PAL INFRASTRUCTURE,OMKAR HILL vs. ASSESSMENT ORDER PASSED BY DCIT, CIRCLE 3.2, JURS.AO. DCIT,3.1.1.AHMEDABAD., AAYAKAR BHAWAN (VEJALPUR),

ITA 1504/AHD/2026Status: DisposedITAT Ahmedabad22 October 2026AY 2017-184 pages
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What did the Tribunal hold?

The Tribunal noted that the Assessing Officer asked the assessee to submit the working of work in progress, and certain discrepancies were noticed. The Assessing Officer did not accept the assessee's revised reconciliation, but the reasons for non-acceptance were not discussed in detail by either the Assessing Officer or the CIT(A). The Tribunal held that since the necessary verification on this issue goes to the root of the addition, it is necessary to restore this issue to the CIT(A) for due verification of the assessee's claim and for passing a speaking order. The CIT(A) may call for a remand report from the Assessing Officer if required. The assessee is directed to furnish all relevant break-up details and necessary reconciliation with evidence. The appeal of the assessee is allowed for statistical purposes. The issue of interest under Section 234B and 234C was not explicitly decided but is implicitly covered by the restoration of the primary addition.

What were the facts?

The assessee, Pal Infrastructure, a real estate firm, filed an appeal against the order dated 08-12-2025 passed by the CIT(A) for Assessment Year 2017-18. There was a delay of over 40 days in filing the appeal before the ITAT, which the assessee attributed to an inactive email on the IT Department portal. The ITAT condoned the delay. The Assessing Officer had made two additions: Rs. 3,16,072/- under Section 40(a)(ia) and Rs. 57,42,048/- for discrepancy in work in progress. The CIT(A) restored the first addition to the Assessing Officer for verification regarding TDS applicability on freight reimbursement and service tax. For the second addition, the CIT(A) confirmed the addition of Rs. 57,42,048/-, stating no need to reject the assessee's books of accounts.

What were the issues?

1. Whether the learned CIT(A) erred in law and on facts in confirming the addition amounting to Rs. 57,42,048/- on the ground that the Appellant had declared a lower profit by adopting an incorrect method in working out work-in-progress and excessive cost allocation, without considering the working submitted by the Appellant, which was based on presumption and conjectures not supported by evidence. The assessee argued that the addition was based on presumption and conjectures, not supported by evidence. The revenue's contention is not recorded. 2. Whether the learned CIT(A) erred in law and on facts in confirming the addition of Rs. 57,42,048/- without rejecting the books of accounts of the Appellant under the provisions of the Act, making such an addition untenable. The assessee argued that the addition is not tenable without rejecting the books of accounts. The revenue's contention is not recorded. 3. Whether the Learned CIT(Appeals) erred in confirming the charging of interest done by the Learned Assessing Officer u/s. 234B and 234C of the Act. The assessee argued that such interest is not chargeable. The revenue's contention is not recorded.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 145,Section 234B,Section 234C,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: Shri Rahul Chaudhary & Shri R. Govindarajan

For Appellant: Shri Darshan Belani, A.R
For Respondent: Shri Ajay Pratap Singh, CIT-D.R

PER R. GOVINDARAJAN, ACCOUNTANT MEMBER:

The assessee, a firm involved in real estate business, had filed the appeal against the order dated 08-12-2025 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre NFAC, Delhi (in short, referred to as the CIT(A)) u/s. 250 of the Income Tax Act, 1961 (herein referred to as “the Act”) relating to Assessment Year 2017-

18.2.

There was a delay of over 40 days in filing of appeal before ITAT. Assessee submitted that email registered on the IT Department portal was inactive and therefore, no intimation or communication regarding the passing of order by the Ld. CIT(A) Pal Infrastructure, A

The order continues below.

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