RAJENDRA KUMAR BAGMAR AKANSA, CHENNAI V. ITO NCW 4(1), CHENNAI

ITA 3010/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2961 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.3010/CHNY/2018 / ASSESSMENT YEAR: 2015-16) SHRI RAJENDRA KUMAR BAGMAR AKANSA, VICTOR GRACE & CO, SPENCER PLAZA, O-704, 769, ANNA SALAI, CHENNAI 600 002. VS THE ITO, NON-CORPORATE WARD 4(1), CHENNAI. PAN: BCJPA0129E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI M. ABHISHEK, CA / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT /DATE OF HEARING : 06.03.2019 /DATE OF PRONOUNCEMENT : 06.03.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI, DATED 10.09.2018 IN ITA NO.302/CIT(A)-5/2017-18 FOR THE ASSESSMENT YEAR 2015-16 PASSED U/S.250(6) R.W.S 143(3) OF THE ACT. 2 ITA NO.3010/CHNY/2018 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS APPEAL:- (I) THE ORDER OF THE AO/CIT(A) IS ERRONEOUS, IS CONTRARY TO LAW, OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. (II) THE LEARNED CIT(A) ERRED IN DENYING THE APPELLANT AN OPPORTUNITY OF BEING HEARD, DESPITE SEEKING A SHORT ADJOURNMENT DUE TO EMERGENCIES. (III) THE DECISION RELIED ON BY THE CIT(A) CLEARLY STATES ADJOURNMENTS SHOULD BE GRANTED WHEN REASONABLE AND OPPORTUNITY OF BEING HEARD CANNOT BE DENIED. (IV) THE LEARNED AO/CIT(A) FAILED TO CONSIDER THE ADDENDUM TO THE ORIGINAL MEMORANDUM OF AGREEMENT, BEFORE PASSING THE IMPUGNED ORDER. (V) THE LEARNED AO/CIT(A) OUGHT TO HAVE ASSESSED THE INCOME BASED ON WHAT WAS RECEIVED, WITH DUE REGARD TO THE ADDENDUM AND OUGHT NOT TO HAVE RESTRICTED TO THE OLD MEMORANDUM OF AGREEMENT ONLY. (VI) THE LEARNED AO/CIT(A) FAILED TO TAKE COGNIZANCE THAT THE APPELLANT IS IN THE REAL ESTATE BUSINESS AND HAS INVESTED IN THE PROJECT IN QUESTION. (VII) THE LEARNED AO/CIT(A) HAS WRONGLY CONCLUDED THAT THE NATURE OF AGREEMENT IS THAT OF A FINANCE AGREEMENT WITH A GUARANTEED RETURN, WITHOUT TAKING INTO CONSIDERATION THAT THE RETURN FOR THE APPELLANT IS NOT FIXED. (VIII) THE LEARNED AO/CIT(A) OUGHT TO HAVE TAKEN INTO CONSIDERATION THE P&L AND BALANCE SHEET OF THE ASSESSEE WHERE THE PROPERTY IS SHOWN AS A CLOSING STOCK, AND REFERRED THE ADDENDUM TO THE MEMORANDUM OF AGREEMENT. (IX) THE LEARNED AO/CIT(A) HAS ERRED IN MAKING ADDITIONS TO THE INCOME OF THE APPELLANT BASED ON ACCOUNTING ASSUMPTIONS, WHEN THE SAME WAS OFFERED TO TAX IN THE PREVIOUS ASSESSMENT YEAR, IN THE SAME ACCOUNTING METHOD. (X) THE LEVY OF INTEREST U/S 234 IS WHOLLY ARBITRARY AND BAD IN LAW, RENDERING IT LIABLE TO BE QUASHED. (XI) ANY OTHER GROUND THAT MAY BE RAISED AT THE TIME OF PERSONAL HEARING. 3 ITA NO.3010/CHNY/2018 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF FINANCE, FILED HIS RETURN OF INCOME BELATEDLY FOR THE ASSESSMENT YEAR 2015-16 ON 26.03.2016 ADMITTING TOTAL INCOME OF RS.7,16,250/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) & 142(1) OF THE ACT WAS ISSUED ON 22.09.2016 & 08.02.2017 RESPECTIVELY. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 23.12.2017 WHEREIN THE LD.AO MADE ADDITION OF RS.96,36,292/ TOWARDS PROFIT WORKED OUT BASED ON PROJECT COMPLETION METHOD AS PER MERCANTILE SYSTEM OF ACCOUNTING. ON APPEAL THE LD.CIT(A) PASSED AN EX-PARTE ORDER CONFIRMING THE ORDER OF THE LD.AO. 4. AT THE OUTSET THE LD.AR SUBMITTED BEFORE US THAT THE LD.CIT(A) HAD PASSED AN EX-PARTE ORDER WITHOUT GRANTING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD AS HE COULD NOT BE PRESENT BEFORE THE BENCH ON THE DATE OF HEARING DUE TO CERTAIN UNAVOIDABLE CIRCUMSTANCES. IT WAS THEREFORE PLEADED THAT ONE MORE OPPORTUNITY MAY BE PROVIDED TO THE ASSESSEE SO THAT THE ASSESSEE OR HIS REPRESENTATIVE WOULD BE ABLE TO PRESENT THE CASE BEFORE THE LD.CIT(A). THE LD.DR STRONGLY OPPOSED TO THE SUBMISSION OF THE 4 ITA NO.3010/CHNY/2018 LD.AR AND ARGUED STATING THAT SEVERAL OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE AND THE ASSESSEE HAD SOUGHT ADJOURNMENT ON EARLIER TWO OCCASIONS. FURTHER ON THE SUBSEQUENT DATE OF HEARING ALSO NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE THE LD.DR PLEADED FOR CONFIRMING THE ORDERS OF THE LD.REVENUE AUTHORITIES. 5. AFTER HEARING BOTH SIDES, WE DO NOT FIND ANY MERIT IN THE ARGUMENTS ADVANCED BY THE LD.AR. FROM THE ORDER OF THE LD.CIT(A) IT IS EVIDENT THAT THE LD.CIT(A) HAD PROVIDED SEVERAL OPPORTUNITIES TO THE ASSESSEE OF BEING HEARD BUT BOTH THE LD.AR AS WELL AS THE ASSESSEE HAD MISERABLY FAILED TO APPEAR BEFORE THE LD.CIT(A) AT THE TIME OF HEARING. HOWEVER, CONSIDERING THE SUBMISSION OF THE LD.AR IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD.CIT(A) FOR DE-NOVA CONSIDERATION. WE ALSO DIRECT THE ASSESSEE AND HIS COUNSEL TO CO-OPERATE BEFORE THE LD.REVENUE AUTHORITIES PROMPTLY IN ORDER TO EXPEDITE THEIR PROCEEDINGS, FAILING WHICH THE LD.REVENUE AUTHORITIES SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW BASED ON THE MATERIALS ON RECORD. 5 ITA NO.3010/CHNY/2018 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 6 TH MARCH, 2019 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 6 TH MARCH, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF