SRS SMART RETAIL LTD,FARIDABAD V. ACIT CIRCLE-2(1), FARIDABAD

ITA 856/DEL/2020

AI Insights

The case involves M/S SRS Smart Retail Ltd., which appealed against the order of the Ld. CIT(Appeals), Faridabad, concerning the assessment year 2016-17. The primary grievances included the lack of adequate hearing opportunities, disallowances made under various sections of the Income Tax Act, and additions made under section 68 regarding unexplained share capital. The tribunal noted that the assessee had provided additional details post the CIT(A)'s decision, which were not considered in the initial ruling. Both parties agreed that in the interest of justice, the matter should be remitted back for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31637 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: SOMIL AGARWAL
• Keywords: Opportunity of being heard; Principle of natural justice; TDS; Bogus Share capital
• Section: 143(3); 68; 37; 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA NO. 856/Del/2020 A.YR. : 2016-17 M/S SRS SMART RETAIL LTD. C/O SRS MALL, 3RD FLOOR, SECTOR-12, FARIDABAD HARYANA-121007 (PAN: AAUCS9682H) VS. ACIT, CIRCLE 2(1), FARIDABAD HARYANA (APPELLANT) (RESPONDENT) Appellant by : Sh. Somil Agarwal, Adv. Respondent by : Sh. Sahil Kumar Bansal, Sr. DR. Date of hearing : 07.01.2025 Date of pronouncement : 09.01.2025 ORDER PER SHAMIM YAHYA, AM : The assessee filed the present appeal against the order of the Ld. CIT(Appeals), Faridabad dated 28.11.2019 pertaining to assessment year 2016-17 on the following grounds:- 1) That having regard to the fact and circumstances of the case, Ld. CIT (A) without considering the submissions placed on record before him electronically, in as much as no adequate 2 | P a g e opportunity of hearing was granted and framing the impugned order without considering the principles of natural justice. 2) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in making disallowance of Rs.72,75,922/- being 10% of employee benefit expenses (Rs.2,57,38,249) and other expenses (Rs. 4,70,20,971) u/s 37 of Income Tax Act, allegedly on the ground Ld A.O observed that the said expenses are personal in nature and that too by recording incorrect facts, findings and making allegations based on surmises and conjectures and without observing the principal of natural justice. 3) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the disallowance of Rs.72,75,922/- made in the assessment order is bad in law and against the facts and circumstances of the case. 4) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in making disallowance of Rs.2,54,000/- u/s 40(a)(ia) of the Act, allegedly on the ground that assessee failed to deposit the TDS into the Government account, vide discussion made in para - 5 of the assessment order. 5) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the disallowance of Rs.2,54,000/- made in the assessment order is bad in law and against the facts and circumstances of the case. 6) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in making addition of Rs.4,21,20,000/- u/s 68 of the Act, allegedly on account of unexplained share capital 3 | P a g e and that too by recording incorrect facts, findings and making allegations based on surmises and conjectures and without observing the principal of natural justice. 7) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming, the addition of Rs. 4,21,20,000/- is bad in law and against the facts and circumstances of the case. 8) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in making addition u/s 68 of the Act, on the ground that such income was taxable u/s 115BBE and is bad in law against the facts and circumstances of the present case. 9) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in charging interest, more so when such interest could not be levied under the law. 10) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in passing the impugned order without giving adequate opportunity of being heard and by not observing the principles of natural justice. 11) That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other. 2. The brief facts of the case are that assessee filed its return on 17.10.2016 declaring loss of Rs. 7,21,76,653/-. Later on, the case of the assessee was selected under scrutiny through CASS. The AO made the addition u/s. 68 of Rs. 4,21,20,000/ and completed the assessment u/s. 143(3) on 26.12.2018 at an assessed income at Rs. 4,21,20,000/-. Upon assessee’s appeal, Ld. CIT(A) gave several opportunities to the assessee and the last opportunity was given on 4 | P a g e 25.11.2019 and Ld. CIT(A) passed his appellate order on 28.11.2019. Now it is the contention of the Ld. AR that assesse furnished the details on 09.12.2019 in anticipation that Ld. CIT(A) will consider the same. However, Ld. CIT(A)’s order was served on assessee on 28.12.2019. In these circumstances, Ld. Counsel for the assessee prayed that now all the details are on record of the Ld. CIT(A), hence, the matter may be remitted to the file of the Ld. CIT(A) to consider the issues afresh, and pass a order on the basis of details furnished. Ld. DR submitted that enough opportunities were given to the assessee, but he fairly agreed that in the interest of justice an opportunity can be given to the assesseee to canvass it case. 3. In view of the aforesaid facts and circumstances of the case and in the interest of justice, we deem it fit and proper to remit back the issues in dispute to the file of the Ld. CIT(A), Faridabad with the directions to decide the same, afresh, on the basis of the records which are available to him and give an adequate opportunity of being heard to the assessee and pass a speaking order. We hold and direct accordingly. 4. In the result, the Assessee’s appeal is allowed for statistical purposes. Order pronounced on 09/01/2025. Sd/- (SUDHIR PAREEK) Sd/- (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBHATNAGAR Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "