THE IRISH HOUSE FOOD AND BEVERAGES PVT LTD,MUMBAI vs. DCIT 8(3)(1), MUMBAI
What did the Tribunal hold?
The Tribunal found that the assessee had furnished detailed submissions and documentary evidence concerning the disputed issues, including the acquisition and valuation of fixed assets, depreciation, cash received, and reconciliation of accounts. A legal objection regarding the AO exceeding the scope of limited scrutiny was also raised. However, the NFAC upheld the additions without independently examining the evidence or submissions, merely referring to the assessment order. The Tribunal held that the impugned order was cryptic and lacked independent reasoning on material issues, rendering it unsustainable. Consequently, the Tribunal set aside the NFAC's order and restored the matter to the NFAC for fresh adjudication on all grounds, including the legal objection. The NFAC was directed to examine all relevant evidence and submissions and pass a reasoned and speaking order after affording the assessee an opportunity of being heard. The assessee was directed to cooperate and furnish necessary documents.
What were the facts?
The assessee, The Irish House Food and Beverages Pvt. Ltd., filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2016-17. The assessee acquired a running business under slump sale agreements for Rs. 15,00,000 each. The Assessing Officer (AO) disallowed depreciation of Rs. 83,82,174 due to a lack of evidence for fixed asset acquisition. Additions were also made for cash received upon business acquisition (Rs. 26,20,242) and unreconciled differences between unaudited and audited accounts (Rs. 62,45,576). The NFAC upheld these additions, dismissing the assessee's appeal.
What were the issues?
1. Whether the Assessing Officer exceeded the scope of limited scrutiny under CASS without requisite approval, contrary to CBDT instructions? The assessee contended that the AO's actions were beyond the approved scope and relied on decisions in Bholanath R. Shukla, Arjun Transport Company, Sterling Greenwood Ltd., and Rakesh Arora. The revenue did not record any specific argument on this point, relying on the lower authorities' orders. 2. Whether the disallowance of depreciation of Rs. 83,82,174 was justified? The assessee argued that it acquired a running business with fixed assets and provided supporting documents like Forms 3CEA and audited accounts. The revenue relied on the lower authorities' orders. 3. Whether the addition of Rs. 26,20,242 for cash received upon business acquisition was warranted? The assessee claimed the addition was unsupported and provided confirmation from the transferor, balance sheet, and auditor's certificate. The revenue relied on the lower authorities' orders. 4. Whether the addition of Rs. 62,45,576 for differences between unaudited and audited accounts was justified? The assessee contended that discrepancies were reconciled with documentary evidence. The revenue relied on the lower authorities' orders.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI BIJAYANANDA PRUSETH
Per : Narender Kumar Choudhry, Judicial Member
This appeal has been preferred by the ASSESSEE against the order dated 17.11.2025, impugned herein, passed by the Ld. National Faceless Appeal Centre (NFAC), Delhi (in short 'Ld. Commissioner') u/s 250 of the Income Tax Act, 1961 (in short 'the Act') for the A.Y. 2016-17. 2. In the instant case, the Assessee acquired the running business under the name and style of “Irish House” from Contemporary Kitchen Private Limited (CKPL) and Global Kitchen (P) Limited (GKPL) under slum
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