BHAVSAGAR DEALERS PVT LTD,DELHI V. ITO WARD-4(1), DELHI

ITA 2445/DEL/2025

AI Insights

The case involves Bhavsagar Dealers Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi, confirming an addition of Rs. 5,45,00,000 to the assessee's income for the A.Y. 2017-18. The addition was initially made by the Assessing Officer (AO) under section 144 of the Income Tax Act, 1961, due to alleged under-valuation of immovable property sold. The CIT(A) upheld this addition, which led to the filing of a rectification application by the assessee under section 154, claiming the addition was based on incorrect facts. The AO's rectification order was also challenged, leading to the current appeal. The Tribunal decided to restore the matter to the CIT(A) for a fresh decision, emphasizing the need for a thorough examination of the additional evidences and proper adherence to procedural norms.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 823018 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 15-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Assessee Lawyers: SACHIN JAIN
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Sale consideration of property below Jantri Value; Cost of acquisition; Principle of natural justice; Rectification of order; FORM 26AS
• Section: 144; 142(1); 154; 50C

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No.2445/Del/2025, A.Y. 2017-18 Bhavsagar Dealers Pvt. Ltd. G-29, NDM-1, Netaji Subhash Place, Pitampura, New Delhi PAN: AACCB7802Q Vs. Income Tax Officer, Ward 4(1), Delhi (Appellant) (Respondent) Appellant by Sh. Sachin Jain, CA Respondent by Sh. Ajay Kumar Arora, Sr. DR Date of Hearing 15/12/2025 Date of Pronouncement 24/12/2025 O R D E R PER RAJ KUMAR CHAUHAN , J.M. : 1. This appeal is filed by the assessee /appellant against the order of Learned Commissioner of Income Tax (Appeals)/ NFAC, Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 2 13.02.2025 for the A.Y. 2017-18 wherein the assessment order dated 23.12.2019 was upheld and addition of Rs. 5,45,00,000/- was confirmed. 2. The facts in brief as culled out from the order of the authorities below are that the appellant/assessee company has filed its return of income for the assessment year (A.Y.) 2017-18 on 29.09.2017 showing income of Rs. 56,26,520/-. The said return was duly processed under section 143(1) of the Act. The case was selected for limited scrutiny by issuing statutory notice under section 142(1) of the Act which was duly served upon the assessee. The assessee company did not comply with the notice. The show cause notice was also issued but the assessee failed to comply the same, hence the ex parte assessment order under section 144 of the Act was passed by making an addition of Rs. 5,45,00,000/- on the ground that on perusal of form 26QB downloaded from departmental online system, it is seen that the total amount of property sold during the financial year 2016-17 relevant to assessment year 2017- 18 to various parties for value amounting to Rs. 19,71,40,000/- but the received amount by the assessee company has been shown as Rs. 14,26,40,000/-, thus, under valuation of immovable property sold by Rs. 5,45,00,000/-. Accordingly, the said amount was treated as capital Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 3 gain of the assessee and was added to the total income under section 50C of the Act. 3. Aggrieved by the assessment order, the assessee filed rectification application under section 154 of the Act on 14th March, 2020 stating that the addition in the sale consideration of Rs. 5,45,00,000/- was against the facts appeared in assessee’s form 26AS and the addition was made wrongly on the basis of form 26QB by the AO and hence, request was made to correct the apparent mistake on record. It is stated that instead of rectifying the mistake, the AO simply issued a notice under section 154 of the Act on 15.09.2021 for disallowance of indexed cost of acquisition which was originally allowed at the time of passing of the assessment order. And vide order dated 16.08.2022, a demand of Rs. 79,19,322/- was created and served upon the assessee on 23.11.2022. The said order dated 16.08.2022 under section 154 of the Act was challenged before the Ld. CIT(A) who has dismissed the appeal observing that the rectification order passed by the AO was in order and further the levy of tax @ 20% on the long term capital gain of Rs. 5,45,00,000/- earned by the appellant was justified and further that the order under section 154 of the Act was not barred by limitation because the assessment was completed on 23.12.2019 and the rectification order Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 4 was passed on 16.08.2022, which is well within four years provided in sub section (7) of Section 154 of the Act. 4. Aggrieved by the impugned order, the assessee has filed appeal before us and has raised following ground of appeal: 1.“That the order passed u/s 154 by the Ld. AO and confirmed by the CIT (A) deserves to be quashed since the same were passed without following the provisions of the Income Tax Act, 1961 on various legal issues including jurisdictional issue. 2. That the order passed u/s 154 by the Ld. AO & and order passed by the CIT (A) deserves to be quashed since the same were passed without following the Principals of Natural Justice, settled law as declared by various Courts and without application of mind. 3.That the Ld. AO passed the order u/s 154 which is barred by limitation since the application u/s 154 was filed by assessee on 04.09.2021 and the order passed beyond the statutory time limit. 4. That under the facts and circumstances of the case, the Ld. AO erred in disallowing the Long-Term Capital Loss amounting to Rs. 3,06,38,662/-. 5. That the appellant craves leave to add, amend, alter or withdraw any ground of appeal at the time of hearing with the permission of the Hon'ble ITAT, Delhi Bench.” 5. We have heard the Ld. AR and Ld. DR. Ld. AR at the very outset pointed out that the quantum addition of Rs. 5,45,00,000/- made by the AO and confirmed by the ld. CIT(A) was set aside by the Ld. Tribunal and the matter was restored to the file of the Ld. CIT(A) for Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 5 deciding afresh by the Ld. Co-ordinate Bench of Delhi Tribunal in ITA No. 594/Del/2025 for A.Y. 2017-18. It was therefore, argued that the impugned order be set aside. 6. The Ld. DR, in that regard, submitted that the issue raised in the present appeal can also be restored to the concerned Ld. CIT(A), who is seized of the entire matter with respect to the quantum addition, which is also the subject matter of the present appeal. 7. We have considered the rival submissions and have perused the material available on record. In the given facts and circumstances, we are of the considered opinion that in order to avoid the multiplicity of decision, it is expedient in the interest of justice that the grounds raised in the present appeal need to be considered and decided by the Ld. CIT(A) concerned who is seized with the matter as per direction given by the Ld. Co-ordinate Bench in ITA No. 594/Del/2025 (supra). To ascertain the relevant directions to the concerned Ld. CIT(A), the order of the ld. Co-ordinate Bench is reproduced as under: “This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 23.12.2024 for A.Y. 2017-18. Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 6 2. The only issue arising out of the 5 grounds of appeal raised by the assessee is against the addition of Rs. 5,45,00,00/- made by the Assessing Officer. 3. Briefly stated, the facts of the case are that the assessee filed its Return of Income on 29.09.2017 declaring an income of Rs. 56,26,520/-Return was selected for limited scrutiny assessment through CASS and accordingly, statutory notices were issued and served upon the assessee. The AO passed an order u/s 144 wherein he made an addition of Rs 5,45,00,000/- u/s 50C on account of difference in sale value of the Immovable property as declared by the assessee and the buyer. On appeal before the CIT(A), the assessee failed and the additional evidences submitted before the CIT(A) were declined to be considered u/r 46A. 4. At the very outset of the opening of the arguments, the ld, counsel for the assessee vehemently contended that the Id. CIT(A) did not consider the additional evidences furnished by the assessee and hence the appeal may be set aside for adjudication afresh. 5. The Id. DR on the other hand did not seriously object to the same. 6. We have heard the rival submissions and have perused the relevant material on record. We find substance in the arguments of the Id. counsel for the assessee. We are, therefore, of the considered view that in the interest of Justice and fair play, it would be fit to restore the issues to the file of the Id. CIT(A) for adjudication afresh after affording sufficient opportunity of being heard to the assessee. 7. The CIT(A) is directed to consider the additional evidences and documents and decide the issues afresh after getting report from the Assessing Officer and affording reasonable and adequate opportunity of being heard to the assessee. The assessee is also directed to provide necessary information/documents as required by the authorities. 8. In the result, appeal of the assessee in ITA No. 594/DEL/2025 is allowed for statistical purposes. The order is pronounced in the open court on 08.10.2025.” Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 7 8. It is to be noticed that the concerned Ld. CIT(A), who is now seized with the matter as per above direction of the ld. Co-ordinate Bench, is required to follow the procedure laid down under section 250(6) of the Act while disposing of the appeal. The Ld. CIT(A) is required to state the points of determination, decision thereon, and the reasons for the decision. 9. Therefore, the present appeal is restored to the file of the Ld. CIT(A) who is dealing with the quantum appeal with the direction to consider the points raised by the assessee before us in the present appeal as per law. The appeal of the assessee is disposed of accordingly as per the above direction. 10. In the result, the appeal of the assessee is accordingly allowed in above terms for statistical purposes. Order pronounced in open Court on 24th December, 2025 Sd/- Sd/- (M.BALAGANESH) (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24/12/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent Printed from counselvise.com ITA No. 2445/Del/2025 Bhavsagar Dealers P. Ltd. 8 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "