M/S JAY CONSTRUCTION,SURAT V. DCIT, CIRCLE-2(3), SURAT

ITA 654/SRT/2024

AI Insights

The case involves M/s Jay Construction appealing against the orders of the National Faceless Appeal Centre, Delhi/Commissioner of Income-tax (Appeals), which were based on an assessment order passed under section 144 of the Income Tax Act, 1961. The assessment included various additions such as unsecured loans, disallowance of expenses, and additional profit estimation. The assessee argued that there was an overlapping of additions and that the ex parte orders did not discuss the merits of the case. The Tribunal found that there was indeed an overlapping of additions and that the assessee had made some compliance in response to show cause notices, which was not adequately considered by the lower authorities. The Tribunal emphasized the need for a fair reassessment and directed the Assessing Officer to allow the assessee to present complete details.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29817 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: SAPNESH R SHETH
• Keywords: Set aside; Unexplained cash credit; Assessment record
• Section: 144; 68; 43B; 40(a)(ia)

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 654/SRT/2024 (AY 2017-18) (Virtual hearing) M/s Jay Construction AT-Post Rameshwar Street, Hazira Road, Damka, Surat-395 009 [PAN : AAHFJ 3850 C] बनाम Vs Deputy Corporation of Income-tax Circle-2(3), Surat, Room No.612, 6th Floor, Aaykar Bhawan, Majura Gate, Surat-395 001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Sapnesh R Sheth, CA राजˢ की ओर से /Revenue by Shri Ravi Kant Gupta– CIT-DR अपील पंजीकरण/Appeal instituted on 05.06.2024 सुनवाई की तारीख/Date of hearing 30.12.2024 उद ्घोषणा की तारीख/Date of pronouncement 30.12.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as “NFAC/Ld.CIT(A)] dated 19.04.2024 for assessment year (AY) 2017-18, which in turn arises out of assessment order passed by Assessing Officer under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) 18.12.2019. 2. Rival submission of both the parties heard and record perused. The Ld. Authorized Representative (Ld.AR) for the assessee submits that Assessing Officer as well as ld. CIT(A) passed ex parte order. Before Assessing Officer, assessee made compliance in response to two show cause notices, such fact ITA No.654/SRT/2024 (A.Y.17-18) M/s Jay Construction 2 is duly recorded in para-3 of assessment order. The Assessing Officer despite taking all such submission on record passed assessment order under section 144 of the Act in making various additions on account of unsecured loan, disallowance of expenses, addition of sundry creditors as well as addition on account of additional profit on estimation basis. There is overlapping various additions. The Ld. CIT(A) confirmed all the additions in ex parte order without discussing merit of the case. The ld CIT(A) issued notices through e-mail address provided on Form-35. Such e-mail belongs to consultant of assessee- firm who neither made compliance nor intimated assessee about such earing due to financial dispute with him. The assessee-firm has differences with their consultant on certain financial issues, thus, he may not have informed the assessee about the notices received by him. The Ld. AR of assessee submits that the assessee has good case on merit and there is overlapping of addition, which is not at all justifiable. The assessee may be allowed one more opportunity to contest the case on merit. The Ld. AR of the assessee on behalf of assessee undertakes that assesse to be more vigilant in future in making timely compliance. 3. On the other hand, Ld. Commissioner of Income-tax Departmental Representative (Ld. CIT-DR) for the Revenue submits that Assessing Officer as well as Ld.CIT(A) has given sufficient opportunities to the assessee. The assessee has not made compliance and now raising self-serving defence for seeking one more opportunity before Assessing Officer. The Ld.CIT-DR submits that though the assessee does not deserve any further opportunity even if this Bench is of the view that assessee deserves any more opportunity, ITA No.654/SRT/2024 (A.Y.17-18) M/s Jay Construction 3 matter may be restored back only to subject to payment of heavy cost. It is the assessee who has not made compliance. 4. We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. Perusal of assessment record shows that assessee has made certain compliance in response to show cause notice dated 25.11.2019 and 14.12.2019. In response to show cause notice 25.11.2019, the assessee furnished detailed of salary expenses, salary register, ESI Challan and ledger account. The assessee also furnished other details and in response to show cause notice dated 14.12.2019. We find that Assessing Officer passed assessment order under section 144 of the Act by making additions on account of unexplained cash credit of Rs.10.00 lakh, unverifiable expense of Rs.1.37 crores, ad hoc disallowance of expenses @ 30%, addition under section 40(a)(ia) of Rs.46,98,316/, unexplained cash credit under section 68 of Rs.94,64,921/-, disallowance under section 43B of Rs.60,54,460/-, addition on account of estimation of profit @ 10% of Rs.1.23 crores. The Assessing Officer taxed certain addition under section 115BBE of the Act. On careful perusal of various additions and disallowances, we find that they are certain overlapping of the additions which require proper verification on furnishing complete details by assessee. Therefore, in the interest of justice, we set aside the orders of Assessing Officer and Ld. CIT(A) and restore the matter back to the file of Assessing Officer. Considering the facts that the assessee has not made compliance of various notices, thus, the assessee is burdened with of Rs. 15,000/- (Rupees fifteen thousand only). Cost shall be deposited with the account of Income Tax Appellate Tribunal Bar Association ITA No.654/SRT/2024 (A.Y.17-18) M/s Jay Construction 4 Surat Bench, Surat within 15 days from the date of receipt of this order. Original or receipt shall be kept in record of this case and copy thereof be filed before Assessing Officer. Needless to direct that before passing the order Assessing Officer shall allow fair and reasonable opportunity to assessee. The assessee is also directed to be more vigilant in future in making compliance in time and not to seek further adjournment without any valid reason and furnish all relevant and necessary evidences, if so desire. With these directions the appeal of assessee is allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30/12/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 30/12/2024 Dkp Outsourcing Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "