RATAN JAMSHEDJI BATLIBOI, MUMBAI V. CIT (A), NFAC, DELHI

ITA 456/MUM/2023

AI Insights

The case involves two appeals by the assessee, Ratan Jamshedji Batliboi, against the orders of the National Faceless Appeal Centre (NFAC)/CIT(A), which were passed under section 250 of the Income Tax Act. The appeals were consolidated due to the commonality of issues involved. The primary disputes in the appeals included the disallowance of expenses under section 14A and the addition of a capital receipt as income. The assessee argued that the expenses disallowed were not actually incurred and that the capital receipt should not be taxed as income, referencing a previous ITAT decision in their favor. The CIT(A) had dismissed the appeals due to non-compliance by the assessee in attending hearings, which the Tribunal found to be a procedural oversight, warranting a re-examination of the case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125815 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-04-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 15-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KISHOR CHAUDHRI
• Keywords: Capital receipt
• Section: 143(3); 142(1); 14A; 143(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHIR PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA Nos. 456 & 391/Mum/2023 (A.Y: 2012-13 & 2013-14) RatanJamshedjiBatliboi, 33 Raaj Mahal, Altamount Road, Kemps Corner, Mumbai-400026. Vs. CIT (A) NFAC, Room No. 245-A, North Block, New Delhi-110001. PAN/GIR No. : AASPB0864F Appellant .. Respondent Appellant by : Shri. Kishor Chaudhri.AR Respondent by : Smt. Mahita Nair, Sr.DR Date of Hearing 18.04.2023 Date of Pronouncement 20.04.2023 आदेश / O R D E R PER PAVAN KUMAR GADALE JM: These are the two appeals filed the assessee against the different orders of the National Faceless Appeal Centre (NFAC)/CIT(A), Delhi passed u/s 250 of the Act. At the time of hearing, the Ld.AR of the assessee submitted that there is a delay of 3 days in filing the appeal before the Hon’ble Tribunal in ITA no 391/M/2023 and filed the application. We found the ITA Nos. 391 & 456/Mum/2023 Ratan Jamshedji Badliboi, Mumbai. - 2 - facts mentioned are reasonable and the Ld. DR has no specific objections. Accordingly, condone the delay and admit the appeal. Since the issues involved in these two appeals are common and identical hence are clubbed, heard and consolidated order is passed. For the sake of convenience, we shall take up the ITA No. 391/Mum/2023 for the A.Y. 2013-14 as a lead case and the facts narrated. The assessee has raised the following grounds of appeal: 1. The Assessing Officer has erred in disallowing Rs. 1,25,832/- 125832 u/s 14A of the Income Tax Act, 1961(ii) The Assessing Officer has ignored the fact no such expense has been actually incurred by the assessee. (iii) The Assessing Officer has failed to appreciate that the disallowance u/s 14A cannot be more than the dividend income 2.2(i) The Assessing Officer has also erred in adding Compensation from Mazda Construction (P) Ltd. Of Rs. 69, 13,649/-, which is a Capital Receipt. (ii) The Assessing Officer has ignored the fact that on the same facts and circumstances of the earlier years, the matter has been decided in the favour of the assessee by ITAT. ITA Nos. 391 & 456/Mum/2023 Ratan Jamshedji Badliboi, Mumbai. - 3 - 3.The Assessing Officer erred in not following the judicial discipline. 4. The Commissioner of Income Tax (Appeals) failed to observe that this was a covered matter in the case of the assessee himself. 5 .The Commissioner of Income Tax (Appeals) erred in not granting adequate opportunity of hearing to the assessee. 6. The assessee reserves a right to add to, amend, alter modify or substitute the grounds of appeal 2. The brief facts of the case are that the assessee is engaged in the profession of Architect and has disclosed income from profession, capital loss and income from other sources. The assessee has filed the return of income for the A.Y 2013-14 on 25.09.2013 with the total income of Rs.9,35,960/- and the return of income was processed u/s 143(1) of the Act. Subsequently the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act was issued. In compliance to the notice, the Ld. AR of the assessee appeared from time to time, submitted information and the case was discussed. On perusal of the financial statements the Assessing Officer(AO) found that the assessee has received compensation from M/s. Mazda Construction Co. of Rs. 69,13,649/- ITA Nos. 391 & 456/Mum/2023 Ratan Jamshedji Badliboi, Mumbai. - 4 - and was not offered for tax and the AO has issued show cause notice. In compliance to the show cause notice, the assessee has explained that the compensation is a capital receipt and also submitted that in the earlier year the Honble ITAT has deleted the addition. But the Assessing officer observed that the revenue has not accepted the decision of the Hon’ble ITAT and filed an appeal before the Honble High court and is pending. Finally the AO has made addition of compensation of Rs.69,13,649/- and treated as income from other sources. Similarly the AO has made disallowance u/s 14A of Rs. 1,25,832/- and assessed the total income of Rs. 79,75,441/- and passed the order u/s 143(3) of the Act dated 11.03.2016. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the ITA Nos. 391 & 456/Mum/2023 Ratan Jamshedji Badliboi, Mumbai. - 5 - order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the submissions made in the assesseement proceedings. Further the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld.CIT(A) has issued the notices of hearing referred at Para 4 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and ITA Nos. 391 & 456/Mum/2023 Ratan Jamshedji Badliboi, Mumbai. - 6 - decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal and we allow the grounds of appeal of the assessee for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. ITA No. 456/Mum/2023, A.Y 2012-13 7. As the facts and circumstances in this appeal are identical to ITA No. 391/Mum/2023, for the A.Y 2013- 14 and the decision rendered in the paragraph 5 would apply mutatis mutandis for this appeal also. ITA Nos. 391 & 456/Mum/2023 Ratan Jamshedji Badliboi, Mumbai. - 7 - Accordingly, the grounds of appeal of the assessee are allowed for statistical purposes. 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes Order pronounced in the open court on 20.04.2023. Sd/- Sd/- (BR BASKARAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 20.04.2023 KRK, PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT (Judicial) 4. The PCIT 5. DR, ITAT, Mumbai 6. Guard File आदेशान ु सार/ BY ORDER, //True Copy//() 1. ( Asst. Registrar) ITAT, Mumbai