The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to Commissioner of Income Tax(Appeals)[CIT(A)] for fresh consideration and imposed a cost of Rs.10,000 on the assessee for non-compliance with notices.
Agrawal RajeshkumarBabulal,appellant-assessee, a Hindu Undivided Family ( HUF ) engaged in commercial crop business under M/s. Shree Mahavir Trading Co., filed a Nil income return for A.Y. 2017-18 on July 7, 2018. The case underwent scrutiny under Computer Assisted Scrutiny Selection(CASS), and the assessment under Section 143(3) of the Act,was completed on December 31, 2019, with a total income of Rs.5,12,74,637.
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Additions included Rs.3,73,59,007 for profit transferred to others, Rs.1,18,36,232 disallowed as interest under Section 37, and Rs.20,79,398 disallowed as godown rent. The assessee aggrieved by the order of the Assessing Officer (AO) appealed before the CIT(A) which was later dismissed.
The assessee dissatisfied by the decision of the CIT(A) appealed before the tribunal.
The assessee’s counsel, stated that the CIT(A) issued an ex-parte order due to the assessee’s non-compliance. He requested the matter be remanded for a fresh hearing, assuring full compliance by the assessee if another opportunity was granted.
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The tribunal carefully considered the submissions and found that the AO’s additions were based on facts. The Rs.3,73,59,007 addition for profit transferred to others was upheld as the assessee failed to provide evidence like challans or invoices. The Rs.1,18,36,232 addition for interest payment was confirmed due to unsupported ledger entries. The Rs.20,79,398 addition for godown rent was sustained as no evidence of storage need or rental agreement was provided.
The two member bench comprising T.R Senthil Kumar(Judicial Member) and Narendra Prasad Sinha(Accountant Member) observed that the AO’s additions required verification of documentary evidence, which was not examined as the assessee failed to comply during the appellate proceedings. The case was remanded to the CIT(A) with directions to provide the assessee another opportunity to submit evidence and decide the matter on merits.
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The appellate tribunal noted the assessee’s repeated non-compliance despite receiving four notices from the CIT(A) and imposed a cost of Rs.10,000, to be paid within two weeks. The CIT(A) was instructed to proceed only after verifying the payment.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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