2011 (12) TMI 639 - AT - Income Tax

Summary

Issues involved: Appeal against order of Ld. CIT(A) for asstt. year 2006-07 - Disallowance of job work expenses - Addition in value of fringe benefit.

Disallowance of job work expenses: The assessee appealed against the disallowance of Rs. 36,49,370 out of job work expenses. The Ld. CIT(A) upheld the addition made by the Ld. AO under section 40a, as the assessee failed to provide any arguments or evidence in support of the appeal. The Ld. First Appellate Authority did not discuss the issue in detail and the order was deemed not in accordance with the mandate of sub section (6) of section 250 of the Income Tax Act 1961. The ITAT Delhi allowed the appeal, setting aside the order of Ld. CIT(A) and restoring the issue for readjudication by the Ld. First Appellate Authority after providing due opportunity of hearing to the assessee.

Addition in value of fringe benefit: The second substantial ground of appeal was the addition of Rs. 13,89,645 in the value of fringe benefit. The Ld. CIT(A) confirmed this addition as the Ld. AR did not put forth any arguments in support of the appeal. The ITAT Delhi found that the Ld. First Appellate Authority failed to consider the material on record and did not discuss the issue adequately. Consequently, the ITAT Delhi allowed the appeal, setting aside the order of Ld. CIT(A) and remanding the issue for readjudication by the Ld. First Appellate Authority after providing the assessee with a proper opportunity of hearing.

Conclusion: The ITAT Delhi allowed the appeal of the assessee against the disallowance of job work expenses and the addition in the value of fringe benefit, setting aside the order of Ld. CIT(A) and remanding both issues for readjudication by the Ld. First Appellate Authority with the directive to provide the assessee with a fair opportunity of hearing.