GLOBAL OCEAN LOGISTICS INDIA LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, MUMBAI

Disallowance of Expenses: The CIT(A) has failed to consider the evidences presented before them during the appeal proceedings by confirming the stand taken by the AO.

Reserved Rights: The Company craves leave to add, amend, alter, withdraw, or substitute any of the grounds of appeal at any time before or during the hearing of the appeal, and to argue any additional grounds that may be necessary or proper in the interest of justice.”

Rival submissions of both the parties have been heard and record perused. The learned authorised representative (in short, learned AR) of the assessee submits that no fair and proper opportunity was given by the Assessing Officer (AO). The AO issued only two show-cause notices under section 142(1), that is, first on 26- 06-2024 and second on 14-02-2025. Notice dated 26-06-2024 was properly replied. However, in the show-cause notice dated 14-02-2025, only two days' effective time was given, though there was sufficient time for passing the assessment order. The assessee was deprived of a reasonable opportunity. The AO made addition under section 68 of Rs. 1.77 crore on account of unexplained credit and disallowance of Rs. 12,86,256/- under section 37. The learned CIT(A) adjudicated the appeal on different facts which are not related to the assessee. The learned CIT(A), in paras 7.4.2 and 7.4.3, has referred to the facts regarding reopening under section 147/148 and justification thereon. However, there is no such fact in the case of the assessee. Similarly, there are other inconsistencies in the facts recorded by the learned CIT(A). The learned AR of the assessee submits that since no fair and reasonable opportunity was allowed to the assessee to substantiate the unsecured loan and disallowance of expenses, and the assessee may file further/additional evidence, therefore, the matter may be restored back to the file of the AO with the direction to pass the assessment order afresh after allowing fair and reasonable opportunity to the assessee. 3. On the other hand, the learned Senior Departmental Representative (in short, learned Senior DR) for the Revenue, after going through the facts recorded by the learned CIT(A) and reference to the show-cause notices issued to the assessee, submits that the AO has allowed opportunity to the assessee, but the assessee has failed to avail such opportunity. On the discrepancies in the facts recorded by the learned CIT(A), the learned Senior DR for the Revenue submits that the Bench may take an appropriate view in accordance with law. 4. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that the assessee filed its return of income for AY 2023-24 on 19-10-2023 declaring taxable income of Rs. 5.21 crore. The case was selected for complete scrutiny. Notice under section 143(2) was issued on 19-06-2024. Notice under section 142(1), show- cause notice for seeking certain details, was issued on 26-06-2024 for making compliance by 10-07-2024. The AO recorded that the assessee made part compliance. Second show-cause notice was issued on 14-02-2025 for making compliance by 19-02-2025. The AO, on page 4, recorded that such notice was not received by the assessee nor responded too. The AO concluded that sufficient opportunity was given.The AO, in para 3.3 of his order, recorded that the assessee has received unsecured loans aggregating to Rs. 1.77 crore from three parties. The assessee was asked to furnish details of the persons from whom the loans were taken. The AO concluded that the assessee did not furnish the details, thereby treating the unsecured loans as unexplained cash credit under section 68.The AO further noted that the assessee has shown various expenses aggregating to Rs. 42,87,519/- on account of sales promotion expenses, power and fuel expenses, travelling expenses, conveyance and festival celebration. The AO concluded that the assessee has not explained the expenses nor filed any evidence. For want of reply, the AO disallowed 30% of the total claim of expenses, thereby disallowing Rs. 12,86,256/-, while passing the assessment order on 18-03-2025. 5. On carful perusal of order passed by ld CIT(A), we find that he while considering the facts of the assessee, has considered different facts which are not otherwise related to the facts of the assessee. Thus, the order of the learned CIT(A) is not sustainable in the eyes of law. Before us, the learned AR of the assessee vehemently argued that he was not given a fair and reasonable opportunity and that the matter may be restored back to the file of the AO for passing the assessment order afresh. Considering the overall facts and circumstances of the case, we find that no fair and reasonable opportunity was allowed to the assessee. Therefore, the matter is restored back to the file of the AO to pass the order afresh. Needless to direct that, before passing the order afresh, the AO shall allow fair and reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in future in making timely compliance. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 6. In the result, appeal filed by the assessee is allowed for statistical purpose. Order was pronounced in open court on 17/09/2026. Sd/- Sd/- GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER