MAHAVIR ASSOCIATES,MUMBAI V. ACIT, CIRCLE-24(1), MUMBAI, MUMBAI

CO 83/MUM/2025

AI Insights

The case involves the Assistant Commissioner of Income Tax (Appellant) versus Mahavir Associates (Respondent) concerning discrepancies in income declarations during a survey and subsequent assessments for the Assessment Year 2015-16. The primary issues revolved around the understatement of stock, cessation of trading liabilities, and unaccounted sales of scrap. The AO had made significant additions to the assessee's income based on these discrepancies, which were contested in the CIT(A) and subsequently in the Tribunal. The Tribunal found that the CIT(A) had not adequately considered the AO's findings and the evidentiary value of the statements made during the survey, leading to a remand for a thorough reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778127 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 15-04-2025
• Other Referred Cases: Ratanlal Omprakash Vs. Commissioner of Income Tax, Orissa 132 ITR 640, M/s. Kanchwala Gems
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAN KOSURI
• Assessee Lawyers: NARENDRA PATEL; WAY OF LETTER DATED ... HOWEVER
• Keywords: Set aside; Revised return; Corroborative evidences; Rejection of books of accounts; Retraction; Principle of natural justice
• Section: 144; 133A

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL“D” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.1134/MUM/2025 (A.Y. 2015-16) Assistant Commissioner of Income Tax, Circle – 24(1), 601, 6th Floor, Piramal Chambers, Mumbai – 400012, Maharashtra v/s. बनाम Mahavir Associates Gala No. 1, Apollo Chamber, Mogra Pada Road, Andheri East, Mumbai – 400 069, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAKFM0307L Appellant/अपीलाथी .. Respondent/प्रतिवादी प्रत्याक्षेपसं/C.O. No.83/MUM/2025 (Arising out of ITA No. 1134/MUM/2025) (A.Y. 2015-16) Mahavir Associates Gala No. 1, Apollo Chamber, Mogra Pada Road, Andheri East, Mumbai – 400 069, Maharashtra v/s. बनाम Assistant Commissioner of Income Tax, Circle – 24(1), 601, 6th Floor, Piramal Chambers, Mumbai – 400 012, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAKFM0307L Appellant/अपीलार्थी .. Respondent/प्रतिवादी Assessee by : Shri Narendra Patel, AR Revenue by: Shri Annavaran Kosuri (Sr. AR) Date of Hearing 21.08.2025 Date of Pronouncement 07.10.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The instant appeals preferred by the Revenue and Cross Objection of the assessee emanate from the appellate order passed by the Learned Printed from counselvise.com P a g e | 2 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai Commissioner of Income-tax, Appeal, CIT(A) - 51, Mumbai [hereinafter referred to as “CIT(A)”] pertaining to assessment order made u/s. 144 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2015-16.We take up Revenue’s appeal in ITA No. 1134/MUM/2025 first, as below: 2. The grounds of appeal are as under:- 1. “Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,50,48,000/- on account of understated stock, when assessee has accepted the same during survey proceedings u/s 133A of the Income Tax Act, 1961?” 2. “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 71,65,641/- u/s 41(1) of the Income Tax Act, 1961 on account of cessation of trading liability, when the assessee could not prove that he had made actual payment to the creditors but simply retracted his acceptance made during the survey proceedings u/s 133A of the Income Tax Act, 1961?” 3. “Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in the deleting the addition of Rs. 60,00,000 on account of sale of scrap ignoring that the manager had accepted during the survey proceedings about the quantum, and volume of scrap generation? 3. The facts of the instant case are that a survey was conducted at the premises of the assessee on 12.09.2014 in which one Shri Sampat Kothari, younger brother of the partner of the Firm and employed as a Manager, disclosed an additional income of Rs.3.01 cr. on account of certain discrepancies observed by the survey team. The break-up of this disclosure was Rs. 2,24,50,000/- on account of Understated stock and Rs.76,49,301/- on account of Cessation of liabilities. This disclosure was subsequently Printed from counselvise.com P a g e | 3 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai confirmed by the assessee by way of letter dated 22.09.2014. However, when the return of income was filed, it offered only Rs.74,02,000/- on account of stock in the original return filed on 29.09.2015 and further Rs.4,83,750/- on account of cessation of certain liability vide revised return filed on 15.04.2016. The entire assessment is based on the difference in the income as disclosed during the course of Survey and as actually offered by the assessee. The AO rejected the books of accounts for different reasons and made the assessment u/s 144 making an addition of Rs.1,50,48,000/- on account of Understated stock, Rs.71,65,641/- on account of Cessation of some further liabilities and Rs.60,00,000/- on account of Scrap sale not accounted for by it. 3.1 The AO observed that from the documents and information given, the assessee had not given any valid and satisfactory explanation for the deviation from the disclosure made during the survey proceedings. The details of stock were not given in the format required by the notice dated 21.11.2017. Instead, the assessee had given details of inward and outward sales and purchases in cubic feet and sq. mt and had not quantified the way it was quantified by the survey party at the time of the survey proceedings. Vide a questionnaire, the assessee was specifically asked to furnish the stock as available on the date of survey Printed from counselvise.com P a g e | 4 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai and from there how much purchases had been made and how much the sales had been affected and from it and how the actual profit had been derived. However, the assessee failed to provide the same. In fact, in the statement the partner himself had stated on oath that no stock register was maintained. When the survey team quantified the stock and confronted the same before the partner, he admitted undeclared stock was there with them. The details of opening and closing stock were asked in the same proforma in which the survey team had scientifically taken the stock on the date of survey which was however, not provided. It is observed that unless the assessee furnish the stock in the proforma in which the survey team had taken the stock, it was not possible to work out the actual gross profit of the business by considering the stock available with the assessee as on date of survey. The requirement of stock was more relevant when the partner of the firm stated that no stock register was maintained and was also not produced for verification before the survey team. By not providing the details in the prescribed format, the assessee precluded the department from reaching to the correct stock statement. It is also mentioned that without the maintenance of stock register how the value of closing stock had been taken in the final accounts, was beyond the understanding of a prudent Printed from counselvise.com P a g e | 5 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai businessman. It was also noted that documents furnished at the time of assessment proceedings by letter dated 16.12.2017 regarding the import of woods showed that along with the import bill list was attached wherein details of every item of the woods are mentioned giving Length, Girth, Cubical Content and weight. The woods in the market are also sold in cubic feet and dimension of the wood is also taken into account. It is surprising to note that when the assessee was importing the woods through the import bills which carried all the vital parameters relating to the dimension of the wood, then what prohibited the assessee to maintain the stock in the same format and why the same had not been furnished. This showed that the assessee intentionally avoided to produce the stock register which was fundamental document to arrive at the correct profit in a scientific manner. The requirement of this stock was more relevant when the survey team had worked out and prepared the stock in the same format in which it was now asked to be furnished. 3.2 He also observed that similar deviation was also found in the working of liabilities and list of unsecured loans given by the assessee. Certain parties who figured in the list of liabilities, which no longer existed, were still found place in the audited balance sheet of the assessee for the year under consideration. As per the statement of the AR, the Printed from counselvise.com P a g e | 6 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai unsecured loans as on 12.09.2014 was Rs. 14.01 cr. whereas in the audited balance sheet as on 31.03.2015, the unsecured loans was shown at Rs. 9.44 cr. The assessee had not furnished any explanation whether the difference of Rs. 4.6 cr. had been paid off during the interim period and if so, the source of repayment of loans was not explained by the assessee. 3.3 It was further noted by the AO that during the course of survey proceedings, it came to the notice of the survey team that huge scrap was generated everyday from the saw mills. The books of accounts and documents analyzed by the team did not reflect any receipts from sale of scrap. When this aspect of scrap sale was put before the manager of the saw mill at Bhiwandi, Mr. Sampat F. Kothari, he stated that almost scrap to the tune ofRs.15,000/- to Rs.20,000/- was generated everyday from the Bhiwandi Saw Mill. This receipt had never been accounted for by the assessee while finalizing the profit of the business. This also indicated that profit declared in the return of income was not fully and truly disclosed. According to the AO, the books prepared therefore did not reflects true and correct profit of the business. During the course of assessment proceedings, the assessee was specifically asked to Printed from counselvise.com P a g e | 7 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai explain by issuing notice under section 142[1] of the Act. However, the assessee never replied to this query. This again showed that the receipts from sale of scrap were not declared in the return of income. 3.4 He also observed perusal of the Form 3CD and the audited Profit and loss account for the F.Y-2014- 15, revealed that the gross profit declared by the auditor in Form 3CD was Rs.3,37,27,394/- against a sales turnover of Rs. 25,49,35,871/-, whereas the gross profit declared in the audited profit and loss account was Rs. 4,11,29,394/- against the same sales turnover. This deviation had not been explained by the assessee. 3.5 The AO finally concluded based on the above observations that the assessee was not maintaining any proper books of accounts and documents from which true and correct profit would be arrived. Hence, it was not able to quantify its stock in hand, was not aware of its liabilities and had reported profit which was not giving true and clear picture of the business. The assessee firm had not responded to the notices issued by this office in the manner and way it was required to be furnished. The information submitted by the assessee was vague, not in the format requested by the statutory notices and did not tally with its own Printed from counselvise.com P a g e | 8 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai audited statements and figures. The assessee had filed revised return of income to accommodate certain discrepancy however, large volume of discrepancy still existed. The assessee had also deviated and retracted from the income offered at the time of survey proceedings on account of difference in stock and unsecured loans which no longer existed and no longer to be paid. In view of the same, the book result declared by the assessee did not depict the correct financial conditions of the assessee. Therefore, book results declared by the assessee were rejected by the AO invoking section 145(3) of the Act. Reliance in this regard was placed on the judgment of Orissa High Court in the case of Ratanlal Omprakash Vs. Commissioner of Income Tax, Orissa 132 ITR 640 and on the decision of the hon’ble apex court judgement in the case of M/s. Kanchwala Gems wherein the Hon’ble Supreme Court has held that where certain purchases remained unverifiable, the rejection of books of accounts is a correct step. 4. In the subsequent appeal before the ld.CIT(A),the assessee made various submissions which have been discussed in the appellate order. At the outset, the appellate authority concluded that the AO was not justified in rejecting the book results on the observations that the requirement of the AO to maintain the stock register, dimension wise was not practical Printed from counselvise.com P a g e | 9 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai since the item to be valued is timber which were is kept log wise and which was the general practise. The method of valuation of stock that had been followed consistently cannot be disturbed and in the instant case also the AO cannot prescribe the format of the stock register. Further, the appellant had a turnover in excess of Rs.25 cr. and the sale is also on account of imports, further the accounts were duly audited and income tax return filed year after year. The appellant’s business is spread over different premises located in Ambadi, Andheri, Nagpur and Byculla and it would not be feasible to carry out the business of the appellant without maintaining details of stock. The statement of the Manager that stock register is not maintained is therefore difficult to accept. Thus, he was not in agreement with the view of the AO that the appellant was not maintaining any stock register. 4.1 Further, he observed that the books of accounts were duly audited and hence without identification of specific instance of error, general statement that the position of liability is not truly reflected was not correct. In respect of scrap, he accepted the contentions of the assessee that the estimation of scrap done by the AO was an error and the scrap generated was miniscule which was either given to the workers or used for petty expenses. The reason that substantial amount of scrap was Printed from counselvise.com P a g e | 10 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai generated that was not accounted for in the books of account was not sufficient for rejection of the books. 4.2 In respect of the addition of Rs. 1,50,48,000/- on account of understatement of stock as compared to the survey declaration, he observed that the AO had not given any independent finding other than the statement recorded during the course of survey and also the confirmatory letter filed by the appellant subsequently confirming the declaration amount. In respect of the addition u/s 41(1) of the Act, he deleted the addition by observed that the appellant had paid off some of these liabilities subsequent to the survey. 4.3 The ld.CIT(A) further noted in respect of the addition of on account of understated stock that the AO had taken the disclosure made during the course of survey as the base and added back whatever that was not voluntarily offered in the return of income by the appeal. He noted that since the stock registers were not available and there was expected to be a discrepancy as per the statement of the Manager, disclosure of Rs.2,24,50,000/- was made on account of understated stock. Moreover, physical stock was taken at the premises of Byculla Sales Depot, Andheri Saw Godown and Ambadi Saw Mill but godown at Nagpur was not covered in the survey. Since the stock inventory at Nagpur was not done and the Printed from counselvise.com P a g e | 11 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai physical stock was not compared with the stock register, there was no importance of the statement accepting that there was an understatement of stock if the same was not reflected through the accounts. As regards the validity of statement given by the Manager on the day of survey and disclosing an amount of Rs.3.01 cr. as additional income is concerned, which was later confirmed by the appellant also, it has been stated that various judicial decisions have laid down that the statement given during the course of search or survey had their evidentiary value and cannot be brushed off and disregarded. However, once the appellant was able to reconcile the stock by way of documents and also demonstrate that liability that were taken to had ceased, still exist, the statements did not make much of a difference. In the instant case, the appellant had substantiated that the disclosures made during the course of survey was not correct and hence addition merely on the basis of statement could not be sustained. 4.4. In respect of suppression of income from sale of scrap, he observed that in assessee’s own case huge amount of scrap was definitely generated while woods were cut and sized into pieces. He took note of the admission of Manger and the visual observation of the survey team in respect of scrap generation. The AO had estimated the scrap income at Rs.60,00,000/- by assuming that the mill works for 300 days in a year. Printed from counselvise.com P a g e | 12 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai Going by the statement of the Manager and also since the timber was high quality teak, the possibility of scrap generation was not ruled out. However, according to him relying upon the statement of the Manager the amount of annual income attributable to scrap generation could be a maximum of 2,40,000/- @ 20,000/- per month. Thus, the addition of the AO on account of sale of scrap was restricted to Rs.2,40,000/- and the balance amount of Rs.57,60,000/- was deleted. 5. Before us, the ld.DR has placed reliance on the detailed findings of the AO and also contented that while the ld.AR has reiterated the same contentions as made before the lower authorities inter alia claiming the ddeclaration of stock Rs. 2,24,50,000/- was stated only as estimated amount, without any working or breakup. Justification of deviation from the declaration was explained along with supporting evidences to AO. However, he disregarded rulings/directives issued by various authorities i.e Circular No. F.No.286/2/2003-IT (Inv)dated 10.03.2003 issued by CBDT, which clarifies importance of collection of evidences and relevance of statement recorded during search proceedings, and the observations of Hon’ble Gujarat High Court in the case of Kailashben Manharlal Chokshi w.r.t. confessional statements. The A.O. had gone ahead with the addition to income on account of ‘cessation of liability was based on only ground of Printed from counselvise.com P a g e | 13 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai declaration as given by the assessee at the time of survey proceedings.List of liabilities outstanding on date of survey, which were outstanding due to certain dispute and repayment of the same was uncertain amounted to Rs. 76,49,391/-out of which Rs. 4,83,750/- was declared as liability no longer existed under Revised ITR. 6. We have carefully considered all the relevant facts of the case. It is noticed that the AO based on survey findings, noticed various discrepancies in the books of account which form the basis for rejection of the books of account. He has also elaborately quoted and relied upon the statements of key persons of the assessee company which admitted the discrepancies and made statements without any element of coercion and force. Also there is nothing on record to show any retraction of the statement of key managerial persons who categorically admitted non maintenance of Stock register. Moreover, even during assessment proceedings or the appellate proceedings, the assessee did not specifically pointed out any defect in the observations of the AO that the assessee did not furnish relevant details in the prescribed format so as to ascertain the actual stock discrepancy. It is quite evident that he noticed several infirmities before rejecting the book results which are already discussed in the preceding paras. He observed that the assessee intentionally avoided to Printed from counselvise.com P a g e | 14 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai produce the stock register which was fundamental document to arrive at the correct profit in a scientific manner. The requirement of this stock register was more relevant when the survey team had worked out and prepared the stock in the same format in which was asked to be furnished during assessment proceedings for reconciliation of the stock. By not providing the details in the prescribed format, the assessee precluded the department from reaching to the correct stock. The partner admitted undeclared stock was there. The assessee had filed revised return of income to accommodate certain discrepancy however, large volume of discrepancies still existed. Therefore, we notice that the assessee did not make proper compliance before the AO resulting into rejection of books of account and drawing of adverse inferences. It failed to properly reconcile the stock by non production of stock register deliberately as even the ld.CIT(A) has admitted that considering the huge volume of turnover, existence thereof could not be denied. 6.1 The AO had given a specific finding of non disclosure of income from saw mill scrap found on the basis of survey during which the Manger of one of the units admitted such fact. Details asked for during assessment proceedings were not furnished. However, the ld.CIT(A) gave substantial Printed from counselvise.com P a g e | 15 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai relief to the assessee based on its version before him denying facts unearthed during survey. The appellate authority himself worked out some part of such income suppressed based on the statement of the Manager claiming that according to him scrap generated amounted to Rs 15,000/- to Rs 20,000/- per month and not per day as assumed by the AO However, we find that while working out the suppressed sales, the ld.CIT(A) took into consideration one unit only while the assessee had similar saw mills generating scrap in 4-5 other places as well which have not been considered for estimating such income and therefore gave a clean chit without considering the entirety of facts in correct perspective. 6.2 Thus, we note that the ld.CIT(A) has given a virtual clean chit to the assessee ignoring all the deficiencies pointed out by the AO in a rather general manner and without even calling for comments of the AO on the various factual pleas made by the assessee before him which he has accepted in a one sided manner which to our mind is not a judicious approach. Here it is not case of assessment made without any bringing on record any material finding, rather the AO has made the assessment taking into account a host of evidences collected with regard to the books of accounts, discrepancies noted and the admission of the key persons which could not be considered inadequate, in a casual and cavalier manner based Printed from counselvise.com P a g e | 16 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai on replies of the assessee made before the ld.CIT(A) which is apparent from some of his observations extracted below: “ i) In my view, the requirement of the AO to maintain the stock register, dimension wise is not practical since the item to be valued is timber which is kept log wise and which is the general practise. The same log is then cut into pieces as per the requirement of the customer and sent which is what the AO also found on the import invoice. I am therefore not in agreement with the view of the AO that the appellant is not providing details in the required format intentionally to prevent the estimation of actual profit. ii) It is a well established judicial principle that the method of valuation of stock that has been followed consistently cannot be disturbed and in the instant case also the AO cannot prescribe the format of the stock register. iii) Further, the argument of the AO that stock register is not maintained and was not found during the course of survey is also not tenable. The appellant has a turnover in excess of Rs.25 cr. and the sale is also on account of imports, further the accounts are duly audited and income tax return filed year after year. The appellant’s business is spread over different premises located in Ambadi, Andheri, Nagpur and Byculla and it would not be feasible to carry out the business of the appellant without maintaining details of stock. The statement of the Manager that stock register is not maintained is therefore difficult to accept. Thus, I am not in agreement with the view of the AO that the appellant is not maintaining any stock register. iv) As regards the validity of statement given by the Manager on the day of survey and disclosing an amount of Rs.3.01 Crores ………………. the instant case is not that of an entry operator or similar other issue wherein the circumstantial evidence and the statements are the subject matter of fact finding, but in the instant case the issue is that of understatement of stock and liability that do not exist. Both these items have to be demonstrated by way of books of accounts and Printed from counselvise.com P a g e | 17 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai documents. Once the appellant is able to reconcile the stock by way of documents and also demonstrate that liability that were taken to have ceased, still exist, the statements do not make much of a difference. 7. Taking into account all the relevant facts of the case, we are of the considered opinion that the ld.CIT(A) having decided all the issues based on one sided version of the assessee without affording any opportunity to the AO to rebut the same, allowed the assessee substantial relief without appreciating the findings and observations of the AO which are themselves based on field enquiries u/s 133A of the Act. He did not act in a fair and judicious manner in not even calling for factual report from the AO on any of the issues, thus violating the principles of natural justice. He did not appreciate the significance of statements recorded during survey as also failure of the assessee to reconcile the stock by failing to produce relevant details and stock register. Therefore, the appellate order is liable to be set aside and restored to the AO with a direction to the assessee to furnish relevant details to the AO for arriving at the true state of affairs necessary for determination of correct income of the assessee. The AO would make de novo assessment after according adequate opportunity of hearing to the assessee in this regard. Accordingly, grounds of appeal of the Revenue are allowed for statistical purposes. Printed from counselvise.com P a g e | 18 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai 8. Grounds of Cross Objection - C.O. No.83/MUM/2025 1. Based on the facts and circumstances of the case, the Ld. ACIT has erred in law and in facts, in filing an appeal against the order of CIT(A) passed under section 250 of the Income-tax Act, 1961, deleting addition to income of Rs. 1,50,48,000/- as understated stock u/s 69A, which was added merely based on declaration during survey carried on u/s. 133A, disregarding nature of commodity, explanations and detailed stock working provided. 2. Based on the facts and circumstances of the case, the Ld. ACIT has erred in law and in facts, in filing an appeal against the order of CIT(A) passed under section 250 of the Income-tax Act, 1961, deleting addition to income of Rs. 71,65,641/- of ‘Unsecured Loans’ u/s. 41(1), which was added merely based on survey declaration, without considering subsequent events, documentary evidences and explanations. 3. Based on the facts and circumstances of the case, the Ld. ACIT has erred in law and in facts, in filing an appeal against the order of CIT(A) passed under section 250 of the Income-tax Act, 1961, partly deleting addition to income of Rs. 57,60,000/- on account of sale of scrap u/s. 69A, which was added by misinterpretation of statement recoded of key personnel of the assessee firm. 9. Since as per para 7 above, we have already set aside the appellate order and remanded the entire matter to the AO for fresh consideration after allowing adequate opportunity of hearing to the assessee, we do not deem it appropriate to delve into the cross objections which become infructuous and are accordingly dismissed. Printed from counselvise.com P a g e | 19 ITA No. 1134/Mum/2025 C.O. No. 83/Mum/2025 A.Y. 2015-16 Mahavir Associates Mumbai 10. In the result, the appeal of the Revenue is partly allowed while CO of the assessee is dismissed. Order pronounced in the open court on 07.10.2025. Sd/- Sd/- PAWAN SINGH PRABHASH SHANKAR (न्यातयक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai ददनाुंक /Date 07.10.2025 Lubhna Shaikh / Steno आदेश की प्रतितलतप अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविवनवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अतिकरण/ ITAT, Bench, Mumbai. Printed from counselvise.com "