GURMEET SINGH SETHI,NEW DELHI V. ITO WARD - 45(2), NEW DELHI

MA 367/DEL/2024

AI Insights

The case involves Gurmeet Singh Sethi, the applicant, who filed a Miscellaneous Application against the Income Tax Officer, Ward-45(2), New Delhi, concerning an earlier Tribunal order that did not address the merits of his case due to the absence of submissions from his then-counsel. The Tribunal had previously remitted the issue of the taxability of sundry creditors back to the AO but decided other issues ex parte due to the lack of details provided by the assessee. The Tribunal, upon reviewing the MA and the submissions from both parties, decided to recall the earlier order and set a new date for a comprehensive hearing on the merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314230 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Keywords: Set aside; Capital asset converted into stock in trade
• Section: 40(a)(ia)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER M.A. 367/Del/2024 (Arising out of ITA No.334/Del/2020) Assessment Year: 2012-13 Gurmeet Singh Sethi A-37, Rajouri Garden, New Delhi PAN : AAAPS4868G Vs. Income Tax Officer, Ward-45(2), New Delhi PAN: AAACS6589D (Applicant) (Respondent) ORDER PER AVDHESH KUMAR MISHRA, AM: By way of this Miscellaneous Application (hereinafter, the ‘MA’), the applicant assessee has requested for recalling of the Tribunal order dated 15.05.2024 in the case of the assessee in the ITA No. 334/Del/2020 for the Assessment Year 2012-13. 2. The Authorized Representative (hereinafter, the ‘AR’) of the assessee at length and have perused the record. The Ld. AR prayed for recalling the order as the same had not been decided on merit as the then Counsel did not file any submission before the Tribunal. Applicant by Sh. Anil Chopra, CA Respondent by Ms. Harpreet Kaur Hansra, Sr. DR Date of hearing 02.05.2025 Date of pronouncement 07.05.2025 MA No.367/Del/2024 Gurmeet Singh Sethi 2 3. On the other hand, the Sr. Departmental Representative (hereinafter, the ‘Sr. DR’) who simply prayed for dismissal of the MA by submitting that the major issue i.e. the taxability of sundry creditors was remitted back to the AO and other issues were decided ex parte. She vehemently opposed the request of the Ld. AR for recalling of the appeal. 4. We have heard both parties. Vide order dated 15.05.2024 in the assessee’s own case in the ITA No. 334/Del/2020, we have remitted the issue of taxability of sundry creditors of Rs.1,12,75,060/- to the Assessing Officer (hereinafter, the ‘AO’) as under: “10. The first issue is in respect of taxability of sundry creditor of Rs.1,12,75,060/- as a cessation of liability. As per Para 4 of the assessment order, it is evident that G. G. Telecrest Pvt. Ltd. and Uttam Strips Pvt. Ltd. has confirmed the said liabilities as loans/advances and not as creditors. In such facts and circumstances, the liabilities of G. G. Telecrest Pvt. Ltd. and Uttam Strips Pvt. Ltd. have to be disclosed in the balance sheet of the appellant/assessee as loan/advances. It cannot be ruled out that there may not be some error in the grouping of these liabilities under the head ‘creditors’ instead of ‘loans and advances’ as these liabilities are not appearing under the head ‘loans and advances’ in the balance sheet of the appellant/ assessee. In view of the above, we are of the considered opinion that the liabilities of the above mentioned two parties; G. G. Telecrest Pvt. Ltd. and Uttam Strips Pvt. Ltd., aggregating Rs. 95,00,000/- require further investigations/ verifications. Therefore, in the interest of justice and considering all the afore- stated observations, we are of the considered view that, the appellant/assessee deserves reasonable one more opportunity to make good the defects/shortcomings. In view hereof, without offering our comment on merits of the case, we deem it appropriate set aside the issue of taxability of liabilities of G. G. MA No.367/Del/2024 Gurmeet Singh Sethi 3 Telecrest Pvt. Ltd. and Uttam Strips Pvt. Ltd. and remit the matter back to the file of the AO for de-nova consideration. We therefore, hereby remit back the issue of taxability of liabilities of G. G. Telecrest Pvt. Ltd. and Uttam Strips Pvt. Ltd.to the file of the AO for further verification and investigations and deciding this matter afresh as per law.” 4.1 In respect of other two issues, we, vide order dated 15.05.2024 in the assessee’s own case in the ITA No. 334/Del/2020, have held as under: - “11. In respect of creditors other than those mentioned above in para 10, the appellant/assessee did not file any details or confirmation either before the AO or CIT(A). We therefore, have no option except to upheld the addition of Rs.17,75,060/-. 12. As far as the disallowance of Rs.16,52,720/- of commission expenses under section 40(a)(ia) of the Act and taxability of cash deposits aggregating to Rs.16,28,500/- in the bank account of the appellant/assessee are concerned, the appellant/assessee has failed to bring any material on the record to contradict the findings of the Ld. CIT(A) on these two issues. We, therefore, do not find fit to interfere in the findings of the CIT(A) in this regard; i.e. disallowance of Rs.16,52,720/- and taxability of cash deposits aggregating to Rs.16,28,500/-.” 5. We have carefully gone through the contents of the M.A. filed by the assessee, submissions/contentions/arguments of the Ld. AR and the Ld. Sr. DR. We are of the considered view that it is a fit case to recall the appeal for being heard on merit as it had not been decided on the merit in the ITA No. 334/Del/2020. We, therefore, direct the registry to fix this case dated 25/06/2025 after giving due notices to both the parties. MA No.367/Del/2024 Gurmeet Singh Sethi 4 6. In the result, the MA filed by the assessee is allowed. Order pronounced in the open court on 07 May, 2025 Sd/- Sd/- (C. N. PRASAD) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07.05.2025. Binita, Sr.PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(A) 5. Sr. DR, New Delhi Asstt. Registrar ITAT, New Delhi "