JP RICE & FOODS PVT LTD,NEW DELHI V. ITO WARD -13(1), NEW DELHI

ITA 1722/DEL/2020

AI Insights

The case involves JP Rice & Foods Pvt. Ltd., the Appellant, contesting the order of the Commissioner of Income Tax (Appeals)-5, New Delhi, which confirmed various additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961, for the Assessment Year 2016-17. The additions included amounts treated as income from share capital and unexplained creditors. The Appellant argued that these amounts were withdrawn from proprietary firms which had sufficient capital and were duly reflected in their balance sheets. The CIT(A)'s decision was challenged on grounds of violation of natural justice, as the Assessee claimed they were not given a proper opportunity to present their case or produce additional documents. The Tribunal, acknowledging the procedural oversight, restored the matter to the CIT(A) for a comprehensive re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 101827 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: MANU GAWRI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 68; 22

Judgement Text

" 1 ITA No. 1722/Del/2020 JP Rice & foods Pvt. Ltd. Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘C’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1722/DEL/2020 (A.Y. 2016-17) JP Rice & foods Pvt. Ltd. 2717, FF, GaliPattey, Naya Bazar, New Delhi PAN: AACCJI550D Vs. ITO Ward-13(1) New Delhi Appellant Respondent Assessee by Sh. Manu Gawri, CA Revenue by Sh. Om Prakash, Sr. DR Date of Hearing 09/04/2025 Date of Pronouncement 17/04/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-5, New Delhi [‘Ld. CIT(A) ’ for short] dated 31/10/2019 pertaining to Assessment Year 2016-17. 2. The grounds of appeal are as under:- “1. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming the addition of Rs 12 lakh made by the AO as received on account of share capital from Jinender Kumar Jain treating the same as income u/s 68 even when Jinender Kumar Jain was assessed to tax as Proprietor of Mangalm Trading Company and has withdrawn this amount from his Proprietary firm which was having sufficient capital. 2 ITA No. 1722/Del/2020 JP Rice & foods Pvt. Ltd. Vs. ITO 2. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming the addition of Rs 4 lakh as received on account of share capital from SmtPoonam Jain as income u/s 68 even when Poonam Jain has withdrawn this amount of Rs 4 lakh from the Proprietary concern of her husband which was assessed to tax and which has also declared the same in its balance sheet. 3. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming the addition of Rs 24 lakh as received on account of share capital from Shri Manish Jain even when such amount has been withdrawn by Manish Jain form his Proprietary firm M/s Arihant Overseas and such amount was duly reflected also in the balance sheet of Manish Jain. 4. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming the addition of Rs 22 lakh as received on account of share capital from Smt. Prabha Jain even when such amount has been withdrawn by Smt. Prabha Jain form her Proprietary firm M/s Shiva Textile. 5. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming the addition of Rs 1,64,91,496/- being 50% of the creditors amounting to Rs 3,29,82,993/- even when confirmations were filed. 6. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming an addition of Rs 1,64,91,496/- on the ground that the confirmations of creditors filed doesn't bear PAN and Stamp of the party who has signed the confirmation. 7. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming an addition of Rs 1,64,91,496/- completely wholly solely on the basis of estimate and ideas without any basis. 8. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming an addition of Rs 1,64,91,496/- without finding any incorrectness or in genuineness in the confirmations filed. 9. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in confirming an addition of Rs 3 ITA No. 1722/Del/2020 JP Rice & foods Pvt. Ltd. Vs. ITO 1,64,91,496/- even by ignoring the legal proceedings against same creditors and also ignoring the reply directly received from the creditors. 10. On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in dismissing the appeal of the assessee.” 3. There is a delay of 281 days in filing the present Appeal. The Assessee filed an application for condoning the delay contending that due to Covid-19 Situations, the present appeal could not be filed on time. For the reason stated in the application for condonation of delay, the delay of 281 days is hereby condoned. 4. Brief facts of the case are that, the Assessee filed return of incomefor Assessment Year 2016-17 declaring income at Rs. 21,60,280/-. An assessment order came to be passed on 19/12/2018 by making additions of Rs. 62,00,000/- u/s 68 of the Income Tax Act, 1961 (‘Act for short) and Rs. 1,64,91,496/- being made as the genuineness of the creditors were not proved. Aggrieved by the assessment order, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 31/10/2019, confirmed the additions made in the assessment order. Aggrieved by the order of the Ld. CIT(A) dated 31/10/2019, the Assessee preferred the present Appeal on the grounds mentioned above. 4 ITA No. 1722/Del/2020 JP Rice & foods Pvt. Ltd. Vs. ITO 5. The Ld. Counsel for the Assessee submitted that the order impugned has been passed without granting the opportunity to present the case and the adjournmentwhich wassoughtby the Ld. Assessee's Representative was denied by the Ld. CIT(A) and the order impugned has been passed ex-parte in violation of principals of natural justice. The Ld. Counsel also submitted before us that the Assessee wanted to produce additional documents which will go into the root of the matter and such opportunity was devoid by the Ld. CIT(A). Thus, sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative relying on the orders of the Lower Authorities, sought for dismissal of the Appeal. 7. We have heard both the parties and perused the material available on record. It is the case of the Assessee that the proper opportunity has not been provided to the Assessee during the appellate proceedings to put forth its case. It is seen from the order impugned, the Ld. CIT(A) has passed the order without granting the adjournment as requested by the Ld. Assessee's Representative. Considering the fact that all the ground of Appeal of the Assessee have not been decided in detail by the Ld. CIT(A) and with an intention to render substantial justice, we deem it 5 ITA No. 1722/Del/2020 JP Rice & foods Pvt. Ltd. Vs. ITO fit to restore the matter to the file of Ld. CIT(A) with a liberty to the Assessee to produce all documents in support of grounds of Appeal and the Ld. CIT(A) is directed to consider the documents produced by the Assessee and decide the Appeal in accordance with law after providing opportunity of being heard to the Assessee. Ordered accordingly. 8. In the result, the appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in the open court on 17th April, 2025 Sd/- Sd/- (NAVEEN CHANDRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 17 .04.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 6 ITA No. 1722/Del/2020 JP Rice & foods Pvt. Ltd. Vs. ITO "