ROUT INFRASTRUCTURE PRIVATE LIMITED,PO- GATIROUTPATNA, BIRIBATI vs. DCIT, CENTRAL CIRCLE, CUTTACK, AYAKAR BHAWAN, SELTER CHOUK, TULSIPUR, CUTTACK

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ITA 439/CTK/2024Status: DisposedITAT Cuttack26 May 2026AY 2019-206 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete additions, finding that the revenue failed to dislodge the evidence presented during remand. However, the assessee's appeal regarding disallowances under Section 40A(3) was dismissed due to lack of proven business exigency.

What were the facts?

The assessee did not produce evidence before the Assessing Officer due to the Covid period, leading to an ex-parte assessment. The CIT(A) called for a remand report after the assessee produced evidence, granting substantial relief.

What were the issues?

Whether the CIT(A) was justified in admitting evidence not produced before the AO and granting relief, and whether disallowances under Section 40A(3) were warranted.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “HYBRID COURT AT CUTTACK”

Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR

For Appellant: Shri P. K. Mishra, AR
For Respondent: Shri Ashim Kr. Chakraborthy, CIT-DR
Hearing: 26.05.2026Pronounced: 26.05.2026

Heard together (2 matters)

C.O. No.1/CTK/2025
ITA No.419/CTK/2024

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL “HYBRID COURT AT CUTTACK” BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA No.419/CTK/2024 Assessment Year: 2019-20 ACIT, Central Circle, Rout Infrastructure Pvt. Cuttack Ltd. Vs Gatiroutpatana, Biribati, Cuttack, Odisha-754100. (PAN: AAECR1406J) (Appellant) (Respondent)

C.O. No.1/CTK/2025 (in ITA No.419/CTK/2024) Assessment Year: 2019-20 Rout Infrastructure Pvt. Ltd. ACIT, Central Circle, Cuttack Vs Gatiroutpatana, Biribati, Cuttack, Odisha-754100. (PAN: AAECR1406J) (Appellant) (Respondent)

ITA No.439/CTK/2024 Assessment Year: 2019-20 Rout Infrastructure Pvt. Ltd. ACIT, Central Circle, Cuttack Vs Gatiroutpatana, Biribati, Cuttack, Odisha-754100. (PAN: AAECR1406J) (Appellant) (Respondent)

Assessee by : Shri P. K. Mishra, AR Revenue by : Shri Ashim Kr. Chakraborthy, CIT-DR

ITA No.419&439/CTK/2024 & CO 1/CTK/25 Date of Hearing : 26.05.2026 Date of Pronouncement : 26.05.2026

ORDER PER BENCH: ITA No.419/CTK/2024 is an appeal filed by revenue and ITA No.439/CTK/2024 is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Bhubaneswar [hereinafter referred to as the ‘CIT(A)’] in appeal no.CIT(A), Bhubaneswar- 2/10592/2018-19 dated 14.08.2024 and CO No.1/CTK/2025 is a cross- objection filed by the assessee in the appeal filed by the assessee in ITA No.419/CTK/2024.

2.

Shri P. K. Mishra, AR represented on behalf of the assessee and Shri Ashim Kr. Chakraborthy, CIT-DR represented on behalf of the revenue.

3.

It was submitted by the ld. CIT-DR that the assessee has not produced any evidences before the Assessing Officer. It was submitted by the ld. AR that the assessment was done during Covid period, therefore, the evidences could not be produced. It was then submitted by the ld. DR that the ld. CIT(A) admittedly called for a remand report but has not extracted the remand report nor the findings of the Assessing Officer in the remand report and has further given additional relief over and above what has been granted by the Assessing Officer in the remand report. It was the submission that the issues in this appeal may be restored to the

ITA No.419&439/CTK/2024 & CO 1/CTK/25 file of the Assessing Officer for verification in so far as the evidences have not been produced by the assessee before the Assessing Officer.

4.

In reply, the ld. AR drew our attention to para 9.3 of the order of the ld. CIT(A) to submit that a detailed remand report was called for in so far as the assessee has produced all the evidences before the Assessing Officer. It was further submitted that after considering the remand report, it was found that only as per the remand report, an amount of Rs.65,58,578/- out of the addition as made by the Assessing Officer to an extent of Rs.12,63,22,915/- was to be considered. It was the submission that in para 9.6, the ld. CIT(A) has considered the said amount of Rs.65,58,578/- and has found from the bank account of the assessee that these were encashment of FDRs. It was the submission that this resulted in the addition being reduced to Rs.5,94,893/-. It was the submission that the assessee has not challenged this addition of Rs.5,94,893/-. It was further submitted that the balance addition representing the liabilities shown in the balance sheet, the ld. CIT(A) in paras 10.03.1.1 to 10.3.1.2 has considered all the facts and found that this amount did not relate to the impugned assessment year but related to earlier assessment year and consequently deleted the addition and only an amount of Rs.2,01,56,405/- related to GST output liabilities for the impugned assessment year and it was found that this liability was liquidated in the financial year 2020-21 relevant to assessment year 2021-22 and the entire sum has been paid and reported in Form GSTR-09 submitted to GST

ITA No.419&439/CTK/2024 & CO 1/CTK/25 authorities. It was the submission that the ld. CIT(A) deleted the additions. It was further submitted by the ld. AR that the addition in respect of bad debts and other minor additions have been considered by the ld. CIT(A) in paras 11 to 11.5. It was the submission that there have been minor confirmations of additions which have been accepted by the assessee. It was further submitted that the additions challenged by the assessee is in regard to the additions made u/s 40A(3) of the Act. These were the additions made on the basis of some evidences found in the course of survey conducted on the assessee on 12.02.2019 in regard to certain expenditures. It was the submission that these expenditures were required to be incurred at the site and therefore, the provisions of section 40A(3) should not be applied to the case of the assessee. It was the submission that the payments in excess of the specified amount have been made only because of business exigencies. It was prayed that the additions made u/s 40A(3) may be deleted. It was further submitted by the ld. AR that the cross-objection filed by the assessee is in support of order of the ld. CIT(A) to the extent that the ld. CIT(A) had deleted the additions. It was the submission that the order of the ld. CIT(A) to the extent of that the assessee has been given relief should be sustained and the claim of the assessee in regard to disallowance confirmed by the ld. CIT(A) under the provisions of section 40A(3) be deleted.

5.

We have considered the rival contentions. A perusal of the facts in the present case clearly shows that the assessee has not produced

ITA No.419&439/CTK/2024 & CO 1/CTK/25 evidences before the Assessing Officer. This has resulted in ex parte assessment before the Assessing Officer. The assessee has admittedly produced all the evidences before the ld. CIT(A) and the ld. CIT(A) has found that the assessee was prevented by sufficient cause for not producing the evidences before the Assessing Officer. The ld. CIT(A) has admitted such evidences and called for remand report from the Assessing Officer. The ld. CIT(A) after considering the remand report has given substantial relief to the assessee. The revenue has not able to dislodge any evidence as arrived by the ld. CIT(A) and the revenue’s main stand is that the evidences were not produced before the Assessing Officer. This would not stand to reason in so far as remand report had been called for and the details were very much available to the Assessing Officer in the course of remand proceedings. This being so, we are of the view that the additions as deleted by the ld. CIT(A) are on the right footing and do not call for any interference. Consequently, the appeal filed by the revenue stands dismissed.

5.1 Coming to the appeal filed by the assessee, as it is noticed that the assessee has claimed that the payments were made under extraordinary circumstances and it was on account of business exigency, but the assessee has not been shown business exigency. This being so, the addition as made by the Assessing Officer and confirmed by the ld. CIT(A) by invoking section 40A(3) is liable to be upheld and we do so. The appeal filed by the assessee stands dismissed.

ITA No.419&439/CTK/2024 & CO 1/CTK/25 5.2 Coming to cross-objection filed by the assessee in respect to order of the ld. CIT(A) deleting the additions, as we have already upheld the order of the ld. CIT(A) deleting the additions, the cross-objection filed by the assessee is no more survive and is dismissed as infructuous.

6.

In the result, ITA No.419/CTK/2024 filed by revenue and ITA No.439/CTK/2024 filed by the assessee are dismissed and CO No.1/CTK/2025 filed by the assessee is also dismissed as infructuous.

Cuttack, the 26th May, 2026. Sd/- Sd/- [Rajesh Kumar] [George Mathan] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member

Dated: 26.05.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar

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