INCOME TAX OFFICER 14(3)(1), MUMBAI vs. SUPREME REALITY PRIVATE LIMITED, MUMBAI

PDF · subscribers
ITA 7133/MUM/2025Status: DisposedITAT Mumbai30 July 2026AY 2011-124 pages

In favour of the Revenue: the Revenue'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) erred in allowing relief without proper verification of evidence, especially when the assessee failed to substantiate claims even during remand. The CIT(A)'s order was set aside, and the AO's additions were restored.

What were the facts?

The assessee failed to provide necessary documentation during assessment proceedings, leading to additions by the AO. The CIT(A) admitted additional evidence and granted relief, despite the assessee's continued failure to substantiate claims during remand proceedings.

What were the issues?

Whether the CIT(A) erred in admitting additional evidence and deleting additions without proper verification, and whether the assessee discharged its onus of proof for cash credits, sundry creditors, and expenses.

Which sections of the Income-tax Act were involved?

Section 68,Section 41(1),Section 36(1)(i),Section 37(1)

AI-generated summary — verify with the full judgment below

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by revenue is directed against the separate orders of ld. CIT(E) both dated 02.09.2025 for AY 2011. The revenue has raised following grounds of appeal: “1. Whether, on the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in deleting the addition of made by the AO under Section 68 of the Income Tax Act, 1961, by wrongly admitting and relying upon additional evidence for the first time at the appellate stage, which resulted in the deletion of the addition despite the assessee's failure to discharge the primary onus of proving the identity, creditworthiness, and genuineness of the cash credit during the assessment proceedings. 2. Whether, on the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in deleting the addition of (25% of Sundry Creditors) made by the AO under Section 41(1) of the Act, by improperly admitting and relying upon additional evidence (breakup and challans) without satisfying the mandatory requirements of Rule 46A, thereby setting aside a reasonable addition made by the AO due to the assessee's non-cooperation and failure to substantiate the genuineness and subsistence of the liabilities. 3. Whether, on the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in law and on facts in deleting the disallowance of expenses amounting to by wrongly admitting and relying upon fresh evidence at the appellate stage in violation of Rule 46A. The deletion is erroneous as the assessee failed to furnish any material during the assessment to establish the genuineness of the expenses or to prove that they were incurred wholly and exclusively for the purpose of business, thereby failing to satisfy the requirements of Section 36(1)(i) and Section 37(1) of the Act.”

2.

None, appeared on behalf of the assessee despite service of notice of appeal on more than two occasions, hence we left no option except to decide the appeal on the basis of material available on record. The ld. CIT-DR for the revenue submits that assessment was completed under section 144. The assessee made no compliance despite allowing sufficient opportunity by AO. The AO made disallowance on various expenses and addition on account of sundry creditors and addition under section 68. Before ld. CIT(A), the assessee filed additional / fresh evidence. On filing such fresh evidences, the ld CIT(A) called remand report from AO. During the remand proceedings the assessee failed to furnish sufficient verifiable evidence before AO either on sundry creditors or about various expenses. The assessee also failed to substantiate identity, creditworthiness and genuineness of share application money. The ld. CIT(A) allowed relief to the assessee on share application as well as on sundry creditors and disallowance of expenses without allowing opportunity to the AO. The ld. CIT(A) allow relief to the assessee without even verifying any evidence in support of various claim. 2

3.

We have considered the submissions of ld. CIT-DR and material available on record. We find that assessee was completed under section 144. Before ld. CIT(A), the assessee filed fresh evidence with regard to share application money, sundry creditors as well as on disallowance of various expenses. The ld. CIT(A) remanded evidences and submission of assessee to the AO for his remand report. We find that again before AO, the assessee failed to substantiate various claims. Despite the fact that assessee has not substantiated various evidences for verification of AO, the ld CIT(A) still allowed relief to the assessee. Allowing relief to assessee without verification of various claims is not justified. Thus, the order of ld. CIT(A) is set aside and that of various additions in the additions in assessment order including the addition under section 68 disallowance of sundry creditors and various other expenses are restored. In the result, grounds of appeal raised by revenue are allowed. 4. In the result, the appeal of the revenue is allowed. Order was pronounced in the open Court on 30/07/2026. /- /- Sd/- /- Sd/- Sd/- OM PRAKASH KANT PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 30/07/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →