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2021 (2) TMI 1068 - AT - Income TaxEx-party appeal decided by CIT-A - As per CIT-A appellant does not appear to be serious in prosecuting its appeal as despite number of notices were given on the last available address as per Form 35, no compliance has been made on behalf of the appellant - HELD THAT - Nowhere it is mentioned in the impugned order, whether the notices sent by the Ld. CIT(A) were received by the assessee or not. As mentioned earlier, the assessee has filed before the AO a letter dated 30.11.2017 received in the office of the AO on the same date stating that the entire amount of ₹ 49,99,365/- does not form part of the purchases debited to the profit and loss account ; ₹ 22,93,114/- relates to fixed assets purchases and ₹ 27,06,250/- to other purchases. Assessee deserves reasonable opportunity of being heard by the Ld. CIT(A). Therefore, we set aside the impugned order and restore the matter to the file of the Ld. CIT(A) to make an order afresh after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the Ld. CIT(A). Appeals are allowed for statistical purposes.
Issues:
1. Disallowance of purchases as bogus 2. Computation of profit for section 28 of the Income Tax Act 3. Compliance and opportunity of being heard before the CIT(A) Issue 1: Disallowance of purchases as bogus: The case involved cross-appeals by the Assessee and the Revenue against the order of the Commissioner of Income Tax (Appeals) arising from an assessment under the Income Tax Act. The Assessee challenged the disallowance of purchases as bogus, arguing that compliance was made on the Income-tax Department's website. The Revenue contended that the purchases were deemed bogus due to suspicion and lack of verification. The Tribunal noted discrepancies in the AO's estimation of profit and directed a fresh assessment by the CIT(A) after providing the Assessee with a reasonable opportunity to be heard. Issue 2: Computation of profit for section 28 of the Income Tax Act: The Revenue raised concerns about the CIT(A) computing profit under section 28 of the Act based on alleged bogus bills. The Revenue argued that goods were not received against these bills and questioned the source of payments. Additionally, references were made to Supreme Court and High Court decisions on similar issues. The Tribunal acknowledged the Revenue's contentions but emphasized the need for clarity on payment sources and applicability of relevant sections. The matter was remanded to the CIT(A) for a fresh decision after considering all aspects. Issue 3: Compliance and opportunity of being heard before the CIT(A): The Tribunal observed that the CIT(A) had passed an ex-parte order due to the Assessee's non-compliance and lack of serious prosecution of the appeal. However, it was noted that the Assessee had submitted relevant details to the AO, indicating that certain purchases were for fixed assets and not debited to the profit and loss account. The Tribunal deemed it necessary for the Assessee to have a reasonable opportunity to present its case before the CIT(A) and directed a fresh hearing with submission of relevant documents. Consequently, the impugned order was set aside, and the matter was remanded for a fresh decision. In conclusion, the Tribunal allowed the appeals for statistical purposes and directed a fresh assessment by the CIT(A) after providing the Assessee with a fair opportunity to present its case and submit necessary evidence.
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