax (A) NFAC has erre same. 7. The learned CIT Appeals has erred in dismissing assessee's appeal by rejecting request made for adjournment of case and not hearing / deciding the appeal on merits. 8. The learned CIT Appeals erred in dismissing the appeal with affording adequate opportunity of being heard. The appellate proceedings, thus, suffer from principles of natural justice and needs to be set aside. 9. The assessee prays before your honour to afford and allow him an opportunity of being heard on merit 2. Brief facts of the case are that the assessee filed its return of income for assessment year 2013 income of Rs.8,13,780/ 143(1) of the Income- selected for scrutiny under CASS and accordingly notices u/s 143(2) and 142(1) of the Act were issued and served on assessee along with questionnaire. In response attended and submitted the relevant inform assessee is engaged in the business of trading in automobile spares-parts. Mr. Murtuza Kayamali Pardawala 3. The assessee prays to allow standard deduction in respect of income added as deemed rental income while assessing income from house property. The addition of deemed rental income agreed by the assessee / his AR before the AO was incorrect and was not in keeping with facts of the case and provisions of law. 5. The learned assessing officer has erred in making addition of Rs. 80,00,000 as unexplained cash credit under section 68 of the Act and the learned Commissioner of Income Tax (A) NFAC has erred in confirming the same. 6. The learned assessing officer has erred in treating and taxing the advance received from developer of Rs. 80,00,000 as unexplained cash credit under section 68 of the Act and the learned Commissioner of Income Tax (A) NFAC has erred in confirming the 7. The learned CIT Appeals has erred in dismissing assessee's appeal by rejecting request made for adjournment of case and not hearing / deciding the appeal on merits. 8. The learned CIT Appeals erred in dismissing the appeal with affording adequate opportunity of being heard. The appellate proceedings, thus, suffer from principles of natural justice and needs to be set aside. 9. The assessee prays before your honour to afford and allow him an opportunity of being heard on merits of the case. Brief facts of the case are that the assessee filed its return of income for assessment year 2013-14 on 30.09.2013 declaring total income of Rs.8,13,780/-. The return of income was processed u/s -tax Act, 1961 (in short ‘the Act’). The case was selected for scrutiny under CASS and accordingly notices u/s (1) of the Act were issued and served on assessee along with questionnaire. In response, Ld. AR of the assessee attended and submitted the relevant information as called for. The assessee is engaged in the business of trading in automobile Mr. Murtuza Kayamali Pardawala 2 ITA No. 1944/M/2023 3. The assessee prays to allow standard deduction in respect of income added as deemed rental income while assessing income from The addition of deemed rental income agreed by the assessee / in keeping with 5. The learned assessing officer has erred in making addition of Rs. 80,00,000 as unexplained cash credit under section 68 of the Act and the learned Commissioner of Income Tax (A) NFAC has erred in 6. The learned assessing officer has erred in treating and taxing the advance received from developer of Rs. 80,00,000 as unexplained cash credit under section 68 of the Act and the learned d in confirming the 7. The learned CIT Appeals has erred in dismissing assessee's appeal by rejecting request made for adjournment of case and not 8. The learned CIT Appeals erred in dismissing the appeal without affording adequate opportunity of being heard. The appellate proceedings, thus, suffer from principles of natural justice and needs 9. The assessee prays before your honour to afford and allow him an Brief facts of the case are that the assessee filed its return of 14 on 30.09.2013 declaring total . The return of income was processed u/s t ‘the Act’). The case was selected for scrutiny under CASS and accordingly notices u/s (1) of the Act were issued and served on assessee Ld. AR of the assessee ation as called for. The assessee is engaged in the business of trading in automobile 2.1 During assessment proceedings, the Assessing Officer observed that assessee has received Rs.88,00,000/ Flat Tenancy Right and accordin same as current liabilities. The assessee was asked to explain why the current liability in the name of KAS the balance sheet, when the property i.e. Dilshad Flat Tenancy Right has not been shown Since, the AR of the assessee could not give any explanation for the above transaction, the Assessing Officer proceeded to make the above addition u/s 68 of the Act. Similarly, the Assessing Officer has disallowed donations, disallowance of shop rent and made addition of deemed rental income of Rs.1,34,704/ 3. Aggrieved with the above order, the assessee preferred an appeal before the Ld. CIT(A) and objected to the additions made by the Assessing Officer relating additions u/s 68 of the Act. 4. At the time of hearing both the Ld. DR and Ld. AR agreed with the facts that assessee has not appeared before the Ld. CIT(A). Even though several opportunities were given and various dates were listed in the first appellate order at page 2. However, the Ld. CIT(A) has recorded the various opportunities extended to the assessee and decided the appeal under consideration ex material on record. Mr. Murtuza Kayamali Pardawala During assessment proceedings, the Assessing Officer observed that assessee has received Rs.88,00,000/- Flat Tenancy Right and accordingly the asssessee has declared the same as current liabilities. The assessee was asked to explain why the current liability in the name of KAS Associate the balance sheet, when the property i.e. Dilshad Flat Tenancy Right has not been shown in the asset side of the balance sheet. Since, the AR of the assessee could not give any explanation for the the Assessing Officer proceeded to make the above addition u/s 68 of the Act. Similarly, the Assessing Officer onations, disallowance of shop rent and made addition of deemed rental income of Rs.1,34,704/-. Aggrieved with the above order, the assessee preferred an appeal before the Ld. CIT(A) and objected to the additions made by the Assessing Officer relating to deemed rental income and additions u/s 68 of the Act. At the time of hearing both the Ld. DR and Ld. AR agreed with the facts that assessee has not appeared before the Ld. CIT(A). Even though several opportunities were given and various dates were isted in the first appellate order at page 2. However, the Ld. CIT(A) has recorded the various opportunities extended to the assessee and decided the appeal under consideration ex-parte based on the Mr. Murtuza Kayamali Pardawala 3 ITA No. 1944/M/2023 During assessment proceedings, the Assessing Officer against Dilshad gly the asssessee has declared the same as current liabilities. The assessee was asked to explain why Associate is appearing in the balance sheet, when the property i.e. Dilshad Flat Tenancy in the asset side of the balance sheet. Since, the AR of the assessee could not give any explanation for the the Assessing Officer proceeded to make the above addition u/s 68 of the Act. Similarly, the Assessing Officer onations, disallowance of shop rent and made Aggrieved with the above order, the assessee preferred an appeal before the Ld. CIT(A) and objected to the additions made by to deemed rental income and At the time of hearing both the Ld. DR and Ld. AR agreed with the facts that assessee has not appeared before the Ld. CIT(A). Even though several opportunities were given and various dates were isted in the first appellate order at page 2. However, the Ld. CIT(A) has recorded the various opportunities extended to the assessee parte based on the 5. He discussed the issue in his ord filed by the assessee. Since, the appeal of the assessee is dismissed as ex-parte by the Ld. CIT(A) without there being any representation from the assessee. We deem it fit and proper to remit this issue back to the file of the giving proper opportunity of being heard to the assessee. At the same time, we also direct the assessee to make the proper representation before the Ld. CIT(A) to adjudicate the issue on merit. Accordingly, the g for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/ (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 06/09/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Mr. Murtuza Kayamali Pardawala He discussed the issue in his order and dismissed the appeal filed by the assessee. Since, the appeal of the assessee is dismissed parte by the Ld. CIT(A) without there being any representation from the assessee. We deem it fit and proper to remit this issue back to the file of the Ld. CIT(A) to decide the issue afresh after giving proper opportunity of being heard to the assessee. At the same time, we also direct the assessee to make the proper representation before the Ld. CIT(A) to adjudicate the issue on merit. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. In the result, the appeal filed by the assessee is allowed for nounced in the open Court on 06/09/2023. Sd/- KULDIP SINGH) (S RIFAUR RAHMAN MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Mr. Murtuza Kayamali Pardawala 4 ITA No. 1944/M/2023 er and dismissed the appeal filed by the assessee. Since, the appeal of the assessee is dismissed parte by the Ld. CIT(A) without there being any representation from the assessee. We deem it fit and proper to remit this issue Ld. CIT(A) to decide the issue afresh after giving proper opportunity of being heard to the assessee. At the same time, we also direct the assessee to make the proper representation before the Ld. CIT(A) to adjudicate the issue on rounds raised by the assessee are allowed In the result, the appeal filed by the assessee is allowed for /2023. Sd/- S RIFAUR RAHMAN) ACCOUNTANT MEMBER BY ORDER, Registrar) ITAT, Mumbai