HIMU DEVELOPERS PVT LTD.,CHENNAI vs. ITO CORPORATE WARD 2(3), CHENNAI

ITA 1836/CHNY/2018Status: DisposedITAT Chennai23 September 2026AY 2008-095 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had indeed enhanced the income of the assessee by adopting the balance 42% without providing the assessee with an opportunity to present its submissions regarding this enhancement. The Tribunal noted that this was a violation of the principles of natural justice. Therefore, in the interest of justice, the Tribunal accepted the assessee's submission and decided to remand the matter back to the file of the CIT(A) for fresh consideration. The CIT(A) was directed to provide a reasonable opportunity to the assessee to present its case and file supporting evidence before deciding the issue in accordance with the law. The order of the CIT(A) was set aside, and grounds 2 to 4 of the assessee's appeal were allowed for statistical purposes. The additional grounds raised by the assessee were rendered academic but the assessee was granted liberty to raise any legal ground before the first appellate authority upon remand.

What were the facts?

The assessee, M/s. Himu Developers Pvt Ltd., filed an appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2008-09. The Assessing Officer (AO) had determined the assessee's contract receipt at Rs. 36,15,200/-, representing 8% of the total bills raised (Rs. 4,51,90,000/-) from M/s. PACL India (P) Ltd., disallowing the entire expenditure claimed as labour charges. The assessee appealed to the CIT(A). The CIT(A), finding the AO's 8% estimation unreasonable and due to the assessee's non-cooperation, enhanced the income by adopting a 50% estimation, thereby adding an additional 42% to the income already considered by the AO.

What were the issues?

1. Whether the CIT(A) erred in enhancing the income of the assessee by adopting 42% of the total bills raised as contract receipt, in addition to the 8% adopted by the AO, without providing the assessee with a proper opportunity to present its case, thereby violating principles of natural justice, as per Section 143(3) read with Section 147 of the Income Tax Act, 1961? Assessee's Contention: The assessee argued that the CIT(A) enhanced its income without issuing a notice or providing an opportunity for clarification. The assessee contended that the CIT(A)'s order was unjustified and prayed for the matter to be remanded to the CIT(A) for fresh adjudication with a reasonable opportunity. Revenue's Contention: The Revenue's representative fairly conceded that no opportunity was given to the assessee regarding the enhancement in the first appellate proceedings and reported no objection to remanding the matter to the CIT(A).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Before: SHRI. INTURI RAMA RAO & BEFORE SHRI S.S. VISWANETHRA RAVI

Hearing: 09.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 11.04.2018 passed by the Commissioner of Income Tax (Appeals), Chennai, for the assessment year 2008-09. 2. Ground No.1 raised by the assessee is general in nature requires no adjudication.

3.

The ground nos. 2 to 4 raised by the assessee challenging the action of Ld. CIT(A) in enhancing the income of the assessee

The order continues below.

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