INCOME TAX OFFICER, WARD - 5(1), KOLKATA vs. M/S LAKSHITA CONSTRUCTION PRIVATE LIMITED, KOLKATA

ITA 2692/KOL/2026Status: DisposedITAT Hyderabad01 October 2026AY 2018-195 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeals on the grounds of low tax effect. For AY 2012-13, the tax effect was ₹25,56,897/-, which is below the monetary limit of ₹60,00,000/- prescribed by CBDT Circular No. 9 of 2024 for filing appeals before the Tribunal. The Senior DR could not rebut this fact or demonstrate any exception. Consequently, the appeal for AY 2012-13 was held to be not maintainable and was dismissed. The Tribunal noted that if upon re-verification by the AO, the tax effect is found to be above the limit or the case falls under any exceptions, the Revenue can file a Miscellaneous Application for recall and revival of the appeal. The same reasoning was applied mutatis mutandis to the other appeals for AYs 2013-14, 2015-16, 2016-17, 2017-18, and 2018-19, as their tax effects were also below the prescribed monetary limit. The specific grounds of appeal raised by the Revenue were not adjudicated on merits due to the dismissal on the preliminary ground of low tax effect. No issue was left undecided, as the appeals were disposed of on maintainability.

What were the facts?

The Revenue filed six appeals before the Income Tax Appellate Tribunal (ITAT), Kolkata 'B' Bench, challenging the orders of the Commissioner of Income Tax (Appeals)-20, Kolkata, for Assessment Years (AYs) 2012-13, 2013-14, 2015-16, 2016-17, 2017-18, and 2018-19. The appeals pertained to additions made by the Assessing Officer (AO) on account of undisclosed income and unexplained capital deployment, which were deleted by the CIT(A). The assessee, M/s Lakshita Construction Private Limited, was represented by none, and the appeals were heard with the assistance of the Senior Departmental Representative (DR). The Tribunal noted that the tax effect in the first appeal (AY 2012-13) was ₹25,56,897/-, which was below the monetary limit for filing appeals as per CBDT Circular No. 9 of 2024.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 54,17,989/- made by the Assessing Officer on account of undisclosed income estimated on the basis of incriminating material found during the search (Question of law and fact, concerning Section 69 of the Income Tax Act, 1961). 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in accepting the assessee's revised reconciliation and explanation of the seized pen drive without proper verification (Question of law and fact). 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in excluding various cash inflows recorded in the seized pen drive from the computation of undisclosed income solely on the basis of the assessee's submissions, ignoring the incriminating nature of the seized material (Question of law and fact). 4. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in restricting the undisclosed receipts only to the ‘Collection1’ accounts and in reducing the estimated profit rate from 11% to 5%, without any supporting evidence or cogent basis (Question of law and fact). 5. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 24,62,722/- made on account of unexplained capital deployment, ignoring the fact that large-scale unaccounted business activities necessarily required deployment of undisclosed funds (Question of law and fact, concerning Section 69 of the Income Tax Act, 1961). Assessee's contentions: None appeared on behalf of the assessee. Revenue's contentions: The Revenue argued that the CIT(A) erred in deleting the additions made by the AO, particularly concerning undisclosed income estimated from seized material and unexplained capital deployment. They contended that the CIT(A) improperly accepted the assessee's explanations regarding the seized pen drive and excluded cash inflows without proper verification, ignoring the incriminating nature of the seized material. The Revenue also argued that the CIT(A) erred in restricting undisclosed receipts and reducing the profit rate without a cogent basis.

Which sections of the Income-tax Act were involved?

Section 250,Section 69

AI-generated summary — verify with the full judgment below

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

Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

These six appeals filed by the Revenue are against the separate orders of the Commissioner of Income Tax (Appeals)-20, Kolkata [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinaf

The order continues below.

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