SRUSTI REALMART LIMITED ,MUMBAI vs. INCOME TAX OFFICER 14(3)(1), MUMBAI

Brief facts of the case are that the assessee company had filed its return of income declaring total income at Rs. 5,92,500/- under the normal provisions and Rs. 11,82,280/- u/s. 115JB on the book profit. The return was processed u/s. 143(1) of the Act. The assessee’s case was selected for scrutiny through CASS and notices u/s. 143(2) and 142(1) were duly issued and served upon the assessee. The learned Assessing Officer ('ld. A.O.' for short) observed that the assessee had claimed commission expenses paid to various parties aggregating to Rs. 1,23,18,458/- varying from 15% to 20% on sale of plot during the year under consideration, where the ld. AO observed that 7 parties to whom the assessee has majorly paid the commission are from the same Srusti Realmart Limited residential address as that of the directors of the assessee company. The assessee contended that these were related parties of the directors, where it is observed that the assessee had paid commission to third parties as well on the same transaction. The ld. AO issued notice u/s. 133(4) to these parties which was not replied by the said parties. The ld. AO made a disallowance/addition on the commission amounting to Rs. 1,19,75,916/- paid to related parties to the total income of the assessee, thereby determining total income at Rs. 1,25,68,417/- vide assessment order dated 07.06.2021 passed u/s. 143(3) r.w.s. 144B of the Act. 5. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 18.07.2023 upheld the addition made by the ld. AO vide an ex parte order, where the assessee is said to have not complied with the appellate proceeding. 6. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 7. We have heard the rival submissions and perused the materials available on record. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee had ‘sufficient cause’ for its non-appearance before the lower authorities and prayed that the assessee may be given one more opportunity to present its case before the ld. AO. 8. The learned Departmental Representative ('ld. DR' for short) for the revenue vehemently opposed to setting aside the issue back to the lower authorities for the reason that the assessee has been non-compliant before the lower authorities inspite of various opportunities provided. Srusti Realmart Limited

Upon considering the rival contentions, the assessee is said to have not complied before the lower authorities and has also failed to furnish all the relevant documentary evidence before the ld. AO as well as ld. CIT(A). In order to provide the assessee with one more opportunity, we deem it fit to remand this issue back to the file of ld. AO for de novo assessment. We also deem it fit to impose a cost of Rs. 25,000/- for recalcitrant attitude of the assessee in constantly not being compliant before the lower authorities and the same is to be paid to Prime Minister Relief Fund within 30 days from the receipt of this order and the proof of which has to be furnished to the ld. AO. Hence, we remand all these issues back to the file of ld. AO who is to decide the issue based on the documentary evidence proposed to be filed by the assessee in support of its claim and the assessee is also directed to strictly comply with the proceeding without any undue delay from its side. Needless it is to say that the sufficient opportunity of hearing is to be provided. 10. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 29.08.2025 (PRABHASH SHANKAR) JUDICIAL MEMBER

The Appellant 2. The Respondent 3. CIT- concerned Srusti Realmart Limited

DR, ITAT, Mumbai 5. Guard File BY ORDER,