NIRAJ RATHI & SONS HUF,GHAZIABAD vs. INCOME TAX OFFICER, GHAZIABAD

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ITA 5941/DEL/2024Status: DisposedITAT Delhi28 May 2025AY 2012-132 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The tribunal held that the CIT(A) did not have the power to convert an unexplained investment addition into income under section 56(2)(vii) in its appellate jurisdiction. Therefore, the addition made by the CIT(A) was not sustainable.

What were the facts?

The assessee's appeal for AY 2012-13 was heard ex-parte as no one appeared for the assessee. The Assessing Officer had made an addition for unexplained investment, which was converted to income under section 56(2)(vii) by the CIT(A).

What were the issues?

Whether the CIT(A) had the power to convert an addition for unexplained investment into income under section 56(2)(vii) in its appellate proceedings.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 56(2)(vii),Section 251(1)(a)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, DELHI BENCH: SMC NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Respondent: DR |

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: "SMC" NEW DELHI

BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER

ITA No.5941/Del/2024 Assessment Year: 2012-13

Niraj Rathi & Sons HUF, | Vs. | Income Tax Officer, D-45, First Floor, | Ward-2(2)(5), Chandar Nagar, | Ghaziabad Ghaziabad PAN :AAEHN7438P (Appellant) | (Respondent)

Assessee by | None Department by | Sh. Manoj Kumar, Sr. DR

Date of hearing | 28.05.2025 Date of pronouncement | 28.05.2025

ORDER

This assessee's appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the "CIT(A)/NFAC"], Delhi's DIN and order no. ITBA/NFAC/S/250/2024-25/1069854882(1), dated 22.10.2024 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act').

2.

Case called twice. None appears at the assessee/HUF's behest. It is accordingly proceeded ex-parte.

3.

It is next noticed with the able assistance coming from the department side that the Assessing Officer's assessment framed on 12.11.2019 had made an unexplained investment addition of Rs. 14,73,340/- in the assessee's hands which stands converted to that under section 56(2)(vii); and, therefore, it is hereby concluded in the light of CIT Vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC); CIT Vs. Sardari Lal & Co. (2001) 251 ITR 864 (Del.) and CIT Vs. Union Tyres (1999) 240 ITR 556 (Del.) that such a course of action is not available to the CIT(A) in exercises of his lower appellate jurisdiction under section 251(1)(a) of the Act.

- 4. That being the clinching factual position, the tribunal hereby finds no merit in the impugned addition. The same is directed to be deleted. - 5. This assessee's appeal is allowed.

Order pronounced in the open court on 28th May, 2025

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER

Dated: 28th May, 2025.

RK/-

Copy forwarded to:

- 1. Appellant - 2. Respondent - 3. CIT - 4. CIT(A) - 5. DR

Asst. Registrar, ITAT, New Delhi

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