INFINITY ENTERPRISE,AHMEDABAD vs. INCOME TAX OFFICER, WARD-2(1)(2), AHMEDABAD, AHMEDABAD

The assessee has raised following grounds of appeal:- “1.1 The order passed u/s 250 dated 11.09.2025 for Assessment Year 2013- 14 by LD. CIT(A)-NFAC, Delhi dismissing the appeal and upholding the addition/ disallowance of Rs.7,78,120 (erroneously upheld Rs.53,64,500) under is wholly illegal, unlawful and against the principles of natural justice.

2 That in the facts and in the law, the Ld. LD. CIT(A) has failed to appreciate that granting opportunity of video conferencing is mandatory in the newly introduced faceless appeal proceedings. It is therefore prayed that the addition/ disallowance of Rs.7,78,120/-made by Ld. AO and upheld by the LD. CIT(A) may please be deleted in the interest of natural justice considering the facts and circumstances of the case.”

The brief facts of the case are that the assessee is a partnership firm engaged in business activities. The appellant filed its original return of income for Assessment Year 2013-14 on 31.03.2015 declaring a total income of ₹2,70,570/-. The appellant has been regularly filing its returns of income, maintaining proper books of account and carrying on its business in accordance with the provisions of the Income-tax Act, 1961. Subsequently, the assessment was reopened under section 147 of the Act pursuant to a notice dated 20.03.2020 on the basis of information allegedly received from the Assistant - 3– Commissioner of Income-tax, Central Circle-2(4), Ahmedabad. According to the Assessing Officer, the appellant had received an accommodation entry amounting to ₹7,78,120/- from M/s Aayurshi Infra Projects Private Limited, which was alleged to be a shell company engaged in providing bogus accommodation entries. During the course of the reassessment proceedings, the appellant furnished detailed written submissions explaining that the transaction in question represented Land Development and Clearance Expenses amounting to ₹7,94,000/- (gross), on which tax of ₹15,880/- had been duly deducted at source under section 194C of the Act. In support of its claim, the appellant produced documentary evidence including Form No. 16A evidencing deduction and deposit of tax at source, ledger accounts for the financial year 2011-12, bank statements showing issuance of the cheque on 31.03.2012 and its clearance on 09.06.2012, and the return of income for Assessment Year 2012-13 wherein the said expenditure had been duly claimed. The assessee consistently contended that the impugned transaction pertained to Assessment Year 2012-13, since the expenditure had been incurred and accounted for during the financial year 2011-12. It was further submitted that the subsequent encashment of the cheque by the payee in June 2012 did not alter the year of allowability of the expenditure in view of the settled principles of accounting and law. The Assessing Officer, however, rejected the explanation furnished by the appellant and proceeded to rely solely upon the information received from the Investigation Wing without making any independent enquiry or application of mind. The Assessing Officer treated the amount of ₹7,78,120/- as unexplained investment under section 69 of the Income-tax Act, 1961, determining the total assessed income at ₹10,48,690/-.

On perusal of the records, it is observed that the assessee was afforded several opportunities of hearing on 26.08.2024, 20.05.2025, and 02.06.2025 to furnish details, clarifications and explanations to substantiate the source of unexplained investment under section 69 of the Act. However, despite being granted multiple opportunities, the assessee remained non-compliant and failed - 4– to furnish the requisite details or explanations before the Ld. CIT(A). Consequently, the Ld. CIT(A), based on the material available on record, upheld the action of the Assessing Officer and dismissed the appeal of the assessee. Before us, Ld. Counsel for the assessee prayed that, given an opportunity, due compliances will be made and all the details/clarification/explanation would be provided to the revenue authorities. Hence, in the interest of justice, the matter is remanded to the Ld.CIT(A) for de novo adjudication. The assessee shall submit all relevant bank statements and supporting documents before the Ld. CIT(A) and shall comply with the notices issued by the Revenue authorities without seeking unnecessary adjournments.

In the result, the appeal of the assessee is allowed for statistical purposes.

""थ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT 4. आयकरआयु"(अपील) /The CIT(A)- 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड"फाईल /Guard file. आदेशानुसार/ BY ORDER,सहायकपंजीकार (Dy./Asstt.