CLASSIC INTERNATIONAL,KOLKATA vs. I.T.O., WARD - 29(1), KOLKATA

ITA 2610/KOL/2026Status: DisposedITAT Kolkata29 September 2026AY 2020-202113 pages
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What were the facts?

The assessee, Classic International, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the Commissioner of Income Tax (Appeals) (NFAC), Delhi, for Assessment Year 2020-21. The original assessment order was passed by the Assessment Unit under sections 147, 144, and 144B of the Income Tax Act, 1961. The Assessing Officer (AO) determined the total income at ₹38,94,872/-, making additions of ₹13,92,000/- for unexplained payments to contractors, ₹11,36,387/- for increased sundry creditors, and ₹13,66,485/- for increased other payables. The assessee had initially declared a loss of ₹7,39,725/- in response to a notice under section 148. The CIT(A) upheld the reopening and the additions, noting the assessee's failure to provide complete and verifiable evidence during assessment proceedings and that explanations in appeal were unsupported. The assessee's appeal to the ITAT followed.

What did the Tribunal hold?

The Tribunal noted that the assessee's primary contention was that documents were lost due to the Amphan cyclone, and while some documents were subsequently obtained and filed before the CIT(A), they were not admitted. The assessee requested a remand to the AO for a fresh assessment. The Revenue relied on the CIT(A)'s order, arguing that the assessee failed to furnish required evidence before both authorities. The Tribunal, considering the interest of justice and fair play, found that there was no proper compliance before the AO or CIT(A). Therefore, the Tribunal allowed the assessee to file additional evidence before the AO and set aside the CIT(A)'s order, remitting the matter back to the AO for de novo reassessment. The assessee was to be given a reasonable opportunity of being heard. The grounds taken by the assessee were partly allowed for statistical purposes.

What were the issues?

1. Whether the assessment order dated 18th March 2025, passed by the Assessment Unit under section 147 read with section 144 and 144B of the Income Tax Act, 1961, is without jurisdiction, perverse, illegal, and void ab initio, and whether the appeal order passed by the CIT(A) upholding it was passed with prejudice. - Assessee's contention: The assessment order is without jurisdiction and perverse. The CIT(A) passed the order with prejudice. - Revenue's contention: Not recorded. 2. Whether the Assessing Officer erred in arbitrarily computing the total income at ₹38,94,872/- as against the declared loss of ₹-7,39,725/-, without allowing a reasonable opportunity of hearing, and whether the assessment order passed under section 147 is based on mere suspicion, surmises, and conjectures, and is illegal, invalid, and against the facts and evidence. - Assessee's contention: The AO erred in computing income arbitrarily and without adequate opportunity. The order is based on suspicion and is illegal. - Revenue's contention: Not recorded. 3. Whether the CIT(A) erred in arbitrarily dismissing the appeal for lack of documents without specifying the required documents, and whether the addition for payments to contractors under section 68 as unexplained credit for ₹13,92,000/- is incorrect and bad in law due to want of bank statements not specifically asked for, despite providing books of accounts, contractor details, and TDS details. - Assessee's contention: CIT(A) dismissed the appeal arbitrarily. Addition for contractors is incorrect as bank statements were not specifically asked for, and other details were provided. - Revenue's contention: Not recorded. 4. Whether the addition for increase in creditors under section 68 as unexplained credit for ₹11,36,387/- is justified, where the assessee provided creditor details (PAN, name, address) and GSTR-2A/2B is available. - Assessee's contention: Addition for creditors is unjustified as details were provided. - Revenue's contention: Not recorded. 5. Whether the addition for increase in other payables under section 41(1) for ₹13,66,485/- is justified, where the increase was due to GST liability, which was a bonafide oversight. - Assessee's contention: Addition for other payables is unjustified as it was due to GST liability and a bonafide oversight. - Revenue's contention: Not recorded. 6. Whether the addition to income was made without considering the loss of ₹7,39,727/- declared in the return. - Assessee's contention: Addition was made without considering the declared loss. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 143(2),Section 142(1),Section 148A(b),Section 148A(d),Section 68,Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH AT KOLKATA

Before: SHRI YOGESH KUMAR US & SHRI RAKESH MISHRA

For Appellant: CA. प्रत्यर्थी के ओर से/

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [Ld. CIT(A)] passed u/s 250 of the Income Tax Act, 1961 [the 'Act'] for AY 2020-21 dated 26.05.2026. ITA No(s). 2610/KOL/2026 Assessment Year(s) 2020-21 Classic International.

The order continues below.

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