M/S.. RAGHUNATH PANDA & SONS(P) LIMITED,BHUBANESWAR V. INCOME TAX OFFICER, WARD-1(2), BHUBANESWAR

ITA 528/CTK/2024

AI Insights

This case involves Raghunath Panda & Sons Private Limited, a private company engaged in construction and selling of residential flats, appealing against the order of the CIT(A), which confirmed the additions made by the Assessing Officer (AO) under section 144 of the Income Tax Act. The AO had made several additions to the assessee's income, including disallowances of unsecured loans and short-term borrowings, and an adhoc disallowance of expenses. The assessee contested these additions, arguing that they were made without proper verification and violated principles of natural justice. The Tribunal found merit in the assessee's request for a detailed examination of the submissions and directed a fresh adjudication by the CIT(A).

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473621 (ITAT-CUTTACK)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.C.MOHANTY
• Assessee Lawyers: PER BENCH; B.PANDA; B.R.PANDA
• Keywords: Depreciation; Principle of natural justice
• Section: 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE MANISH AGARWAL Raghunath Panda & Sons Private Limited N-2/125 Ground Floor., I Village Bhubaneswar 751015 PAN/GIR No. (Appellant Assessee by Per Bench This is an CIT(A), NFAC, Delhi dated 1/14455/2019-20 2. Shri B.Panda, Sr. Adv and B.R.Panda assessee and Shri 3. The assesssee has IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.528 /CTK/2024 Assessment Year :2017-18 Raghunath Panda & Sons Private Limited 2/125 Ground Floor., IRC Bhubaneswar 751015 Vs. Income Tax Officer, Ward 1(2), Bhubaneswar No.AAECR 3427 M (Appellant) .. ( Respondent Assessee by : Shri B.Panda, Sr Adv and Sri B.R.Panda Revenue by : Shri S.C.Mohanty, Sr DR Date of Hearing : 30/12/20 Date of Pronouncement : 30/12/20 O R D E R This is an appeal filed by the assessee against the order of the ld Delhi dated 03/12/2024 in Appeal No. CIT(A 20 for the assessment year 2017-18 B.Panda, Sr. Adv and B.R.Panda, ld AR appeared for assessee and Shri S.C.Mohanty, Sr. DR appeared for the revenue. The assesssee has raised following grounds of appeal: P a g e 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, MEMBER , ACCOUNTANT MEMBER Income Tax Officer, Ward- 1(2), Bhubaneswar Respondent) Sr Adv and Sri B.R.Panda, Adv : Shri S.C.Mohanty, Sr DR 2024 024 appeal filed by the assessee against the order of the ld CIT(A),Bhubaneswar- d AR appeared for the DR appeared for the revenue. raised following grounds of appeal:- ITA No.528 /CTK/2024 Assessment Year :2017-18 P a g e 2 | 4 “I. For that, the orders of the forums below are unjust, excessive and contrary to the facts of the case and inflation of Income at Rs.1,11,65,160/- is liable to be deleted in toto. II. For that, addition of Rs.21,50,000/- by disallowing the unsecured loan shown in the Balance-sheet without proper verification, confrontation and inquiry caused gross violation of principles of natural justice, hence entire addition is liable to be deleted. For that, addition of Rs.55,10,000/- as income of the Appellant by disallowing the short-term borrowings is unjust in the facts of this case and liable to be vacated. IV. For that addition of Rs. 16,35,905/- on assumption and presumption basis without any valid reasons is excessive and absurd, hence disallowance of expenses @15% in whimsical manner should be quashed in the facts of this case. V. For that, without proper verification of the accounts Id. AO added Rs.1,19,916/- in mechanical manner for alleged difference in w.d.v of closing balance of preceding year and opening balance of disputed A/Y.1017-18, hence the addition is liable to be deleted in the facts of this case.” 4. It was submitted by ld AR that the assessee is a private company engaged in construction and selling of the residential flats. It filed the return of income on 27.12.2017 declaring total income at Rs.17,58,340/- which was processed u/s.143(1) of the Act accepting the income disclosed by the assessee. Thereafter, the return was selected for scrutiny assessment and the AO assessed the income at Rs.1.11.65.160/- passing the assessment u/s.144 of the Act without giving proper opportunity to the assessee. It was the submission that the enhancement was made due to the addition of Rs.21,50,000/- by disallowing the unsecured loan shown by the assessee in the balance sheet, and further addition of Rs.55,10,000/- was made by disallowing the short term borrowings and thereafter ITA No.528 /CTK/2024 Assessment Year :2017-18 P a g e 3 | 4 disallowed the expenses @ 15% at Rs.16,35,905/- on Rs.1,09,06,035/- on adhoc basis as well as disallowed depreciation at Rs.1,10,916/-. It was the submission that during the first appellate proceedings, the assessee had filed the details such as name, PAN and address of the security deposited by the persons, sundry creditors and short term borrowing and unsecured loan taken from the persons/establishment, hence, the initial burden on the assessee has been discharged. But the ld CIT(A) without proper application of mind, confirmed the addition made by the AO without calling a remand report from the Assessing Officer. He prayed that the matter may be restored back to the file of the ld CIT(A) to call a remand report from the Assessing Officer and redecide the issue afresh. 5. In reply, ld Sr DR submitted that on the basis of written submissions filed by the assessee, the ld CIT(A) has decided the appeal, therefore, no fruitful purpose will be served to again remit the matter back. 6. We have considered the rival submissions. It is an undisputed fact that the assessment order has been passed u/s.144 of the Act, as there was no compliance in reply to various notices issued by the AO. Before the ld CIT(A) the assessee has also filed various written submissions, which were also considered in the impugned order. The ld CIT(A) has mentioned that the assessee has filed the list containing balance sheet giving list of security deposit and unsecured loans, short term borrowings, list of sundry creditors, other current liability and advanced from customers but no specific ITA No.528 /CTK/2024 Assessment Year :2017-18 P a g e 4 | 4 submissions on the ground has been filed. Before us, ld AR submitted that if one more opportunity is granted, the assessee will furnish the specific submissions as required by the ld CIT(A). Therefore, in the interest of justice, the issues in this appeal are restored to the file of the ld CIT(A) for fresh adjujdication. The assessee is also directed to file all such details as required for adjujdication of the issue afresh by the ld CIT(A). 7.. In the result, appeal of the assessee stands partly allowed for statistical purposes. Order dictated and pronounced in the open court on 30/12/2024. SD/- SD/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 30/12/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.Secretary ITAT, CUTTACK 1. The Appellant : Raghunath Panda & Sons Private Limited N-2/125 Ground Floor., IRC Village Bhubaneswar 751015 2. The Respondent: Income Tax Officer, Ward- 1(2), Bhubaneswar 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT, 5. DR, ITAT, 6. Guard file. //True Copy// "