PEBBLEBAY DEVELOPERS PVT LTD,SANTACRUZ WEST, MUMBAI V. DCIT CIRCLE-13(1)(2), MUMBAI, AAYKAR BHAVAN, M.K. ROAD, MUMBAI

ITA 5980/MUM/2024

AI Insights

The case involves M/s. Pebblebay Developers Pvt. Ltd., the appellant, challenging the order of the National Faceless Appeal Centre (NFAC), Delhi, which dismissed their appeal against an assessment order for the Assessment Year 2018-2019. The primary contention was that the NFAC erred in deciding the appeal ex parte and dismissed it on grounds that were not applicable, as the assessment order had been superseded by a fresh assessment. The Tribunal found that the CIT(A) had incorrectly assumed the appeal was against the original assessment order rather than the revised one. Consequently, the Tribunal set aside the CIT(A)'s order and directed a re-hearing of the appeal concerning the revised assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474101 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 250; 251; 43CA; 37

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL \"C” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA No. 5980/MUM/2024 (Assessment Year: 2018-2019) M/s. Pebblebay Developers Pvt. Ltd. 4th Floor, Raheja Chamber, Linking Road And Main Ave Santacruz West, Mumbai – 400054. Maharashtra. [PAN: AACCG1645E] …………. Appellant Deputy Commissioner of Income Tax Circle 13(1)(2), Mumbai Aayakar Bhavan, M.K. Road, Mumbai – 400020. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Ravindra Poojary Shri Mahesh Pamnani Date Conclusion of hearing Pronouncement of order : : 02.01.2025 03.01.2025 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Assessee has challenged the order dated 07/10/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 26/10/2023, passed under Section 143(3) read with Section 260 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2018-2019. 2. The Appellant has raised following grounds of appeal : ITA No. 5980/MUM/2024 Assessment Year: 2018-2019 2 “1. Ex-party Order: 1.1 On the facts and in the circumstances of the case in law, the NFAC erred in deciding the appeal ex parte in violation of the principle of natural justice. 1.2 On the facts and in the circumstances of the case and in law, the order dated 07.10.2024 passed by the NFAC is bad in law as it dismissed the appeal by giving reason that since the assessment order against which appeal has been filed has been set aside by the Hon. Bombay High Court as denovo and since it has been superseded by a fresh assessment order u/s 143(3) r.w.s 260 dated 26.10.2023, hence appeal filed by the assessee before NFAC has become redundant without appreciating the fact adjudicating of appeal filed on merit, Thus the said order passed by by NFAC being in violation of the provisions of Section 250 and 251 of the Act and may be quashed. 2. Disallowance made u/s 43CA of Rs.4.13,43,483/-: 2.1 On the facts of the case, in law and under the circumstances, the NFAC erred in confirming the disallowance of Rs.4,13,43,483/- by invoking the provisions of section 43CA of the Act in respect of being difference between the stamp value of the property sold vis-a-vis the agreement value on the ground on non- furnishing of sale agreement which could not be sustained without appreciating that the details as sought were furnished have not even been considered by the A.O before making the impugned addition and therefore addition made should be deleted. 3. Addition on account of difference in Service Tax turnover of Rs.52,12,130/-: 3. Addition on account of difference in Service Tax turnover of Rs.52,12,130/-: 3.1 On the facts of the case, in law and under the circumstances, the Ld. NFAC erred in confirming the addition of Rs. 52,12,130/- is in respect of difference in turnover as shown in the profit and loss account and that as per service tax return without appreciating the facts service tax is applicable on receivable of advance and not applicable as on sale of flat after receive of occupancy certificate, further that the appellant had furnished its reply justifying the said difference vide its detail letter dated 12.03.2021 before A.O. Thus, the impugned addition made without considering reply made is required to be deleted. 4. Disallowance made u/s 37 of Rs. 1,71,95,719/-: 4.1 On the facts of the case, in law and under the circumstances, the Ld. CIT (A) erred in confirming the disallowance of finance cost under section 37 of the Act amounting to Rs. 1,71,95,719/- without appreciating the ITA No. 5980/MUM/2024 Assessment Year: 2018-2019 3 fact that the as similar facts interest cost has been allowed in earlier year by the A.O himself in scrutiny assessments (Refer Assessment orders from A.Y. 2014-15 to A.Y. 2017- 18). Thus, the impugned addition made in respect to be deleted. 4.2 On the facts of the case, in law and under the circumstances, the Ld. NFAC failed to appreciate that the interest costs which is specifically made covered by section 36(1)(iii) of the Act and provision of section 37 specifically states that it applies only to the expenditure of the nature not covered by sections 30 to 36 of the Act. Hence no disallowance should have been made by A.O under section 37 of the act.” 3. Heard both the sides perused the material on record. 4. The relevant facts in brief are that in the first round, assessment was framed on the Assessee vide Assessment Order, dated 09/04/2021. However, the aforesaid Assessment Order was quashed by the Hon’ble Bombay High Court vide a judgment, dated 07/08/2023, passed in Writ Petition No.3900 of 2021 with the directions to the Assessing Officer to complete the assessment and pass assessment order by 31/10/2023. Pursuant to the aforesaid directions, Assessment Order, dated 26/10/2023, was passed by the Assessing Officer under Section 143(3) read with Section 260 of the Act. The Assessee preferred appeal against the aforesaid order before the CIT(A). Vide order dated 07/10/2024, the CIT(A) dismissed the aforesaid appeal preferred against the Assessment Order, dated 26/10/2023, on incorrect assumption of facts that the appeal has been preferred against the original Assessment Order, dated 09/04/2021. A perusal of From 35 placed by the Assessee on record shows that the Assessee had preferred appeal against the Assessment Order dated 26/10/2023 on 16/11/2023. We note that notice of hearing were issued to the Assessee on 09/04/2024, 17/05/2024, 03/06/2024 and 09/06/2024 which clearly shows that the aforesaid notice of hearing pertain to the appeal preferred by the ITA No. 5980/MUM/2024 Assessment Year: 2018-2019 4 Assessee against the Assessment Order, dated 26/10/2023. Whereas, the CIT(A) has taken the appeal to the appeal instituted on 26/04/2021 against the original assessment order dated 09/04/2021. Accordingly, the order dated 07/10/2024 passed by the CIT(A) is set aside with the directions to decide the appeal preferred by the Assessee against the Assessment Order, dated 26/10/2023, as per law after granting the Assessee reasonable opportunity of being heard. In terms of aforesaid Ground No.1.1 and 1.2 raised by the Assessee are treated as allowed for statistical purposes. While Ground No.2 to Ground No.5 raised by the Assessee are dismissed as having being rendered infructuous. 5. In result the present appeal is allowed for statistical purposes. Order pronounced on 03.01.2025 Sd/- Sd/- (Omkareshwar Chidara) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांक Dated : 03.01.2025 Milan, LDC ITA No. 5980/MUM/2024 Assessment Year: 2018-2019 5 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. आयकर आयुƅ/ The CIT 4. Ůधान आयकर आयुƅ / Pr.CIT 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai "