2013 (1) TMI 938 - AT - Income Tax

Summary

Issues Involved: Appeal against CIT (Appeals) order sustaining addition u/s 41(1) of Income-tax Act, violation of principles of natural justice.

Appeal against CIT (Appeals) Order:
The appellant, a wholly owned subsidiary of Air India Limited, filed an appeal against the order of CIT (Appeals)-IV, New Delhi dated 09.03.2012. The appellant, engaged in air transportation business, declared a loss of &8377; 15,67,17,875 for the assessment year 2008-09. An addition of &8377; 306.75 crores was made u/s 143(1) of the Income-tax Act, which was confirmed by CIT (A). The appellant challenged this addition on grounds including the order being bad in law and facts, and the CIT (A) not appreciating that the liability amount was not written back in the appellant's books.

Violation of Principles of Natural Justice:
The appellant contended that the CIT (A) violated principles of natural justice by relying on unreported judgments without giving the appellant an opportunity to explain its case in light of those judgments. The appellant requested the appeal to be restored to the file of the CIT (A) for a fair consideration based on the unreported judgments from various High Courts and ITAT. Both parties did not object to restoring the issues to the file of the CIT (A).

Judgment and Direction:
After hearing both sides, the ITAT decided to restore the appeal to the file of the CIT (A) with a direction for the CIT (A) to provide the appellant with copies of the unreported judgments from other High Courts and ITAT. The appeal of the assessee was allowed for statistical purposes. The order was pronounced on 10th January 2013 after the conclusion of the hearing.