Appeal allowed by ITAT Hyderabad for additional grounds and evidence, remitted for denovo consideration

The appeal against the dismissal by the Commissioner of Income Tax (Appeals) - 2, Hyderabad, was allowed by the ITAT Hyderabad for statistical purposes. The additional grounds of appeal and evidence were remitted to the Assessing Officer for denovo consideration, granting the appellant a fair opportunity of hearing. The decision was pronounced on 16th January 2019, providing relief to the appellant in challenging the dismissal and addressing the issues related to share application money and disallowance of expenses.

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Issues:
1. Dismissal of appeal by the Commissioner of Income Tax (Appeals) - 2
2. Addition of share application money and disallowance of expenses
3. Failure to produce confirmation letters and relevant documents
4. Dismissal of appeal ex-parte by the CIT(A)
5. Request for admission of additional grounds of appeal
6. Admission of additional evidence under rule 29 of the ITAT Rules

Analysis:

1. The appeal was filed against the order of the Commissioner of Income Tax (Appeals) - 2, Hyderabad, which dismissed the appeal of the appellant. The grounds of appeal included challenges to the dismissal, confirmation of addition of share application money, and disallowance of expenses. The appellant argued that the dismissal was against the law and facts of the case, and that the appellant should not be expected to prove the source of the credits appearing in their books.

2. The Assessing Officer observed that the assessee received share application money pending allotment from various parties but failed to provide confirmation letters, bank account statements, and income tax returns for all parties. The AO treated the unexplained share application money as income under Section 68 of the Income Tax Act. Additionally, expenses of the company were disallowed as they were not deemed to relate to the income earned during the year.

3. The CIT(A) dismissed the appeal ex-parte due to the lack of response to posting notices. The appellant contended that they had responded to the posting notices requesting adjournment, which the CIT(A) failed to acknowledge. The appellant also sought to present additional grounds of appeal before the Hon'ble Tribunal, highlighting that fundamental issues were not raised in detail due to oversight and inadvertence.

4. The ITAT Hyderabad allowed the appeal for statistical purposes, remitting the additional grounds of appeal and evidence to the Assessing Officer for denovo consideration. The appellant was granted a fair opportunity of hearing in this regard. The decision was pronounced in an open court on 16th January 2019.

This detailed analysis covers the issues raised in the judgment, the arguments presented by the appellant, and the ultimate decision rendered by the ITAT Hyderabad.

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