M/s. Coxwell Domes Engineers Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 3475/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3796 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 01-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Depreciation; Opportunity of being heard; Earning of tax free income; Revised return
• Section: 14A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SHRI N.K. SAINI , ACCOUNTANT MEMBER I.T.A. NO. 3475 /DEL /201 7 ASSESSMENT YEAR: 2012 - 13 COXWELL DOMES ENGINEERS PVT. LTD. 102, JANAK CINEMA OFFICE COMPLEX, JANAKPURI, NEW DELHI PAN - AAACC3240M VS. ITO WARD - 6(3) NEW DELHI [APPELLANT] [RESPONDENT] APPELLANT BY: NONE RESPONDENT BY: SH. T. VASANTHAN, SR. DR DATE OF HEARING: 19 0 9 2017 DATE OF PRONOUNCEMENT: 20 1 0 2017 O R D E R PER N.K. SAINI , A.M: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 16.9.2016 OF THE LEARNED CIT(A) - 35 NEW DELHI . DURING THE COURSE OF HEARING, NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE NEITHER ANY ADJOURNMENT WAS SOUGHT. WE, THEREFORE, PROCEEDED EX PARTE AND THE APPEAL IS DISPOSE D OF BY HEARING THE LEARNED SR. DR ON MERIT. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: - 1 . THAT THE ORDER OF THE LD. ASSESSING OFFICER AS WELL AS THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS BAD IN LAW AND ON FACT. 2 . THAT THE LD. ASSESSING OFFICER AS WELL AS THE LD. COMMISSIONER OF INCOME TAX ITA NO. 3475 /DEL/201 7 AY 2012 - 13 4 2 (APPEAL) HAS ERRED IN DISALLOWING AND ADDING TO THE TOTAL INCOME RS.85,777, ON THE GROUND THAT THE APPELLANT HAS BORNE EXPENDITURE AT AN ESTIMATED RATE OF 0.5% OF AVERAGE INVESTM ENT OF RS.1,71,55,360 IN EQUITY SHARES AS PER PROVISION OF SECTION 14A OF THE INCOME TAX ACT, 1961 READ WITH RULE 8D OF THE INCOME TAX RULES, 1962, NOTWITHSTANDING THE FACT THAT THE APPELLANT IN THE RELEVANT PREVIOUS YEAR HAS NOT EARNED ANY EXEMPT INCOME. 3 . THAT THE LD. ASSESSING OFFICER AS WELL AS THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN DISALLOWING AND ADDING TO THE TOTAL INCOME RS.12,53,558, ON THE GROUND THAT THE DEPRECIATION (RS.6,72,318) CLAIMED AND INTEREST ON CAR LOAN (RS.5,81,240) IN CURRED ON MERCEDES CAR CANNOT BE ALLOWED FOR THE REASON THAT THE MERCEDES CAR DO NOT BELONG TO THE APPELLANT, NOTWITHSTANDING THE FACT THAT THE MERCEDES CAR WAS TRANSFERRED TO THE APPELLANT DURING THE RELEVANT PREVIOUS YEAR. 4 . THAT THE LD. ASSESSING OFFICER AS WELL AS THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN ADDING TO THE TOTAL INCOME RS.16,92,850, MADE ON THE GROUND THAT SUNDRY CREDITOR, NAMELY, M/S SHREE STEEL (RS.8,40,350) AND M/S SHYAM ENTERPRISES (RS.8,52,500) WERE UNVERIFIED, WITHOUT GIV ING THE APPELLANT SUFFICIENT OPPORTUNITY TO PLACE ITS CONTENTIONS. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED ITS REVISED RETURN ON 27.9.2012 DECLARING AN INCOME OF RS. 9,79,110/ - WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 . SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY. THE AO FRAMED THE ASSESSMENT AT AN INCOME OF RS. 40,13,265/ - BY MAKING THE FOLLOWING ADDITIONS. 1 . DISALLOWANCE OF INTEREST ON TDS 1,970/ - 2 . DISALLOWANCE U/S 14A READ WITH RULE 8D 85,777/ - 3 . DISALLOWANCE OF EXPENSES ON FIXED ASSETS NOT PERTAINING TO ASSESSEE COMPANY 12,53,558/ - 4 . ADDITION U/S 68 - UNVERIFIED SUNDRY CREDITORS 16,92,850/ - ITA NO. 3475 /DEL/201 7 AY 2012 - 13 4 3 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) WHO PASSED THE EX PARTE ORDER AND CONFIRMED THE ADDITION S MADE BY THE AO. NOW, THE ASSESSEE IS IN APPEAL. 4. THE LEARNED SR. DR SUPPORTED THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND SUBMITTED THAT THE ASSESSEE DID NOT APPEAR BEFORE THE LEARNED CIT(A), THEREFORE THE APPEAL WAS DECIDED EX PARTE. 5. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED SR. DR AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LEARNED CIT(A) ALTHOUGH MENTIONED THAT THE NOTICE WAS ISSUED ON 9.9.2016 FOR H EARING OF THE CASE ON 16.9.2016 BUT NONE APPEARED. HOWEVER, IT IS NOT BROUGHT ON RECORD TO SUBSTANTIATE THAT THE SAID NOTICE WAS SERVED UPON THE ASSESSEE. IT IS ALSO NOTICED THAT THE ASSESSEE IN THE STATEMENT OF FACTS ATTACHED WITH APPEAL MEMO HAD STATED A S UNDER: - DUE TO SOME UNFORTUNATE REASONS, THE APPELLANT COULD NOT APPEAR BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). DUE TO NON - APPEARANCE BY THE APPELLANT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) PASSED AN EX - PARTE ORDER WHEREBY THE DISAL LOWANCE AND ADDITIONS MADE BY THE LD. ASSESSING OFFICER WAS UPHELD AND ACCORDINGLY THE APPEAL WAS DISMISSED. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER MAXIM AUDI ALTERAM PARTEM . IN THE PRESENT CASE, IT IS NOT BROUGHT ON RECORD THAT THE NOTICE FOR HEARING WAS SERVED UPON THE ASSESSEE. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND REMAND THE MATTER BACK TO THE FILE OF LEARNED CIT(A) TO BE ADJUDICATED AFRESH, IN A CCORDANCE WITH LAW AFTER PROVIDIN G DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 3475 /DEL/201 7 AY 2012 - 13 4 4 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. P RONOUNCE D IN THE OP EN COURT ON 20 .10 .2017. SD/ - [ N.K. SAINI ] ACCOUNTANT MEMBER DATED: 23 . 10 .2017 SH COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR