SHAMROCK APPARELS,VISAKHAPATANAM V. INCOME TAX OFFICER, WARD-1(1), VISAKHAPATNAM

ITA 346/VIZ/2025

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Shamrock Apparels, a partnership firm engaged in the apparel business, filed an appeal against the order of the Commissioner of Income Tax (Appeals) which upheld the adjustments made by the Centralized Processing Center (CPC) under section 143(1) of the Income Tax Act, 1961. The CPC had adjusted the long-term capital gains reported by the assessee, leading to a higher tax demand. The CIT(A) upheld the CPC's decision as the assessee failed to respond to multiple notices. The Tribunal, considering the circumstances and the significant tax demand, provided a final opportunity for the assessee to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711932 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Capital Gains; Principle of natural justice

Judgement Text

"आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM (HYBRID HEARING) श्री धिजय पाल राि, उपाध्यक्ष, एिं श्री एस बालाक ृष्णन, लेखा सदस्य क े समक्ष BEFORE SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपीलसं./I.T.A.No.346/VIZ/2025 (निर्धारणवर्ा/ Assessment Year: 2023-24) Shamrock Apparels D.No. 9-29-20, 2nd Floor Siripuram, Visakhapatnam Pin code: 530003 Andhra Pradesh [PAN:ACPFS3513B] Vs. Income Tax Officer-Ward – 1(1) Income Tax office Pratyakshakar Bhavan MVP Double Road Visakhapatnam – 530017 Andhra Pradesh (अपीलधर्थी/Appellant) (प्रत्यर्थी/Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri GVN Hari, Advocate राजस्व का प्रतततितित्व/ Department Represented by : Dr. Aparna Villuri, Sr. AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 17.07.2025 घोर्णध की तधरीख/Date of Pronouncement : 25.07.2025 आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER: 1. This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals)/ADDL/JCIT(A)-11, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/APL/S/250/2024- Printed from counselvise.com I.T.A.No.346/VIZ/2025 Shamrock Apparels Page. No 2 25/1074980923(1) dated 25.03.2025 for the A.Y.2023-24 arising out of the order passed under section 143(1) of Income Tax Act, 1961 (in short ‘Act’) dated 07.11.2024. 2. Brief facts of the case are that, assessee is a partnership firm engaged in apparel business and filed return of income on 30.07.2023 admitting total income of Rs.13,37,00,120/- for the A.Y. 2023-24. The Centralized Processing Center (in short “CPC”) processed the return and issued the Intimation under section 143(1) of the Act on 07.11.2024. In the Intimation, the CPC made adjustment of Rs.31,22,331/- under the head Long term capital gains. The CPC computed the Long-term capital gains at Rs.13,43,99,752/- as against the Long term capital gains of Rs.13,12,77,421/-. 3. On being aggrieved by the adjustment made by the Ld. AO, assessee filed an appeal before Ld. CIT(A). Ld. CIT(A) upheld the order of the Ld. AO since assessee has not responded to any of the notice / opportunities provided to the assessee. 4. On being aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal: - “1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in deciding the appeal ex-parte. Printed from counselvise.com I.T.A.No.346/VIZ/2025 Shamrock Apparels Page. No 3 3. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the adjustment of Rs 31,22,331 made by the CPC towards long term capital gains by erroneously computing the indexed cost of acquisition. 4. Any other ground that may be urged at the time of appeal hearing.” 5. At the outset, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that the Ld. CIT(A) has passed the order without providing sufficient opportunities to the assessee. He further pleaded that the assessee could not respond to the notices issued by the Ld. CIT(A). He therefore prayed for one final opportunity before Ld. CIT(A) to submit the relevant documents. 6. Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] strongly objected to theplea of the Ld.AR and vehemently argued that revenue has provided ample opportunities to the assessee as detailed in their respective orders. However, assessee has failed to comply with the notices issued by the Revenue Authorities. She therefore pleaded that the no further opportunity should be granted and prayed of upholding the order of the Ld.CIT(A). 7. We have heard rival contentions and perused the material available on record. It is an undisputed fact that the assessee has not fully complied with the notices and has also not responded to the various notices issued to the assessee as detailed in the order of the Ld. CIT(A). In the interest of natural justice, considering the plea of the Ld.AR and considering the huge demand, we are of Printed from counselvise.com I.T.A.No.346/VIZ/2025 Shamrock Apparels Page. No 4 the considered view that assessee may be provided one final opportunity to substantiate the case before Ld. CIT(A). Needless to say, that the assessee should cooperate with the remand proceedings failing which the Ld. CIT(A) is at liberty to decide the case based on the material available on record. Accordingly, the grounds raised by the assessee are statistically allowed. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 25th July, 2025. Sd/- (धिजय पाल राि) (VIJAY PAL RAO) उपाध्यक्ष/VICE PRESIDENT Sd/- (एस बालाक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Dated: 25.07.2025 Giridhar, Sr.PS आदेशकीप्रनतनलनपअग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Shamrock Apparels D.No. 9-29-20, 2nd Floor Siripuram, Visakhapatnam Pin code: 530003 Andhra Pradesh 2. रधजस्व/ The Revenue : Income Tax Officer-Ward – 1(1) Income Tax office Pratyakshakar Bhavan MVP Double Road Visakhapatnam – 530017 Andhra Pradesh 3. The Principal Commissioner of Income Tax 4. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam Printed from counselvise.com "