2015 (7) TMI 1018 - AT - Income Tax

Addition on Sale of Share Application Money - Held that - No doubt the assessee remained non-cooperative before the AO as well as Ld. CIT(A), but after the reading of the affidavits filed by Smt. Sunita Jindal, W/o Late Shri Ravi Kiran Jindal and Smt. Swati Jindal, CA, Daughter in Law of Late Shri Ravi Kiran Jindal, Advocate in which they have stated that after the death of Late Sh. Ravi Kiran Jindal, Advocate, the employee of Late Sh. Ravi Kiran Jindal, has not properly pursued the matter before the AO as well as before the Ld. CIT(A) and they have decided the issue in dispute against the assessee in spite of the fact of the relevant evidence are available with the record. We are of the considered view that due to failure of the assessee s counsel and due to unavoidable circumstances for non-producing the relevant evidence and non-appearance before the Revenue Authorities, assessee should not be suffered. Therefore, in the interest of justice, the issue in dispute is set aside De novo to the AO to decide the same afresh, under the law, after giving full opportunity to the assessee of being heard for substantiating its claim. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Addition of Rs. 16 Lacs in assessment year 2004-05.
2. Disallowance of loss of Rs. 1,71,794.
3. Request for setting aside the issue for fresh assessment.

Analysis:
1. The appeal was against the addition of Rs. 16 Lacs by the AO on account of Sale of Share Application Money. The assessee argued that the AO ignored case laws and the genuineness of the transaction was proved through bank statements and ROC records. The assessee requested the issue to be set aside for a fresh assessment. The Ld. CIT(A) upheld the addition without proper opportunity to the assessee. The Tribunal set aside the issue for the AO to decide afresh, considering all evidence and providing a full opportunity to the assessee for substantiating its claim.

2. The disallowance of the loss of Rs. 1,71,794 was made without any basis according to the assessee. The AO did not raise any queries regarding this loss in the return of income. The Ld. CIT(A) also did not provide any findings on this matter. The Tribunal noted the lack of proper opportunity for the assessee to present evidence and arguments. The issue was set aside for fresh assessment to ensure justice and full hearing for the assessee.

3. The assessee's counsel faced unavoidable circumstances due to the death of the advocate handling the case. The employee handling the matter lacked the expertise required for income tax proceedings. Affidavits were filed by family members explaining the situation. Despite the non-cooperation of the assessee, the Tribunal considered the circumstances and set aside the issue for a fresh assessment by the AO. This decision was made in the interest of justice to allow the assessee a fair opportunity to present evidence and arguments.

In conclusion, the Tribunal allowed the appeal for statistical purposes and set aside the issues for fresh assessment by the AO, emphasizing the importance of providing a full opportunity for the assessee to substantiate their claims and present relevant evidence.