M/s Raman Kumar Sawhney vs ITO

Anadee Nath Misshra, AM

(A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-17, New Delhi, ["Ld. CIT(A)", for short], dated 27.10.2016 for Assessment Year 2012-13. The grounds of appeal are as under:

That the order of the Ld. Commissioner of appeals and the ld. ITO are bad at law and on facts of the case.

That proper opportunity was not granted to the assessee for presenting the proper facts of the case thus violating the principles of natural Justice.

That the additions made by the Ld. ITO and confirmed by the Ld. CIT (Appeals) are not justified. As during the course of appeal there was a change in the counsel to whom sufficient time was not granted to prepare and submit the requisite evidences and contest the case. There was confusion because the date was fixed for 25th October 2016 and by department as mistake it was kept in the date of 26.10.2016 which was not intimated to the counsel nor the assessee as is clear from the copy of CIT order showing date of hearing as 26.10.2016.

That the addition U/s 68 made for Rs 26., 55., 000/- from relatives has wrongly been added.

That the addition U/s 68 made of Rs 3,30,000/- for cash deposited in bank account from earlier withdrawals from bank has been wrongly added.

That the addition U/s 68 made for 30,20,000/- has wrongly been added.

That the addition of Rs 10,55,800/- made by the ld. A.O U/s 68 and directed by the Ld. CIT to be made U/s 41(1) is baseless as the amounts were not found credited in the books in the year under scrutiny nor there was any remission in liability during the year under assessment. Therefore it has been wrongly added.

That the addition U/s 68 made for 23,53,000/- has wrongly been added.

That Disallowing loss of Rs 34,943/- as account of F & 0 share trading activities without viewing the details is unjustified.

That disallowance of commission of Rs 200,000/-which is in ordinary course business is not justified.

That disallowance of 20% on account of personal expenses is not justified.

That the benefit of brought forward losses has not been Provided.

That the other disallowance although nominal in amount as shown under have neither been discuss not the AO nor Specified any reason of those disallowances.

S.No.

Particular

Amount

1.

Difference in Depreciation

19

2.

Interest Paid on Service Tax Being Penal in nature

30,900

3.

STT, Service Tax and Stamp duty not incidental to business activities

29,516

4.

Transaction Charges on Shares not incidental to business

2,188

5.

Demat Charge not incidental to business

1,785

6.

Brokerage on Shares not incidental to business

2,459

The appellant craves leave to add, alter, delete and modify all or any of the grounds of appeal, at any time during the course of this appeal and request and opportunity of being heard before the order are passed on this appeal."

(B) Assessment Order was passed on 16.03.2015 Under Section 143(3) of Income Tax Act, 1961, ("I.T. Act", for short) wherein total income of the Assessee was determined at Rs. 80,52,480/- as per following computation:

Income from House Property

Income as declared

1,74,052

Business income

Net Loss as per P & L a/c

(-) 19,94,840

Less: STCG & LTCG (Rs. 504402 + 34943) for separate consideration

5,39,345

(-) 14,55,495

Other income for separate consideration (Rs. 281375 + 248645+ 16113+ 25777)

(-) 5,71,911

(-) 20,27,405

Less: Difference in Depreciation Claim

19

Interest paid on Service tax being penal in nature

30,900

STT, Service tax and Stamp duty not incidental to business activitie

29,516

Transaction charges on shares not incidental to business

2,188

Demat Charge not incidental to business

1,785

Brokerage on shares not incidental to business

2,459

Unexplained credits u/s 68 of the Act

26,55,000

Unexplained cash deposits to Capital A/c u/s 68

3,30,000

Unexplained credits u/s 68

30,20,000

Disallowance of commission to R.K. Sawhney HUF

2,00,000

Unexplained credits u/s 68

10,55,800

Unexplained credits u/s 68

23,53,000

Disallowance out of Car expenses

83,791

97,64,458

79,11,105

Short-term capital Loss

0

Short-term Capital loss on a/c of F & O

0

79,11,554

Income from other sources

Bank interest as declared

14,278

Interest on NSC

2,41,843

Interest on I.T refund

23,604

IFCI Infra bonds

1650

2,81,375

81,92,480

Less: Deduction u/s 80C, 80D & 80CCF

1,40,00

Taxable income

80,52,480

Or say : Rs. 80,52,480/-

(B.1) The Assessee filed appeal before the Learned Commissioner of Income Tax (Appeals)-17, New Delhi. The Assessee did not appear before the Ld. CIT(A) during appellate proceedings before the Ld. CIT(A), and filed requests for adjournments repeatedly. Vide ex-parte order dated 27.10.2016, the Ld. CIT(A) dismissed the assessee's appeal on merits, on the basis of details / materials available on his record. The Assessee has filed the present appeal in Income Tax Appellate Tribunal ("ITAT", for short) against the aforesaid impugned ex-parte order dated 27.10.2016 of the Ld. CIT(A). When the appeal came up before us for hearing, the Ld. Counsel for assessee requested for restoration of the disputed issues in this appeal to the file of the Ld. CIT(A) for fresh order, so that the assessee has an opportunity of being heard by the Ld. CIT(A). The Ld. Departmental Representative ("DR", for short) also agreed that all the disputed issues in the present appeal in ITAT filed by the Assessee may be restored to the file of the Ld. CIT(A) for fresh order on merits, provided the assessee co-operates in speedy disposal of appeal by the Ld. CIT(A) and does not take unnecessary adjournments.

(C) We have heard both sides. We have perused the materials available on record. We find that the Ld. CIT(A) passed an ex-parte order in which assessee's submissions could not be considered because of failure of the assessee to avail of opportunities provided by the Ld. CIT(A). Before us both sides are in agreement that all the disputed issues may be set aside to the file of the Ld. CIT(A) for fresh adjudication on merits. Accordingly, we set aside the impugned ex-parte order dated 27.10.2016 of Ld. CIT(A), and restore all the disputed issues to the file of the Ld. CIT(A) for fresh orders on merits after providing opportunity of being heard to the assessee. The Assessee is also directed to co-operate in speedy disposal of appeal before the Ld. CIT(A) in pursuance to this order; and , to not request unnecessary adjournments. The assessee is further directed to appear in the office of the Ld. CIT(A) on 15.10.2019 for receiving notice of hearing from the office of the Ld. CIT(A).

(D) In the Result, appeal of the Assessee is partly allowed.