NISHIGANJ C.S. SHOP,,COOCHBEHAR vs. DCIT, CIRCLE 1(2), , JALPAIGURI

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.1459/KOL/2026 Assessment Year: 2022-23 Nishiganj C S Shop,………………….,................................................................Appellant Nishiganj Bazar, Nishiganj, Coochbehar, West Bengal- 736157 [PAN No. AAHFN2390K] Vs. DCIT, Circle 1(2), ..…………..…………………....…….................................….Respondent West Bengal- 735101 Appearances by: Sujit Basu, and Rajib Mukharjee, Advocate, appeared on behalf of the Appellant. Pradeep dung Dung, Sr. DRPradeep dung Dung, Sr. DR ,appeared on behalf of the Respondent. Date of concluding the hearing : July 15 , 2026 Date of pronouncing theorder :August 21 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 06.13.2026 of the National faceless appeal centre(NFAC) Delhi, passed under Section 143(3) of the Assessment Year 2022-23 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).

completed u/s 143(3) r.w.s 144B of the LI.T. Act, 1961 vide order dated 15.03.2024 at assessed income of Rs.66,62,059/.

Being aggrieved by and dissatisfied the assessee preferred appeal before us.

provisions of Section 41(1) as not at all applicable and provisions of Sections 56(2)(x) is not also applicable to the case of the assessee. The ld. AR has also submitted that the Ld. Assessing Officers ought not to have disallowed the business expanses on estimated basis without rejecting the books of the assessee.He placed reliance on the judgment passed by Delhi High Court in the case of PCIT VS Forum Sales Pvt. Ltd., reported in (2024) 160 taxmann. Com 93 (Del HC),.

Contrary to that Ld. DR supports the impugned order.

accounts of the assessee does not pertains to the year under consideration, AO was not justified in adding the amounts u/s 68 of the Act.

4.1. We further find that assessee has also submitted the audit statement of loan creditor for the year ending 31.03.2021 to 31.03.2022 showing the brought forward loan amount to Rs. 24,00,000/- hence provisions of section 41(1) is not applicable. The Madras High Court has held in the case of CIT vs. Southern Roadways Ltd. that even the amounts carried forward for years and even no details can be submitted by the assessee, the amount cannot be treated as a case of cessation of liability and tax the same u/s 41(1). The Delhi bench of ITAT has held in the case of Uttam Air Products (P) Ltd. vs. DCIT (2006) 99 TTJ (Del) 718 that tax cannot be charged u/s 41(1) on unmoved amount of creditors. It cannot be said that the Creditor has ceased to sustain the claim against the assessee unless it has given up its claim.

4.2. So far the other ground is concerned we noticed that the Ld. AO has assessed the assessee u/s 143(3) and not u/s 144 of the Act. The ld. AO did not reject the books of the assessee u/s 145(3) of the Act. Hence estimated disallowance of expenses of Rs. 113,459/-. according to us bad in law.The Hon’ble Supreme Court of India in case of Principal Commissioner of Income Tax vs.R.G. Buildwell Engineers Ltd. (2018) 99 taxmann.com 284 (SC) wherein it is held as under- 4 "Where High Court upheld order of Tribunal setting aside adhoc disallowance of expenses claimed on ground that assessee's books of account were not rejected, SLP filed against said order was to be dismissed. The Apex Court has held that "Section 37/1) of the income tax Act, 1961 Business expenditure Allowability of (Onus to prove) in course of assessment, assessee claimed deduction of expenses towards bricks, machinery repair, cartage, labour expenses etc. Assessing Officer disallowed to per cent of said expenses on ground that insufficient evidence was adduced Tribunal set aside said adhoc disallowance on two grounds, firstly, assessee's books of account were not reiected and secondly, such expenses were allowed consistently in post in scrutiny assessments High Court upheld order passed by Tribunal - Whether SLP filed against view taken by High Court was to be dismissed Held, yes [Para 2) [in favour of assessee)"

4.3. In a case of Blue Lotus developers vs. DCIT, ITA No.448/Agr/2025 dated 21.1.2026 (ITAT Agra). Has held that Ad-hoc disallowance of expenses without rejection of books is not valid. In ACIT vs. Merchant Agri Global (P) Ltd., ITA No. 1493/Mum/2023, dated 27.3.2024 it has been held thus-

Assessee had not furnished even the documentary proof for the expenses claimed under the heads friegt, transport, coolie and cartage, loading and 5

unloading etc. The assessee did not also submitted ledgers in relation to those expenditures. 10% expenditure disallowed. It has been held by ITAT that disallowances made in assessment were not valid since audited books of accounts of the assessee not rejected.

Your Honors are requested to deleted the estimated disallowance of Rs.1,13,459/-

In the result the appeal of the assessee is hereby allowed.

Kolkata, the 21st August , 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

DC Dated: 21 .08.2026.

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Deputy Registrar, Kolkata Benches