Income Tax Appellate Tribunal - Mumbai
Surekh Hansraj Shah, Mumbai vs Acit- 16(2), Mumbai on 13 March, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC" BENCH, MUMBAI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA no.3225/Mum./2018
(Assessment Year : 2011-12)
Surekh Hansraj Shah
23, Motilal Kanji Building
Navroji Street, Thakurwdwar ................ Appellant
Mumbai 400 007
PAN - ARTPS0346P
v/s
Asstt. Commissioner of Income Tax
................ Respondent
Circle-16(2), Mumbai
Assessee by : None
Revenue by : Shri Vivek Anand Ojha
Date of Hearing - 05.03.2019 Date of Order - 13.03.2019
ORDER
Aforesaid appeal has been filed by the assessee challenging the order dated 12th March 2018, passed by the learned Commissioner (Appeals)-30, Mumbai, for the assessment year 2011-12.
2. In the present appeal, the assessee has challenged couple of additions made by the Assessing Officer by disallowing expenditure under section 37(1) and section 14A of the Income-tax Act, 1961 (for short "the Act").
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Surekh Hansraj Shah
3. Brief facts are, the assessee is an individual. For the assessment year under dispute, the assessee filed his return of income on 27 th September 2011, declaring total income of ` 41,42,513. In the course of assessment proceedings, the Assessing Officer noticing that the assessee has claimed deduction on account of professional fees paid of ` 8,273, called upon for necessary details. On perusing the details, he found that the assessee has only income from partnership firm and has derived no other business income. Therefore, observing that the expenditure incurred is not directly related to the business activity, he disallowed an amount of ` 8,273 under section 37 of the Act. Further, he found that the assessee has claimed deduction of interest expenditure amounting to ` 31,02,917. Further, he found that the assessee has earned exempt income by way of shares in profit of the partnership firm amounting to ` 2,94,746. He, therefore, called upon the assessee to explain why the proportionate amount from the interest expenditure should not be disallowed for earning exempt income. Though, the assessee objected to the proposed disallowance, however, the Assessing Officer disallowed an amount of ` 2,01,767, out of the interest expenditure under section 14A of the Act. Being aggrieved with the aforesaid disallowance, the assessee preferred appeal before the first appellate authority.
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Surekh Hansraj Shah
4. As observed by the learned Commissioner (Appeals), in spite of several opportunities being granted to the assessee, no one appeared to represent the case on behalf of the assessee. Therefore, alleging that the assessee could not substantiate its claim of expenditure the learned Commissioner (Appeals) upheld the additions made by the Assessing Officer.
5. When the appeal was called for hearing, neither anyone appeared on behalf of the assessee nor did the assessee file any application seeking adjournment. Further, hearing notice issued by the Registry through registered post has returned back un-served by the postal authorities. In view of the aforesaid, I proceed to dispose of the present appeal ex-parte qua the assessee after hearing the learned Departmental Representative.
6. Heard the learned Departmental Representative and perused material on record. As could be seen, the Assessing Officer made the disputed additions since the assessee could not properly justify his claim. As observed by learnewd Commissioner (Appeals), in the appeal proceedings the assessee did not appear even after reasonable opportunity of being heard, hence, he proceeded to dispose of the appeal ex-parte and sustained the additions made by the Assessing Officer. Before the Tribunal assessee has raised a ground stating that 4 Surekh Hansraj Shah after allowing assessee's request for adjournment on the last date of hearing learned Commissioner (Appeals) has passed the order ex parte. Therefore, without delving deep into the controversy due to who's fault appeal was decided ex parte, I am of the view, interest of justice would be best served if one more opportunity is granted to the assessee to represent his case before learned Commissioner (Appeals). Accordingly I set aside the impugned order of learned Commissioner (Appeals) and restore the issues relating to the disputed additions to the file of learned Commissioner (Appeals) for de novo adjudication after due opportunity of being heard to the assessee. Assessee is also directed to cooperate in finalization of the appeal proceeding. Grounds raised are allowed for statistical purposes.
7. In the result, assessee's appeal is allowed for statistical purposes.
Order pronounced in the open Court on 13.03.2019 SD/-
SAKTIJIT DEY
JUDICIAL MEMBER
MUMBAI, DATED: 13.03.2019
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Surekh Hansraj Shah
Copy of the order forwarded to:
(1) The Assessee;
(2) The Revenue;
(3) The CIT(A);
(4) The CIT, Mumbai City concerned;
(5) The DR, ITAT, Mumbai;
(6) Guard file.
True Copy
By Order
Pradeep J. Chowdhury
Sr. Private Secretary
(Sr. Private Secretary)
ITAT, Mumbai