M/S VINAYAK TEXTRADE PRIVATE LIMITED, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 6(1), MUMBAI

ITA 2147/MUM/2023

AI Insights

The case involves M/s. Vinayak Textrade Pvt. Ltd., which appealed against the order of the Learned Commissioner of Income Tax (Appeals)-54, Mumbai, concerning the assessment year 2016-17. The primary issues in the appeal included the ex-parte nature of the CIT(A)'s order, the rejection of books of accounts under section 145(3) of the Income Tax Act, and the addition of income estimated as a 2% commission on total sales and purchases. The appeal was initially dismissed by the CIT(A) for lack of prosecution as the appellant failed to comply with the notices during the appellate proceedings. The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) did not decide the issues on merits and restored the case for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299215 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: F
• Next Hearing Date: 17-09-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 08-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1); 250; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE KULDIP SINGH, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.2147/Mum/2023 (A.Y. 2016-17) M/s. Vinayak Textrade Pvt. Ltd. 601, Annapurna Heights, Ramchandra Lane, Malad(W) Mumbai-400064 Vs. DCIT, CC 6(1) 1905, 19 th Floor, Air India Building, Nariman Point, Mumbai-400021 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAFCV1470R Appellant .. Respondent Appellant by : None Respondent by : Shri. Ankush Kapoor Date of Hearing 18.09.2023 Date of Pronouncement 26.09.2023 आदेश / O R D E R PER AMARJIT SINGH :- 1. The present appeal filed by the assessee is directed against the order passed u/s 250 of the Income Tax Act, 1961 ([hereinafter “the Act”] by the Learned Commissioner of Income Tax (Appeals)- 54 [hereinafter „the CIT(A)‟] dated 11.04.2023 for A.Y. 2016-17. 2. The grounds of appeal of the assessee is as under; 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in passing ex-parte order P a g e | 2 ITA No. 2147/Mum 2023 AY 2016-17 M/s Vinayak Textrade Pvt. Ltd. without granting sufficient opportunity of being heard to the appellant. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in rejecting books of accounts u/s. 145(3) of the Income Tax 1961, without considering the facts and circumstances of the case. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in rejecting books of accounts u/s.145(3) of the Income Tax Act, 1961, without issuing the show cause notice, is in violation of the provision of law, hence, order passed u/s. 153C r.w.s.143(3) ofthe Act is bad in law and void. 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the actions of Learned Assessing officer in making an addition of Rs. 10,57,52,030/- by estimating alleged 2% commission earned on total sales as well as purchases amounting Rs.528,76,01,522/-, without considering the facts and circumstances of the case. 3. Fact in brief is that return of income declaring total income of ₹4,32,900/- was filed on 15.11.2016. The return was processed u/s 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 153C of the Act on the basis of search action carried out in the case of SVP group on 22.08.2017 wherein it was found that the assessee had sold P a g e | 3 ITA No. 2147/Mum 2023 AY 2016-17 M/s Vinayak Textrade Pvt. Ltd. capital goods to the SVE group without any physical delivery of goods and actual sale between assessee and that party was not established, the AO held that the assessee had failed to establish the genuineness of the sales/purchases made during the year, hence, the AO made addition of ₹10,57,52,030/- by estimating the net profit @ 2% of total sale as well purchase made amounting to ₹ 528,76,01,552/-. 4. The assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) has dismissed the appeal of the assessee for lack of prosecution holding that the assessee has not made any compliance to the notices issued during the course of appellate proceedings. 5. Heard the Ld. DR and perused of the materials on record. The Ld. CIT(A) has not decided the issue challenged in the appeal on merits after referring materials available on record. We consider that while disposing of the appeal by the first appellate authority as contemplate u/s 250(6) of the Act, the Ld. CIT(A) is required to state the points arising and the reasons for the decision and decide the appeal on merit after considering the materials available on record. Therefore, in the interest of justice to decide the issue in appeal on merits, we restore this case to file of the Ld. CIT(A) for deciding denovo after affording opportunity to the P a g e | 4 ITA No. 2147/Mum 2023 AY 2016-17 M/s Vinayak Textrade Pvt. Ltd. assessee as directed above. The assessee is directed to make the compliance before the Ld. CIT(A) without any failure. Therefore, the appeal filed by the assessee is allowed for statistical purpose. 6. In the result the appeal filed by the assessee is allowed for statistical purpose. Order Pronounced in Open Court on 26.09.2023 Sd/- Sd/- (KULDIP SINGH) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Mumbai Date 26.09.2023 ANIKET SINGH RAJPUT/STENO आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतधकरण/ ITAT, Bench, Mumbai.