STAR RICE LAND PVT LTD,AGGARWAL CORPORATE HEIGHTS, NETAJI SUBHASH PLACE vs. ASSESSING OFFICER, DC/ACIT CENT FARIDA

That the learned CIT (A)-3, Gurgaon has erred both in law and on facts in dismissing the appeal of the assessee filed against the order passed by the learned Dy. Commissioner of Income Tax, Central Circle-II, Faridabad (A.O) dated 31/12/2019 under Section 143(3) as the learned CIT (A) sustained the addition of Rs.2,08,80,896/- made by the A.O on account of arbitrarily enhancing gross profit margin from 10% as declared by the appellant to 11% and sustaining the rejection of books by the A.O u/s 145(3) in complete disregard of the facts and documents produced by the appellant in its submissions in response to the hearing notices issued by the learned CIT (A) 2. That the learned CIT (A)-3, Gurgaon has also erred both in law and on facts in dismissing the appeal of the assessee filed against the order passed by the learned A.O dated 31/12/2019 under Section 143(3) as the learned CIT (A) sustained addition of Rs.49,50,000/- made by the learned A.O u/s 36(1)(iii) for disallowance of interest on advances alleging the same to be non-business in nature in complete disregard of the facts and documents produced by the appellant in its submissions in response to the hearing notices issued by the learned CIT (A). 3. That the learned CIT (A)-3, Gurgaon has erred both in law and on facts in deciding the appeal no. 10299/CIT(A)- 3/GGN/2019-20 on ex-parte basis vide his order bearing DIN: ITBA/APL/M/250/2025-26/1081934399(1) dated 22/10/2025 passed u/s 250 (6) alleging non-compliances to the various hearing opportunities given to the appellant and also not substantiating the grounds of appeal taken despite the fact that the written submissions were made by the appellant, on 28 July,25 vide acknowledgement bearing no: 476880481280725 and on 16 September,25 vide acknowledgement bearing no: 648411941160925 attaching therewith all the necessary evidences, in response to the hearing notices issued by the learned CIT (A)

The appellant assessee through the above grounds of appeal is contesting an addition of Rs.2,58,30,896/- made by the ld. Assessing Officer by enhancing the GP rate from 10 to 11% and addition on account of disallowance of interest u/s 36(1)(iii) of the Act. As per brief factual matrix of the case, the assessee had filed its Return of Income on 28.09.2016 declaring income of Rs.1,36,47,310/-. The ld. Assessing Officer noting discrepancies in the assessee’s accounts, rejected the books of accounts and proceeded to make GP addition of 11% as against 10% disclosed by the assessee. The impugned 1% disturbance contributed to an addition of Rs.2,08,80,896/-. The Ld. Assessing Officer further made an addition of Rs.49,50,000/- u/s 36(1)(iii) by applying a notional interest of 9% on the advances of Rs.5,50,00,000/-. The ld. First Appellate Authority recorded in para- 3 and para-6 of his order non-compliance of the assessee to its statutory notices and proceeded to confirm the additions made by the ld. Assessing Officer ex- parte. 4. The ld. Counsel for the assessee vehemently argued that the conclusion drawn by ld. CIT(A) of appellant’s non-compliance to his statutory notices is totally wrong. It was argued that the appellant had submitted detailed documents to the ld. CIT(A). In support of its contentions, the appellant has filed a voluminous paper book. Thus, at page no.1029 to 1031, it has placed e- acknowledgment of communication addressed to ld. CIT(A) during the appellate proceedings. It was contended that the impugned documents have escaped attention of Ld. First Appellate Authority leading to his ex-parte order. 5. The ld. Sr. DR placed reliance upon the orders of the lower authorities. 6. We have heard rival submissions in the light of material placed on record. We have noted that ld. CIT(A) has drawn his conclusion by recording non- compliance of assessee to his statutory notices. We have however also noted that there is enough strength in the argument of appellant assessee that the documents and evidences were indeed filed by the assessee before the ld. CIT(A). Thus, it is a clear case of omission on part of Ld. First Appellate Authority to consider details and evidences filed by appellant during the course of appellate proceedings before him. Be that as it may be in the interest of justice, we deem it appropriate to remit the matter to the file of the ld. CIT(A) for re-adjudication de novo. Accordingly, we set-aside the order of the ld. CIT(A) and direct him to re-adjudicate the matter de novo in accordance with law and by passing a speaking order. It shall be bounden upon the ld. CIT(A) to give due opportunity of being heard to the assessee. The assessee shall comply with all the statutory notice and any non- compliance shall be adversely viewed. The assessee shall be at liberty to place before the ld. First Appellate Authority all or any other evidence deemed appropriate to defend its case. The appeal of the assessee is allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 15th July, 2026.

Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,