FREEDOM CHARTER SERVICES PRIVATE LIMITED,MUMBAI V. DCIT, CIRCLE 6(1)(2), MUMBAI

ITA 3694/MUM/2025

AI Insights

The case involves Freedom Charter Services Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2017-18. The primary contention was the addition of Rs. 12,07,23,000 as unexplained cash credit under section 68 of the Income Tax Act, 1961, due to insufficient documentation supporting the genuineness and creditworthiness of the loan transaction from Highstreet Cruises and Entertainment Pvt. Ltd. Additionally, 20% of claimed business expenses were disallowed. The Tribunal found that the assessee was not given adequate opportunity to present its case and remanded the matter for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848099 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2017-2018
• Appeal Filed On: 26-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: S.K. GUPTA
• Keywords: Additional evidence
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “F” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 3694/Mum/2025 Assessment Year : 2017-18 Freedom Charter Services Private Limited, 2nd Floor, Bayside Mall, Tardeo Road, Haji Ali, Mumbai-400034. PAN: AABCF2495C vs. DCIT, Circle-6(1)(2), Aayakar Bhavan, Mumbai-400020. (Appellant) (Respondent) For Assessee : Shri S.K. Gupta (Virtually present) For Revenue : Shri Vivek Perampurna, CIT-DR Date of Hearing : 24-03-2026 Date of Pronouncement : 27-03-2026 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 26-03-2025, pertaining to Assessment Year (AY) 2017-18. Printed from counselvise.com 2 ITA No. 3694/Mum/2025 2. Briefly, the facts of the case are that the assessment in this case was completed u/s. 143(3) of the Income Tax Act, 1961 („the Act‟), vide order dt. 16-12-2019, wherein the AO has determined the assessed income at Rs. 12,07,23,000/- as against the reported loss of Rs. 8,00,52,766/-. In the assessment order, the AO has referred to the unsecured loan transaction of Rs. 12,07,23,000/- received by the assessee from Highstreet Cruises and Entertainment Pvt. Ltd. and has stated that in spite of notices and show cause issued to the assessee, the assessee has not come forward and submitted the requisite documentation in support of the genuineness of the transaction and creditworthiness of the entity and, therefore, the amount of Rs. 12,07,23,000/- was brought to tax as un-explained cash credit u/s. 68 of the Act. Further, the AO has disallowed 20% of the expenses claimed by the assessee amounting to Rs. 3,18,54,400/-. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has since dismissed the appeal of the assessee by confirming the findings of the AO and against the said order, the assessee is in appeal before us. 3. During the course of hearing, the Ld.AR submitted that admittedly, the assessee submitted only part information during the course of assessment proceedings due to change in the management of the company and the same was also explained to the AO. However, the AO has proceeded and made the addition u/s. 68 of the Act by treating the whole of the unsecured loan transaction as un-explained cash credit u/s. 68 of the Act and secondly, 20% of expenses incurred by the assessee for the purpose of business activities have been disallowed. It was submitted before the Ld.CIT(A), the assessee has submitted confirmation letter from the lender and the bank statement of the assessee-company in support of loan transaction and further sample vouchers and bills were submitted in support of the expenses claimed by the assessee. However, without Printed from counselvise.com 3 ITA No. 3694/Mum/2025 admitting the additional evidences, the Ld.CIT(A) has summarily dismissed the appeal of the assessee, stating that the assessee has not discharged the burden in terms of section 68 of the Act and also the full details have not been filed in support of the claim of the expenses. It was submitted that had an opportunity been given by the Ld.CIT(A), the assessee would have filed further documentation in support of various expenses as well as loan transaction and in light of that, it was submitted that assessee be allowed one more opportunity to file necessary information and documentation and the matter may be remanded to the file of the Ld.CIT(A). 4. The Ld.DR is heard, who has relied on the order passed by the lower authorities. 5. We have heard the rival contentions and perused the material available on record. Admittedly, the assessee has not furnished the requisite documentation during the course of assessment proceedings. However, during the course of appellate proceedings, the assessee did file certain additional evidences. However, we do not find any finding of the Ld.CIT(A) in terms of either admitting or dismissing the additional evidences or calling for the remand report from the AO. Further, on perusal of the order, we also do not find that any notice/show cause was issued to the assessee, calling for the information and documentation and providing an opportunity to the assessee. Therefore, taking into consideration the entirety of facts and circumstances of the case and the limited prayer so raised by the Ld.AR on behalf of the assessee, the matter is remanded to the file of the Ld.CIT(A) to decide the same afresh, as per law after providing reasonable opportunity to the assessee. The assessee is Printed from counselvise.com 4 ITA No. 3694/Mum/2025 at liberty to file necessary explanation / additional documentation in support of its claim. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 27-03-2026 Sd/- Sd/- [RAHUL CHAUDHARY] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 27-03-2026 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "