NAKODIAM DIAMONDS PRIVATE LIMITED,MUMBAI MAHARASHTRA V. INCOME TAX OFFICER CIRCLE 5(2)(1) ,MUMBAI, AAYAKAR BHAWAN,MUMBAI

ITA 6736/MUM/2024

AI Insights

The case involves Nakodiam Diamonds Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) concerning an adjustment under Section 143(1) of the Income Tax Act, 1961. The adjustment disallowed a contingent liability of Rs.21,42,503 due to inconsistencies between the Income Tax Return and Form 3CD. The appellant failed to appear in previous hearings, leading to the dismissal of their appeal by the CIT(A). The tribunal found that the CIT(A) did not have the opportunity to examine the appellant's contention on merits due to their absence and thus restored the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471404 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONIKA H. PANDE
• Assessee Lawyers: KAVITA NABERA
• Section: 143(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B”, MUMBAI BEFORE JUSTICE (RETD.) C.V. BHADANG, PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO. 6736/MUM/2024 : A.Y. : 2021-22 Nakodiam Diamonds Private Limited Office No. DC-5060, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (E), Mumbai 400 051. PAN : AABCC5715G (Appellant) Vs. Income Tax Officer, Circle-5(2)(1), Mumbai. (Respondent) Appellant by : Ms. Kavita Nabera Respondent by : Ms. Monika H. Pande Date of Hearing : 12/02/2025 Date of Pronouncement : 12/02/2025 O R D E R PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT : This appeal by the assessee is filed against the order dated 25.11.2024 passed by the learned Commissioner of Income Tax (Appeals) (‘CIT(A)’ for short), which in turn arose out of an adjustment under Section 143(1) of the Income Tax Act, 1961 (‘Act’ for short) made disallowing contingent liability of Rs.21,42,503/-. This is on account of the inconsistency in the said liability in Income Tax Return (ITR) and Form 3CD. The appeal pertains to assessment year 2021-22. 2. We have heard parties. Perused record. 3. A perusal of the impugned order dated 25.11.2024 would indicate that the appellant failed to appear or contest the appeal inspite of three notices dated 2 ITA No. 6736/Mum/2024 Nakodiam Diamonds Pvt. Ltd. 05.10.2023, 21.02.2024 and 18.07.2024 which were posted on the ITBA portal. The learned CIT(A) has observed in para 5.5 of the order that the appellant had the opportunity to correct the mistake in Form 3CD, which opportunity the appellant did not avail of. It is further observed that the appellant had not filed any reply or evidence before the appellate authority to establish that there was a mistake in reporting Form 3CD. In such circumstances, the learned CIT(A) has observed that the appellant was not interested in pursuing the appeal leading to dismissal of the same. 4. The learned counsel for the appellant has submitted that the appellant had not received the notices and hence the appellant failed to appear and contest the appeal. On merits, it is submitted that the learned CIT(A) was in error in making the disallowance of contingent liability without appreciating the fact that the same has not been claimed by the assessee in its Profit & Loss Account. 5. We find that the learned CIT(A) had neither the benefit nor the occasion to examine this contention on merits as there was no appearance on behalf of the appellant. In the circumstances and in the interest of justice and fair disposal of the matter we find that appellant can be granted one opportunity to prosecute the appeal before the learned CIT(A). In that view of the matter, the appeal is allowed. The appeal filed by the appellant is restored to the file of leaned CIT(A) for disposal according to law. The appellant shall diligently prosecute the appeal and shall be at liberty to produce such material before the learned CIT(A) as may be deemed fit. The appeal is allowed for statistical purpose in the aforesaid terms. Order pronounced in the open court on 12/02/2025. Sd/- Sd/- (AMARJIT SINGH) (JUSTICE (RETD.) C.V. BHADANG) ACCOUNTANT MEMBER PRESIDENT Mumbai; Dated : 12/02/2025 SSL 3 ITA No. 6736/Mum/2024 Nakodiam Diamonds Pvt. Ltd. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(Judicial) 4. PCIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai "