EMERGING MULTITADE PRIVATE LIMITED,MUMBAI V. WARD 6(2)(4) , MUMBAI

ITA 3564/MUM/2025

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Emerging Multitrade Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which confirmed the assessment order passed by the Assessing Officer for the assessment year 2014-15. The primary contention was regarding the additions and disallowances made under sections 143(3) and 50C of the Income Tax Act, 1961, which the assessee argued were made without proper jurisdiction and in violation of the principles of natural justice. The Tribunal noted that the assessee had not received the notices for the appellate proceedings, leading to a decision to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713053 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUNKHE
• Assessee Lawyers: SHASHANK MEHTA
• Keywords: Set aside; Corroborative evidences; Sale consideration of property below Jantri Value; Principle of natural justice
• Section: 143(3); 142(1); 271(1)(c); 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 3564/MUM/2025 Assessment Year: 2014-15 Emerging Multitrade Pvt. Ltd., 396, Kamat Industrial Estate, Veer Savarkar Marg, Prabhadevi, Mumbai-400025. Vs. Ward 6(2)(4), Aayakar Bhavan, 5th floor, M.K. Road, Mumbai-400020. PAN NO. AACCE 2366 C Appellant Respondent Assessee by : Mr. Shashank Mehta Revenue by : Mr. Pravin Salunkhe, Sr. DR Date of Hearing : 23/07/2025 Date of pronouncement : 30/07/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 11.04.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds: 1. Ground1. That the assessment order u/s 143(3) of the Income Tax Act, 1961 (\"the Act\") dated 30.11.2016 passed by the Assessing Officer (\"AO\") and the additions/disallowances made therein are illegal, bad in law and without jurisdiction. Printed from counselvise.com Ground2-The CIT (A) NFAC has erred in law and in facts in confirming the assessment order p total income of Rs.3063670/ Rs.3226437/ Ground3-That the Commissioner of Income Tax (Appeals) have grossly erred on facts and in law in passing the orders without giving a sufficient a assessee to be heard. The orders have been passed in violation of principles of natural justice. Ground4-That, on the facts and circumstances of the case, the CIT(A) has erred in law and on facts in upholding the assessment order u/s 143(3) of the Act and the additions/disallowances made therein. Ground5-That on the facts and circumstances of the case and law The Learned commissioner of Income tax (Appeals) has erred up holding the Addition made by the Ld. Assessing office making addition on account of business loss, under the head of business & profession, which is contrary to rules of reasonableness in approach and betrays a prejudiced mind. amounting to Rs. 5991122/- Ground6-That on the facts and circumstances of The Learned commissioner of Income tax (Appeals) has erred up holding the Addition made by the Ld. Assessing office erred in making addition on account of under section 50C which is contrary to rules of reasonableness in approach and betr mind. amounting to Rs. 299010/ Ground7-All of the above grounds of appeal are without prejudice and are mutually exclusive 2. We have heard rival submissions of the parties and perused the relevant materials on record. has proceeded to dispose of the appeal ex and upheld the disallowance made by the Assessing Officer (AO) to the tune of ₹59,91,122/ that multiple notices Emerging Multitrade Pvt. Ltd ITA No. 3564/MUM/2025 The CIT (A) NFAC has erred in law and in facts in confirming the assessment order passed by the AO assessing the total income of Rs.3063670/- as against returned loss of Rs.3226437/-. That the Commissioner of Income Tax (Appeals) have grossly erred on facts and in law in passing the orders without giving a sufficient and reasonable opportunity to the assessee to be heard. The orders have been passed in violation of principles of natural justice. That, on the facts and circumstances of the case, the CIT(A) has erred in law and on facts in upholding the assessment order u/s 143(3) of the Act and the additions/disallowances made That on the facts and circumstances of the case and law The Learned commissioner of Income tax (Appeals) has erred up holding the Addition made by the Ld. Assessing office making addition on account of business loss, under the head of business & profession, which is contrary to rules of reasonableness in approach and betrays a prejudiced mind. amounting to Rs. That on the facts and circumstances of the case and law The Learned commissioner of Income tax (Appeals) has erred up holding the Addition made by the Ld. Assessing office erred in making addition on account of under section 50C which is contrary to rules of reasonableness in approach and betrays a prejudiced mind. amounting to Rs. 299010/- All of the above grounds of appeal are without prejudice and are mutually exclusive to each other. We have heard rival submissions of the parties and perused the relevant materials on record. It is noted that the learned CIT(A) has proceeded to dispose of the appeal ex-parte qua the assessee and upheld the disallowance made by the Assessing Officer (AO) to 59,91,122/-, representing business loss, on the ground that multiple notices issued during the course of appellate Emerging Multitrade Pvt. Ltd 2 ITA No. 3564/MUM/2025 The CIT (A) NFAC has erred in law and in facts in assed by the AO assessing the as against returned loss of That the Commissioner of Income Tax (Appeals) (\"CIT(A)\") have grossly erred on facts and in law in passing the orders nd reasonable opportunity to the assessee to be heard. The orders have been passed in violation of That, on the facts and circumstances of the case, the CIT(A) has erred in law and on facts in upholding the assessment order u/s 143(3) of the Act and the additions/disallowances made That on the facts and circumstances of the case and law The Learned commissioner of Income tax (Appeals) has erred up holding the Addition made by the Ld. Assessing office erred in making addition on account of business loss, under the head of business & profession, which is contrary to rules of reasonableness in approach and betrays a prejudiced mind. amounting to Rs. the case and law The Learned commissioner of Income tax (Appeals) has erred up holding the Addition made by the Ld. Assessing office erred in making addition on account of under section 50C which is contrary ays a prejudiced All of the above grounds of appeal are without prejudice We have heard rival submissions of the parties and perused It is noted that the learned CIT(A) parte qua the assessee and upheld the disallowance made by the Assessing Officer (AO) to , representing business loss, on the ground issued during the course of appellate Printed from counselvise.com proceedings via e-mail were not complied with. observation of the Ld. CIT(A) is reproduced as under: “5.0 Decision on grounds of appeal and reasons thereof: only ground raised in the present appeal i Rs. 59,91,122/ 5.1 The Ld. AO discussed the impugned addition in Para the assessment order dated 30.11.2016 passed u/s 143(3) of the Act. The relevant portion is reproduced as under: 5. On verificati assessee has debited a sum of Rs. 59,91,122/ Income Loss\" under the head Cost of sales. The assessee vide notice u/s 142(1) 17.10.2016 and subsequently vide order Sheet noting dated 28.10.2016, was sp the details of \"Other income Loss\". The assessee vide its letter dated 24.10.2016 submitted as under: \"Company has incurred Losses of Rs. 59,91,122/ of specified item of textiles goods. 5.2 Except for the above mentio evidentiary details have been filed. No details what so ever, in respect of such trading was filed despite sufficient opportunities been given to the assessee. No sale bill, no purchase bills, no details of payment made or rece such sale or purchase was brought on record. In the absence of evidence, the claim of the such loss is not admissible. 5.3 In order to follow law of natural justice, one more opportunity was granted to the assessee and a show cause was issued to t 28.10.2016 whereby the assessee was granted final opportunity to submit details/evidence in respect of Other income Loss. The AR was also asked to explain as to why such loss be not disallowed and added to the tot the in the absence of the details/evidence. The assessee was granted time upto 04.11.2016, but to no avail, neither anybody attended nor any written submission was filed. In fact no details have been filed as desired in respect of such claim till the date of this order. Emerging Multitrade Pvt. Ltd ITA No. 3564/MUM/2025 mail were not complied with. observation of the Ld. CIT(A) is reproduced as under: “5.0 Decision on grounds of appeal and reasons thereof: only ground raised in the present appeal is against addition of Rs. 59,91,122/- on account of Business loss. 5.1 The Ld. AO discussed the impugned addition in Para the assessment order dated 30.11.2016 passed u/s 143(3) of the Act. The relevant portion is reproduced as under: 5. On verification of the details filed it is noted that the assessee has debited a sum of Rs. 59,91,122/ Income Loss\" under the head Cost of sales. The assessee vide notice u/s 142(1) 17.10.2016 and subsequently vide order Sheet noting dated 28.10.2016, was specifically asked to file the details of \"Other income Loss\". The assessee vide its letter dated 24.10.2016 submitted as under:- \"Company has incurred Losses of Rs. 59,91,122/ of specified item of textiles goods. 5.2 Except for the above mentioned statement, no supporting evidentiary details have been filed. No details what so ever, in respect of such trading was filed despite sufficient opportunities been given to the assessee. No sale bill, no purchase bills, no details of payment made or rece such sale or purchase was brought on record. In the absence of evidence, the claim of the such loss is not admissible. 5.3 In order to follow law of natural justice, one more opportunity was granted to the assessee and a show cause was issued to the assessee vide order sheet looting dated 28.10.2016 whereby the assessee was granted final opportunity to submit details/evidence in respect of Other income Loss. The AR was also asked to explain as to why such loss be not disallowed and added to the tot the in the absence of the details/evidence. The assessee was granted time upto 04.11.2016, but to no avail, neither anybody attended nor any written submission was filed. In fact no details have been filed as desired in respect of such ill the date of this order. Emerging Multitrade Pvt. Ltd 3 ITA No. 3564/MUM/2025 mail were not complied with. The relevant observation of the Ld. CIT(A) is reproduced as under: “5.0 Decision on grounds of appeal and reasons thereof:- The s against addition of 5.1 The Ld. AO discussed the impugned addition in Para-5 of the assessment order dated 30.11.2016 passed u/s 143(3) of the Act. The relevant portion is reproduced as under: on of the details filed it is noted that the assessee has debited a sum of Rs. 59,91,122/- as \"Other Income Loss\" under the head Cost of sales. The assessee vide notice u/s 142(1) 17.10.2016 and subsequently vide order ecifically asked to file the details of \"Other income Loss\". The assessee vide its letter \"Company has incurred Losses of Rs. 59,91,122/- for trading ned statement, no supporting evidentiary details have been filed. No details what so ever, in respect of such trading was filed despite sufficient opportunities been given to the assessee. No sale bill, no purchase bills, no details of payment made or received for such sale or purchase was brought on record. In the absence of evidence, the claim of the such loss is not admissible. 5.3 In order to follow law of natural justice, one more opportunity was granted to the assessee and a show cause he assessee vide order sheet looting dated 28.10.2016 whereby the assessee was granted final opportunity to submit details/evidence in respect of Other income Loss. The AR was also asked to explain as to why such loss be not disallowed and added to the total income of the in the absence of the details/evidence. The assessee was granted time upto 04.11.2016, but to no avail, neither anybody attended nor any written submission was filed. In fact no details have been filed as desired in respect of such Printed from counselvise.com “5.4 Section 143(2) puts the first onus on the assessee to substantiate its claims in its return of income i.e. if any claim is made in the return of income, the thus to substantiate such claim lies with the assessee. This onus discharged at all. Therefore, the claim of such \"Other income Loss\" of Rs. 59,91,122/ to the total income of the assessee. Penalty proceedings u/s 271(1)(c) is initiated separately for furnishing of inaccurat particulars of income. 5.2 I have carefully gone through the grounds of appeal, facts of the case and assessment order passed by the AO. On perusal of records and assessment order, it seems that appellant has miserably failed to submit the details of \"Ot Income Loss\" amounting to Rs. 59,91,122/ of assessment proceedings in spite of giving various opportunities. Assessee vide notice u/s 142(1) 17.10.2016 and subsequently vide order Sheet noting dated 28.10.2016, was specifically asked Loss\". However, appellant have not submitted any supporting evidences or details in respect of such trading loss. No sale bill, no purchase bills, no details of payment made or received for such sale or purchase was br AO has disallowed the claim of the appellant under the head of \"Other income Loss\" and made the impugned addition. 5.3 Primary onus lies with the assessee to substantiate its claim made in his statement of income in respect of b loss or expenses. As discussed above, appellant failed to submit the details of \"Other Income Loss\" either before the AO during course of assessment proceedings or appellate proceedings in spite of getting several opportunities. Therefore, appellant has miserably failed to discharge the onus and substantiate its claim made in his statement of income in respect of business loss. As mentioned above, appellant was non co-operative all along the appellate proceedings as well and no submission or any doc course of appellate proceedings to substantiate its ground of appeal and rebut the finding of the AO. 5.4 Hence, in view of the elaborate discussion/analysis and conclusion of the A.O. in the Assessment order, and in absence of any response received from the appellant, I find no Emerging Multitrade Pvt. Ltd ITA No. 3564/MUM/2025 “5.4 Section 143(2) puts the first onus on the assessee to substantiate its claims in its return of income i.e. if any claim is made in the return of income, the thus to substantiate such claim lies with the assessee. This onus has not been discharged at all. Therefore, the claim of such \"Other income Loss\" of Rs. 59,91,122/- is thus disallowed and added back to the total income of the assessee. Penalty proceedings u/s 271(1)(c) is initiated separately for furnishing of inaccurat particulars of income. 5.2 I have carefully gone through the grounds of appeal, facts of the case and assessment order passed by the AO. On perusal of records and assessment order, it seems that appellant has miserably failed to submit the details of \"Ot Income Loss\" amounting to Rs. 59,91,122/- during the course of assessment proceedings in spite of giving various opportunities. Assessee vide notice u/s 142(1) 17.10.2016 and subsequently vide order Sheet noting dated 28.10.2016, was specifically asked to file the details of \"Other income Loss\". However, appellant have not submitted any supporting evidences or details in respect of such trading loss. No sale bill, no purchase bills, no details of payment made or received for such sale or purchase was brought on record. Therefore, AO has disallowed the claim of the appellant under the head of \"Other income Loss\" and made the impugned addition. 5.3 Primary onus lies with the assessee to substantiate its claim made in his statement of income in respect of b loss or expenses. As discussed above, appellant failed to submit the details of \"Other Income Loss\" either before the AO during course of assessment proceedings or appellate proceedings in spite of getting several opportunities. Therefore, t has miserably failed to discharge the onus and substantiate its claim made in his statement of income in respect of business loss. As mentioned above, appellant was operative all along the appellate proceedings as well and no submission or any documents were filed during the course of appellate proceedings to substantiate its ground of appeal and rebut the finding of the AO. 5.4 Hence, in view of the elaborate discussion/analysis and conclusion of the A.O. in the Assessment order, and in any response received from the appellant, I find no Emerging Multitrade Pvt. Ltd 4 ITA No. 3564/MUM/2025 “5.4 Section 143(2) puts the first onus on the assessee to substantiate its claims in its return of income i.e. if any claim is made in the return of income, the thus to substantiate such has not been discharged at all. Therefore, the claim of such \"Other income is thus disallowed and added back to the total income of the assessee. Penalty proceedings u/s 271(1)(c) is initiated separately for furnishing of inaccurate 5.2 I have carefully gone through the grounds of appeal, facts of the case and assessment order passed by the AO. On perusal of records and assessment order, it seems that appellant has miserably failed to submit the details of \"Other during the course of assessment proceedings in spite of giving various opportunities. Assessee vide notice u/s 142(1) 17.10.2016 and subsequently vide order Sheet noting dated 28.10.2016, to file the details of \"Other income Loss\". However, appellant have not submitted any supporting evidences or details in respect of such trading loss. No sale bill, no purchase bills, no details of payment made or received ought on record. Therefore, AO has disallowed the claim of the appellant under the head of \"Other income Loss\" and made the impugned addition. 5.3 Primary onus lies with the assessee to substantiate its claim made in his statement of income in respect of business loss or expenses. As discussed above, appellant failed to submit the details of \"Other Income Loss\" either before the AO during course of assessment proceedings or appellate proceedings in spite of getting several opportunities. Therefore, t has miserably failed to discharge the onus and substantiate its claim made in his statement of income in respect of business loss. As mentioned above, appellant was operative all along the appellate proceedings as well uments were filed during the course of appellate proceedings to substantiate its ground of 5.4 Hence, in view of the elaborate discussion/analysis and conclusion of the A.O. in the Assessment order, and in any response received from the appellant, I find no Printed from counselvise.com reason to interfere in the finding of the A.O. Thus, the addition of Rs. 59,91,122/ Thus, Ground of appeal on this issue 2.1 However, before us, the submitted that the appeal had been filed in physical form during the financial year 2017 35—meant for providing e assessee had indicated “No”. C the learned CIT(A) via e assessee and, therefore, could not be complied with. 2.2 In view of the explanation furnished by the assessee regarding the non-receipt of notices, and in it appropriate to set aside the order passed by the learned CIT(A) and restore the matter to his file for adjudication afresh, after affording due opportunity to the assessee. The assessee is directed to ensure strict compliance with the modalities of communication prescribed under the Faceless Appeal Scheme, including monitoring of notices issued through the Income Tax Portal. of the appeal of the assessee is accordingly allowed. 2.3 Since we have already restored the appeal to the file of the Ld. CIT(A) for deciding afresh, the other grounds raised on merit are rendered academic and we are not required to be adjudicate upon and same are dismissed as infructuous. Emerging Multitrade Pvt. Ltd ITA No. 3564/MUM/2025 reason to interfere in the finding of the A.O. Thus, the addition of Rs. 59,91,122/- on account of Business loss is upheld. Thus, Ground of appeal on this issue is dismissed.” However, before us, the learned counsel for the assessee submitted that the appeal had been filed in physical form during the financial year 2017–18, and in the relevant column of Form No. meant for providing e-mail details for communication assessee had indicated “No”. Consequently, the notices issued by the learned CIT(A) via e-mail did not come to the knowledge of the assessee and, therefore, could not be complied with. In view of the explanation furnished by the assessee regarding receipt of notices, and in the interest of justice, we consider it appropriate to set aside the order passed by the learned CIT(A) and restore the matter to his file for adjudication afresh, after affording due opportunity to the assessee. The assessee is directed compliance with the modalities of communication prescribed under the Faceless Appeal Scheme, including monitoring of notices issued through the Income Tax Portal. The ground No. 3 of the appeal of the assessee is accordingly allowed. Since we have already restored the appeal to the file of the Ld. CIT(A) for deciding afresh, the other grounds raised on merit are rendered academic and we are not required to be adjudicate upon and same are dismissed as infructuous. Emerging Multitrade Pvt. Ltd 5 ITA No. 3564/MUM/2025 reason to interfere in the finding of the A.O. Thus, the addition on account of Business loss is upheld. dismissed.” learned counsel for the assessee submitted that the appeal had been filed in physical form during 18, and in the relevant column of Form No. mail details for communication—the onsequently, the notices issued by mail did not come to the knowledge of the In view of the explanation furnished by the assessee regarding the interest of justice, we consider it appropriate to set aside the order passed by the learned CIT(A) and restore the matter to his file for adjudication afresh, after affording due opportunity to the assessee. The assessee is directed compliance with the modalities of communication prescribed under the Faceless Appeal Scheme, including monitoring The ground No. 3 Since we have already restored the appeal to the file of the Ld. CIT(A) for deciding afresh, the other grounds raised on merit are rendered academic and we are not required to be adjudicate upon Printed from counselvise.com 3. In the result, the statistical purposes. Order pronounced in the open Court on 30 Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 30/07/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Emerging Multitrade Pvt. Ltd ITA No. 3564/MUM/2025 In the result, the appeal of the assessee is allowed for statistical purposes. nounced in the open Court on 30/07/2025. Sd/- Sd/ (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Emerging Multitrade Pvt. Ltd 6 ITA No. 3564/MUM/2025 appeal of the assessee is allowed for /07/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "