NAYAN REAL ESTATE PRIVATE LIMITED,THANE V. INCOME TAX OFFICER WARD 7(3)(1), MUMBAI, MUMBAI

ITA 2330/MUM/2025

AI Insights

The case involves Nayan Real Estate Pvt. Ltd., the appellant, contesting various additions and disallowances made by the Assessing Officer (AO) under sections 69B and 37(1) of the Income Tax Act, 1961, as confirmed by the Learned Commissioner of Income Tax (Appeals), NFAC. The appellant challenged the additions of Rs. 9,89,100 as unexplained investment and Rs. 54,70,774 as unexplained expenditure, along with a disallowance of Rs. 2,87,00,000 under Section 37(1) for provision for civil interior work. The appellant also raised procedural issues regarding the validity of notices issued under sections 143(2) and 143(3) of the Act. The ITAT found that the CIT(A) had not addressed the appeal on merits and thus remanded the case back for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711726 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2022-2023
• Other Referred Cases: Premkumar Arjundas Luthra [(2017) 297 CTR 614]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI
• Assessee Lawyers: PAVAN VED VIRTUALLY
• Keywords: Unexplained expenditure; Unexplained investment
• Section: 143(3); 37(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “B” Bench, Mumbai. Before Shri Narender Kumar Choudhry (JM) & Shri Omkareshwar Chidara (AM) ITA No. 2330/MUM/2025 (Assessment Year : 2022-23) Nayan Real Estate Pvt. Ltd. Shop 2, ground Floor, IVY Building No. 2, Hubtown Gardenia Shantivan, Mira Road East, Maharashtra 401 107. Vs. ITO Ward 7(3)(1) Room No. 126J Aayakar Bhavan M.K. Road Mumbai-40 0020. PAN : AADCN7524J Appellant Respondent Assessee by : Shri Pavan Ved (Virtually) Revenue by : Shri Leyaqat Ali Aafaqui Date of Hearing : 03/07/2025 Date of pronouncement : 25/07/2025 O R D E R Per Omkareshwar Chidara (AM) :- In the above cited appeal, the appellant filed an appeal before the ITAT with the following revised grounds of appeal :- 1. On the facts and circumstances of the case as well as in Law the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in confirming the order of the Learned Assessing Officer (AO) and has upheld the order passed u/s 143(3) r.w.s 144B of the Act. 2. On the facts and circumstances of the case as well as in Law the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in upholding the addition of Rs. 9,89,100/- made by the AO u/s 69B of the Income Tax Act, 1961 as unexplained investment. 3. On the facts and circumstances of the case as well as in Law the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in upholding the addition of Rs. 54,70,774/- made by the AO u/s 69B of the Income Tax Act, 1961 as unexplained expenditure. 4. On the facts and circumstances of the case as well as in law, the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in upholding the disallowance of Rs. 2,87,00,000/- under Section 37(1) of the Act on account of provision for civil interior work, despite the fact that Printed from counselvise.com Nayan Real Estate Pvt. Ltd. 2 the appellant had already suo moto disallowed 30% of the expense under Section 40(a)(ia). 5. Under the circumstances the Appellant has been denied a reasonable opportunity to present its case. 6. The order under appeal is not only bad in law and invalid, but also against the principles of natural law of equity and justice. 7. On the facts and circumstances of the case as well as in law, the learned Assessing officer erred in issuing notice u/s 143(2) of the Act dated 02/06/2023 without complying with the CBDT Instruction F.No.225/157/2017/ITA-II dated 23.06.2017. Hence the notice issued u/s 143(2) is not valid as per law and hence the entire assessment proceedings u/s 143(3) of the Act are ipso facto without jurisdiction and liable to be quashed. 8. On the facts and circumstances of the case as well as in law, the notice u/s 143(2) is also invalid on the ground that it was not issued by \"prescribed authority that is Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation),Circle- 1(1)(1), Delhi as per CBDT notification dated 28/05/2022 9. The appellant craves leave to add, to amend, alter/delete and/or modify the above revised grounds of appeal on or before the final hearing. 2. From the order of Ld. CIT(A), it is observed that similar grounds of appeal were raised before him. During the appeal proceedings before Ld. CIT(A), the appellant was given three opportunities to substantiate his case. But, the appellant did not respond to any of these notices and hence the appeal was dismissed by Ld. CIT(A). 3. Aggrieved by the order of Ld. CIT(A), the appellant filed an appeal before ITAT with the grounds of appeal as mentioned above. During the hearing proceedings before the ITAT, Ld. AR of the appellant, Mr. Pavan Ved has appeared virtually and pleaded that due to certain unavoidable circumstances, the appellant could not furnish the details and did not respond to the notices sent by Ld. CIT(A). He has pleaded that the appellant may be given one more opportunity to explain his case before Ld. CIT(A). 4. Ld. DR opposed the plea of appellant. Printed from counselvise.com Nayan Real Estate Pvt. Ltd. 3 5. Heard both sides and perused the orders of Ld. AO and Ld. CIT(A). After the hearing, the Bench decided to remand the issue back to the file of Ld. CIT(A) for decision afresh by giving liberty to appellant for raising any ground(s) as emanates from the orders passed by authorities below. This decision is taken in view of the fact that the Ld. CIT(A) has not passed the order on merits which is not correct in view of the decision of Hon'ble Bombay High Court in the case in Premkumar Arjundas Luthra [(2017) 297 CTR 614]. But the appellant is directed to cooperate with the Ld. CIT(A) in disposing the appeal expeditiously. 6. The appeal of appellant is allowed for statistical purposes. Order pronounced in the open Court on 25/07/2025. Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai PS Printed from counselvise.com "