SHREE CHALTHAN VIBHAG KHAND SAHAKARI MANDLI LTD.,SURAT V. ITO, WARD 1, BARDOLI

ITA 1205/SRT/2025

AI Insights

The case involves Shree Chalthan Vibhag Khand Udyog Sahakari Mandli Ltd., the appellant, contesting the order passed by the Income Tax Officer, Ward-1, Bardoli, which was upheld by the CIT (Appeals), NFAC, New Delhi. The dispute centered on the assessment of income for the year 2022-23, where the assessee's income was assessed at Rs. 8,98,11,787 against a returned income of nil, after claiming carried forwards of unabsorbed depreciation. The additions and disallowances made were based on estimations and presumptions, which the assessee argued were arbitrary and without proper jurisdiction. The tribunal found that the assessee had not complied with previous opportunities to present necessary details and thus remanded the case for a de novo assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831300 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 17-11-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: AKSHAY M MODI
• Keywords: Corroborative evidences; Depreciation; Principle of natural justice; Assessment record; Unabsorbed depreciation
• Section: 144; 37(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.1205/Srt/2025 (Assessment Year: 2022-23) Shree Chalthan Vibhag Khand Udyog Sahakari Mandli Ltd., At. & PO. Chalthan, Tal.Palsana, Surat-394305. [PAN : AAAAC0477A] Vs. Income Tax Officer, Ward-1, Bardoli. (Appellant) .. (Respondent) Appellant by : Shri Akshay M Modi, AR Respondent by: Shri Mukesh Jain, CIT. DR Date of Hearing 19.01.2026 Date of Pronouncement 21.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Assessee against the order dated 01.10.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“the CIT(A) in short), under Section 250 of the Income-tax Act, 1961 (“the Act”), relating to the Assessment Year 2022-23. 2. The assessee has raised the following grounds of appeals: 1. On the facts and in the circumstances of the case as well in law, the CIT (Appeals), NFAC, New Delhi has erred in confirming the order passed by the ITO, Ward 1, Bardoli (for the sake of brevity \"The AO\") u/s 144 r.w.s. 144B of the Act for the income assessed at Rs. 8,98,11,787/- against the returned income at Rs. NIL (after claiming carried forwards of unabsorbed depreciation for the year under appeal for Rs. 3,74,07,460/-), making various additions/disallowances for the aggregate amount of Rs. 12,72,19,247/- purely estimations/presumptions and merely on arbitrary and perverse observations, being without jurisdiction, bad in law, in-valid, illegal, predetermined, subjective, unwarranted of facts, is liable to be quashed or annulled in toto. 2. On the facts and in the circumstances of the case as well as in law, the CIT (Appeals), NFAC, Delhi has erred in passing ex parte order passed u/s 144 without considering the details on Printed from counselvise.com ITA No. 1205/Srt/2025 Asst. Year : 2022-23 - 2– records, which is in pure violation of the principles of natural justice, without jurisdiction, bad in law, illegal, invalid, arbitrary, void ab initio and hence liable to be quashed. 3. On the facts and in the circumstances of the case as well in law, both the lower authorities have erred in making adhoc disallowance to the extent of Rs. 1,98,42,948/- at the rate of 10% of interest expenses claimed being the expenditure incurred wholly and exclusively for the purposes of business u/s 37(1) of the Act, without appreciating in the right, lawful and proper perspectives the explanations supported with the corroborative evidences/materials, etc. placed during the assessment proceedings, but purely on estimations, arbitrary. illogical and irrational inferences and hence, liable to be struck down. 4. On the facts and in the circumstances of the case as well in law. both the lower authorities have erred in making adhoc addition to the extent of Rs. 10,73,76,299/- at the rate of 10% of the total sundry creditors appearing in the audited Balance Sheet treating it as income, without appreciating in the right, lawful and proper perspectives the explanations supported with the corroborative evidences/materials, etc. placed during the assessment proceedings, but purely on estimations, arbitrary. illogical and irrational inferences and hence, liable to be struck down. 5. On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously failed in granting the claim of set off of carried forward of unabsorbed depreciation of preceding years against the income assessed at Rs. 8,98,11,787/- out of the carried forwards of unabsorbed depreciation and business loss for the aggregate amount of Rs. 31,40,56,336/- (being assessed and available on the assessment records) and hence, the income assessed at Rs. 8,98,11,787/-and consequently, the demand of tax, interest, etc. raised for the amount of Rs. 3,36,75,097/- is without jurisdiction, patently in contravention of the provision of the law, subjective, arbitrary, unwarranted of assessment records and hence, liable to be annulled or nullified in toto. 6. On the facts and in the circumstances of the case as well in law, the CIT (Appeals), NFAC, New Delhi has erred in overlooking the apparent mistake committed by the AO by adding the amount of refund of Rs. 46,52,160/- to the amount of total amount of demand of tax including the interest computed at Rs. 3,36,75,097/- and hence, the notice of demand u/s 156 of the Act issued for the alleged demand of tax, interest, etc. for Rs. 3,83,27,257/- being without jurisdiction, bad in law, suffers from the apparent mistake of law, invalid, unsustainable and hence, liable to be struck down. 7. Your appellant further reserves its rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal. 3. On perusal of the records, it is observed that the assessee was afforded opportunities of hearing to furnish details, clarifications, and explanations to substantiate its claim. However, despite being granted sufficient opportunities, the assessee remained non-compliant and failed to furnish the requisite details or explanations before the Ld. CIT(A). Consequently, the Ld. CIT(A), based on the material available on record, upheld the action of the Assessing Officer and dismissed the appeal of the assessee. We further observe that the assessee also failed to submit any details or supporting evidence even before the Assessing Printed from counselvise.com ITA No. 1205/Srt/2025 Asst. Year : 2022-23 - 3– Officer. During the course of hearing before us, the Ld. Counsel for the assessee prayed that, given an opportunity, the assessee would furnish all the necessary details, clarifications and explanations before the revenue authorities. Considering the totality of the facts and in the interest of justice, we deem it appropriate to remand the matter to the file of the Assessing Officer for conducting the assessment de novo. The Ld.AR agreed to pay a cost of Rs.10,000/- which shall be deposited into the “Prime Minister’s Relief Fund” within 30 days from the date of receipt of this order, and proof of such payment shall be furnished before the Assessing Officer. The assessee is directed to submit all relevant bank statements, documents and explanations before the Assessing Officer and to strictly comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments. 4. In the result, the appeal of the assessee is allowed for statistical purposes in the terms indicated above. The order is pronounced in the open Court on 21.01.2026. Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Surat; Dated 21.01.2026 **mv आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)- 5. िवभागीय Ůितिनिध , आयकर अपीलीय अिधकरण , /DR,ITAT, Surat, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat 1. r …03.11.2025… Printed from counselvise.com "