VELJI DOSABHAI AND SONS PVT LTD,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, MUMBAI

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ITA 8446/MUM/2025Status: DisposedITAT Mumbai05 June 2026AY 2022-235 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, in the interest of justice and natural justice, decided to give the assessee one more opportunity to present its case before the CIT(A). The issues were remanded back for denovo adjudication.

What were the facts?

The assessee appealed against additions made by the AO and upheld by the CIT(A) regarding negative cash balance and professional fees. The assessee failed to appear before the CIT(A) despite multiple opportunities.

What were the issues?

Whether the assessee should be granted another opportunity to present its case before the appellate authority after failing to appear earlier. The merits of the additions regarding negative cash balance and professional fees were not decided.

Which sections of the Income-tax Act were involved?

Section 69C,Section 69A,Section 139(1),Section 143(2),Section 142(1),Section 143(3),Section 144B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “K (SMC

THE INCOME TAX APPELLATE TRIBUNAL “K (SMC)” BENCH MUMBAI SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER & MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER

ITA NO. 8446/Mum/2025 (A.Y.2022-23) VeljiDosabhai And Sons Pvt. Assistant Commissioner of Ltd.9, Mahesh Chambers, 391 Income Tax, Ward 8(3) (1), Narsi Natha Street, Katha Aayakar Bhawan, Mumbai, Bazaar,Masjid Bunder, Mumbai, v/s Maharashtra Maharashtra PAN: AAACV8475H Appellant Respondent Assessee by Sh. Satish Mody Department by Sh. Bhagirath Ramawat, Sr. DR Date of Hearing 30-03-2026 Date of Pronouncement 05-06-2026

ORDER PER KAVITHA RAJAGOPAL :- This appeal is filed by the assessee, challenging the order of the Learned

Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], National Faceless Appeal

Centre (“NFAC” for short)passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'),

pertaining to the Assessment Year (‘A.Y.’ for short) 2022-23.

2.

The assessee has raised the following grounds of appeal:

“1. Learned A.O./CIT(A) has erred in making addition of Rs.7,47,526/- as negative cash balance u/s 69C.

2.

Learned A.O./CIT(A) has failed to appreciate that companies consolidated cash balance in the Books and Books are 2 maintained at Head Office. The Balance in individual branch is not relevant as expense

2 ITA No. 8446/mum/ 2025 VeljiDosabhai& Sons Pvt. ltd. are incurred out of Central Zen pore and there is no negative cash balance as per cash book maintained.

3.

Learned A.O. / CIT(A) has erred in not allowing genuine 3 professional fees at Rs.30,00,000/- paid to Pinnacle Fund Mart LLP for availing loan from ICICI Bank.

4.

Learned A.O. / CIT(A) has failed to appreciate that change in Banks were required due to savings in interest rate & operational convenience.

5.

Looking at the about facts your appellant prays your honor to kindly DLEETE the addition made by A.O. / CIT(A) and accept the return of Income filed by appellant.

6.

Your appellant craves the leave to add to alter to OR to amend the grounds of appeal from time to time.

7.

Learned A.O. / CIT (A) has erred in making addition of negative cash balance of Rs.7,47,526/- u/s 69A of Income Tax Act, 1961 for disallowing genuine business expenses of 7 Rs.30,00,000/- paid to Pinnacle Fund Mart LLP against the principle of equity & natural Justice and stated position of Law. Order passed by Learned A.O. / CIT (A) is bad in Law and void ab initio.”

3.

Brief facts of the case are that, the assessee is a Government notified Customs

House Agent engaged in providing services related to Customs activities such as

Clearing, Forwarding and International Freight Forwarding to its Customers and

arranging activities such as filing of Shipping Bills, the Shipping / Air Freight rates and

book the space with respective Shipping /Airlines along with various other allied

services. The Assessee filed its return of income u/s 139(1) of the Act in ITR 6 dated

31/10/2022 declaring total income at Rs. NIL under the normal provisions and book

3 ITA No. 8446/mum/ 2025 VeljiDosabhai& Sons Pvt. ltd. profit u/s 115JB at Rs. 26,62,442/- for the year under consideration. The assessee’s case

was selected for scrutiny through CASS for the following reason:

“1. Assessee has shown high liabilities in balance sheet as compared to low income / receipt declared in ITR. 2. The assessee has claimed substantial amount of refund. 3. Assessee has made substantial purchases from such suppliers who have filed non-business ITR or reflected a substantially lower turnover in ITR as compared to turnover shown in GSTR 1 return.”

4.

The Ld. AO issued notice u/s 143(2) and 142(1) of the Act which was duly issued

to serve upon the assessee. After duly considering the assessee’s submissions, the Ld.

AO passed the assessment order dated 26/03/2024 u/s 143(3) r.w. Section 144B of the

Act determining total income at Rs. 37,47,526/-, after making additions towards

unexplained money u/s 69A of the Act amounting to Rs. 7,47,526/- and towards

professional feesunder the head “business and profession” amounting to Rs. 30,00,000/-

on the ground that the Assessee has failed to substantiate the addition made with cogent

documentary evidences.

5.

Aggrieved, the assessee was in appeal before the first appellate authority who vide

an ex-parte order dated 27/10/2025 upheld the addition made by the Ld. AO on the

ground that the Assessee had failed to comply with the proceeding before the Ld. CIT(A)

in spite of various opportunities given.

6.

Aggrieved, the assessee is in appeal before us, challenging the order of the Ld.

CIT(A) on the above-mentioned grounds.

4 ITA No. 8446/mum/ 2025 VeljiDosabhai& Sons Pvt. ltd. 7. We have heard the rival submissions and perused the materials available on record. It

is observed that the Ld. CIT(A) had issued notices on 26/05/2025, 31/07/2025,

07/08/2025 and 12/09/2025 for which there was no compliance by the assessee. The Ld.

CIT(A) then proceeded to pass the impugned order upholding the additions made by the

Ld. AO. Before us, the Ld. Authorized Representative (in short “Ld. AR”) for the

assessee contended that the assessee be given one more opportunity to present its case

before the first appellate authority for the reason that the assessee has a good case on the

merits and that the assessee had given reasons for its non-compliance before the Ld.

CIT(A).

8.

The Ld. Departmental Representative (in short “Ld. DR) for the Revenue opposed

to setting aside the issue to the file of the Ld. AO for the reason that the assessee

wasgiven sufficient opportunity but was not complied with.

9.

In the above factual matrix of the case, we deem it fit to extend the Assessee with

one more opportunity to present its case before the Ld. CIT(A), by adhering to the

principles of natural justice and in the interest of justice dispensation. We therefore,

remand all these issues back to the file of the Ld. CIT(A) for denovo adjudication with a

direction that the assessee shall comply with the proceeding before the first appellate

authority without any undue delay from its side. The Ld. CIT(A) is also directed to

decide the issue on the merits of the case and in accordance with law, after duly

considering the submission of the assessee. Hence, the grounds of appeal raised by the

assessee are hereby allowed for statistical purpose.

5 ITA No. 8446/mum/ 2025 VeljiDosabhai& Sons Pvt. ltd.

10.

In the result, the appeal filed by the assessee is allowed for statistical purpose.

The following order is pronounced on 05/ 06/2026 as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963.

Sd/- Sd/- (VIKRAM SINGH YADAV) (KAVITHA RAJAGOPAL) ACCOUNTNANT MEMBER JUDICIAL MEMBER Mumbai: Dated: 05/06/2026 R. Naheed, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. Dr, ITAT, Mumbai 5. Guard File. BY ORDER, //True COPY// (Assistant Registrar) ITAT, Mumbai

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