KILIMANJARO AGRO ENTERPRISES PRIVATE LIMITED,CHENNAI vs. THE DEPUTY COMMISSIONER OF INCOME TAX CORPORATE CIRCLE-1(1), CHENNAI, CHENNAI

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ITA 3043/CHNY/2025Status: DisposedITAT Chennai16 July 2026AY 2018-20193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the file of the AO for de-novo assessment, granting the assessee a proper opportunity of being heard. This was subject to a cost of Rs. 15,000/- to be deposited with the Tamilnadu State Legal Services Authority.

What were the facts?

The assessee's appeal was dismissed ex-parte by the CIT(A) after the AO made an addition of Rs. 8,92,98,965/- for unexplained increase in equity and liabilities. The assessee failed to participate in the proceedings before the AO and CIT(A).

What were the issues?

Whether the addition of alleged increase in equity and liabilities as unexplained cash credits was justified, and whether the assessee was denied natural justice due to non-participation in proceedings.

Which sections of the Income-tax Act were involved?

Section 68,Section 144,Section 143(3A),Section 143(3B)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 18.06.2026Pronounced: 16.07.2026

आयकर अपीलीय अधिकरण ‘सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री एबी टी. वर्की, न्याययक सदस्य एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 3043/Chny/2025 ननिाारण वर्ा /Assessment Years: 2018-19 Kilimanjaro Agro Enterprises Private v. The Deputy Commissioner of Limited, Income Tax, No.9/5, First Street, Nandanam Extension, Corporate Circle-1(1), Nandanam, Chennai-600 035. Chennai. [PAN: AACCK4114A] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. Murugaboopathy, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. Chilaka Marthi Vijay Raju, Addl. CIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 18.06.2026 घोषणाकीतारीख /Date of Pronouncement : 16.07.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’) dated 14.08.2025, for the Assessment Year (hereinafter referred as the ‘AY’) 2018-19.

GROUNDS OF APPEAL 1. The ex-parte order passed by the learned CIT Appeals NFAC is contrary to law, facts and against the principles of natural justice. 2. The Ld. CIT (A) / NFAC erred in confirming the addition of alleged increase in equity & liabilities as unexplained cash credits u/s.68 of the Act.

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ITA No.3043/Chny/2026 (2018-19) Kilimanjaro Agro Enterprises Pvt. Ltd. 3. The Ld. CIT (A) / NFAC failed to appreciate that there is no actual increase in liabilities only a journal entry is passed by increasing the liability and the value of the assets without inflow of loan.

4.

The appellant submits that as per ledger extracts and journal entry vouchers the increase in liabilities was merely a reclassification of assets/liabilities without cash inflow.

5.

It is submitted that appellant could not submit response to notice due to the reason-The appellant company's associate company is St. John Freight Systems Ltd was under liquidation & finally taken over by another company as per NCLT order dt.19.01.2023. The staff Mr. Mookandi who looked after the accounts of the associate company only maintained the accounts of the appellant company. He left the service and joined another company. The email id of the company was maintained by him. So, notice was unnoticed and there was no response. It is beyond control & knowledge of the appellant.

6.

The Appellant humbly prays for one more opportunity to provide all the details to prove that the increase in liabilities represents mere reclassification of assets/liabilities without cash inflow.

7.

The Appellant craves leave to add to, alter, amend or withdraw any of the above grounds of appeal and to file such further or additional evidence and submissions as may be considered necessary during the course of appellate proceedings.

2.

The brief facts of the case are that the assessee company filed its return of income declaring total loss at Rs. (-) 2,960/-. The case of the assessee was selected for scrutiny on the issue of “Business Loss”. As per para 2.1 of the assessment order various opportunities were given to the assessee for participation in the proceedings, but the assessee never came forward. Ultimately, the case of the assessee was assessed ex-parte u/s. 144 r.w.s. 143(3A) and 143(3B) of the Act after making addition of Rs. 8,92,98,965/- being increase in the equity and liabilities while comparing previous year’s balance-sheet and Rs. 2,960/- claimed as rates and taxes on account of missing evidences. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee, as again the assessee had not participated in the proceedings. Now, the assessee again aggrieved with the same preferred the present appeal before us.

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ITA No.3043/Chny/2026 (2018-19) Kilimanjaro Agro Enterprises Pvt. Ltd. 3. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken before us. It is observed that the assessee never shown its willingness to pursue the matter before any forum including before us also, as the assessee itself applied for adjournment thrice before us and twice none appeared on behalf of the assessee. Certainly, it raises a question mark on the intentions and seriousness of the assessee, still as a matter of applying principle of substantive assessment, we deem it fit to restore the matter back to the file of the AO for de-novo assessment after giving the assessee a proper opportunity of being heard and the assessee is directed to participate in the proceedings with a vigilant and cooperative attitude without any delay and seeking adjournment. This attitude of the assessee can’t be appreciated and this another opportunity is subject to a cost of Rs. 15,000/- to be deposited with the Tamilnadu State Legal Services Authority within 15 days of receiving this order and the receipt of the same to be produced before the registry for verification.

4.

In the result, the appeal of the assessee is allowed for statistical purposes in above terms and observations.

Order pronounced on the 16th day of July, 2026, in Chennai.

Sd/- Sd/- (एबी टी. वर्की) (गगन गोयल) (ABY T. VARKEY) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 16th July, 2026. KB आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR Digitally signed 5. गार्ड फाईल/GF K BABU by K BABU Date: 2026.08.13 10:04:31 +05'30'

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