INCOME TAX OFFICER - 15(2)(1), MUMBAI, MUMBAI vs. KEVI CHEM COLOUR PVT. LTD., MUMBAI

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ITA 4084/MUM/2026Status: DisposedITAT Mumbai27 August 20263 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 allowed the Revenue's appeal without delving into the merits, citing the assessee's non-appearance and failure to file submissions. Liberty was granted to the assessee to seek recalling of the order.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order deleting an addition made under Section 68. The assessee failed to appear before the ITAT on multiple occasions despite adequate notice.

What were the issues?

Whether the CIT(A) erred in deleting the addition made under Section 68, and whether the assessee discharged its onus regarding the genuineness of the transaction and creditworthiness of the lender.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “E” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSIAN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.4084/MUM/2026 (AY: 2019) ITO – 15(2)(1), MUMBAI vs. KEVI CHEM COLOUR PVT. LTD. Room No. 204, 2nd Floor, Aaykar A/8, Avadhesh Nagar, Gulshan Gali, Bhavan, M K Road, Churchgate, B.P. Crossroad No. 2, Mulund (W), Mumbai-400020. Mumbai-400080. PAN/GIR No: AACCK5764E (Appellant) (Respondent) Assessee by None Revenue by Shri Sujatha Iyyanger (Sr. DR) Date of Hearing 25.08.2026 Date of Pronouncement 27.08.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the revenue emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the Commissioner of

Income Tax, Appeal, NFAC dated 10.02.2026 for the assessment year (AY) 2019.

2.

The grounds of appeal raised by the assessee are as under:

“1. On the facts and in the circumstances of the case and in law, the Revenue's appeal is maintainable notwithstanding that the tax effect is below the monetary limit prescribed in CBDT Circular No. 09/2024, as the case is squarely covered under the Exception Clause (h) of Para 3.1 of CBDT Circular No. 05/2024 dated 15.03.2024, due to the reason that addition is based on tax evasion through accommodation entries, which established the existence of an organized syndicate providing accommodation entries.

2.

On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 51,05,780/- made by the AO u/s 68 of the Act, without appreciating that the assessee failed to prove the creditworthiness of the lender and the genuineness of the

ITA No.4084/MUM/2026 Kevi Chem Colour Pvt. Ltd. transaction, especially when the lender was established to be a shell entity providing accommodation entries.

3.

The Ld. CIT(A) erred in holding that the assessee had discharged its onus merely by filing loan confirmations and bank statements, failing to recognize that in cases of accommodation entries, the mere routing of funds through banking channels does not establish the genuineness of a transaction or the financial capacity of the lender.

4.

The Ld. CIT(A) erred in law by ignoring the specific investigation findings and the statements of the directors of M/s Indian Infotech and Software Ltd., who admitted to the entity being a shell company, thereby passing an order that is contrary to the weight of evidence on record.

5.

The Ld. CIT(A) failed to appreciate that the addition was rightly taxed by the AO under the provisions of Section 115BBE of the Act, given the nature of the unexplained credit.

6.

The Appellant (Revenue) craves leave to add, amend, withdraw, or substitute any ground or grounds of appeal before or during the course of the hearing of the appeal.”

3.

The case was fixed for hearing on 11.08.2026; but, none appeared on

behalf of the assessee. The case was thereafter adjourned to 25.08.2026 for

hearing. However, none appeared before the Tribunal nor any request for

adjournment was filed. The appellant has also not filed any written submission

and corroborative details against the grounds of appeal raised by the revenue.

Therefore, no useful purpose will be served in prolonging the litigation. The

Hon’ble Bombay High Court in the case of Chemipol Vs. Union of India (Central

Excise Appeal No. 62 of 2009) has held that it is axiomatic that no Court or Tribunal

is supposed to continue proceedings before it when the party who has moved it

has not appeared nor cared to remain present. The dismissal, therefore, is an

ITA No.4084/MUM/2026 Kevi Chem Colour Pvt. Ltd. inherent power which every Tribunal possess. The Hon’ble High Court referred to

the decision of Hon’ble SC in the case of Nandramdas Dwarkadas, AIR 1958 MP

206 while deciding the case. It is now well settled that the Tribunal has the power

to decide the appeal if the assessee was not represented despite adequate and

reasonable opportunity of being heard granted to it. The assessee has not

controverted the grounds raised by the revenue by filing submission and

necessary details. Therefore, without delving into the merits of the case, the

appeal of the revenue is allowed. However, liberty is granted to the assessee to

seek recalling of this order by substantiating the reasons for non-compliance to

the notice issued to it.

4.

In the result appeal of the revenue is allowed.

Order is pronounced on 27.08.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Soumili; PS MUMBAI Date: 27.08.2026

Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

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