SHARMA STONES (MUMBAI) PRIVATE LIMITED,MUMBAI vs. ACIT, CENTRAL CIRCLE 8(2), MUMBAI, MUMBAI

Both the appeals under consideration are having almost similar issues and therefore, for the sake of brevity, the same are heard together and disposed of by this composite order by taking into consideration ITA No.1795/M/2026 as a lead case and the result of the same would apply mutatis mutandis to both the appeals.

Coming to ITA No. 1795/M/2026, it is observed that the AO vide assessment order dated 21.04.2021 under Section 253 C of the Act has made the addition of Rs.84,92,796/- being disallowance of interest capitalization pertaining to the year under consideration.

The Assessee thus, being aggrieved has preferred first appeal before the ld. Commissioner, however, despite affording various opportunities, the Assessee made no effective compliance and at last, sought for adjournment/further time by claiming as under:- “We are in process of obtaining certain documents from Central Circle (Mumbai). Kindly allow us two months’ time for the same.”

Admittedly, the Assessee except making the submissions as made and contained in the statements of facts, made no further written submission on the merits of the case and therefore, in the constrained circumstances, the ld. commissioner affirmed the validity of the assessment, framed under Section 153C of the Act and the addition made by the AO on account of “interest capitalized”.

We have given thoughtful consideration to the peculiar facts and circumstances. It is not in controversy that the ld. Commissioner before deciding the appeal of the Assessee has given ample opportunities, however, the Assessee as submitted before us did not have sufficient material and therefore, failed to file written submission on the merits of the case. Further, it is also a fact that in the absence of relevant submissions and documents, the issue also remains to be examined in its right perspective and proper manner.

Thus, considering the peculiar facts and circumstances in totality, we are of the considered view that substantial justice would be met by affording one last and final opportunity to the Assessee to substantiate its claim, however, subject to deposit of Rs.11,000/- in the Revenue Department under ‘other heads’ within 30 days of this order. Thus, the case is accordingly remanded to the file of the ld. Commissioner for decision afresh, suffice it to say by affording reasonable opportunity of being heard to the Assessee, in the above terms.

We clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency.

Resultantly, the appeal under consideration i.e. ITA No. 1795/M/2026 is allowed for statistical purposes.

In view of our judgment in ITA No.1795/M/2026, both appeals are allowed for statistical purposes, in the above terms.