ANURAG ENTERPRISES ,MUMBAI vs. ITO, WARD 19(1)(1), MUMBAI

PDF

ITA 6791/MUM/2024Status: DisposedITAT Mumbai08 April 2025AY 2017-18Bench: Shri Narender Kumar Choudhry (Judicial Member), Shri Omkareshwar Chidara ( (Accountant Member)1 pages

AI SummaryRemanded

Facts

The Assessing Officer (AO) added Rs. 4.53 lakhs to the appellant's income as unexplained expenditure under Section 69C of the Income Tax Act, 1961, treating certain diamond purchases as bogus based on information from ADIT (Inv.). The CIT(A) upheld this addition. The appellant claimed to have provided all details and a retraction statement from the supplier.

Held

The Tribunal noted that the CIT(A) had dismissed the appeal for non-prosecution due to the appellant not responding to notices. However, following the Bombay High Court's decision in Premkumar Arjundas Luthra HUF, the Tribunal held that appeals cannot be dismissed solely for non-prosecution without considering the issues. Therefore, the matter was remitted back to the CIT(A).

Key Issues

Whether the CIT(A) erred in dismissing the appeal for non-prosecution without considering the merits of the case, and whether the addition of Rs. 4.53 lakhs as bogus purchases is justified.

Sections Cited

69C, 69C

AI-generated summary — verify with the full judgment below

Cases cited in this judgment

Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.

Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF)
69 Taxmann.com 407 · 2016 · HC
159 citing

Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.

Before: Shri Narender Kumar Choudhry (JM) & Shri Omkareshwar Chidara (AM)

For Appellant: Shri Rakeshkumar Sirsalewala

For Respondent: Shri Manoj Kumar Sinha

Hearing: 08/04/2025Pronounced: 21/04/2025

2 Anurag Enterprises 2. From the assessment order, it is observed that the Ld. AO made an addition of Rs. 4,53,000/- under section 69C as he received the information from Investigation Wing of the Income Tax Department that the above transaction with M/s. Swastik Corporation is an accommodation entry. As the appellant could not establish the genuineness of the transaction, addition under section 69C of the Act was made by placing reliance on the decision of M/s. N.K. Industries (Guj), which was subsequently upheld by Hon'ble Supreme Court.

Aggrieved by the addition, the appellant filed an appeal before Ld. CIT(A) and the addition was confirmed by Ld. CIT(A) as there was no response to the notices issued to the appellant.

The appellant has filed an appeal with grounds of appeal before the ITAT also. Before the ITAT, the Ld. AR of the appellant pleaded that one opportunity may be given to them to represent their case before Ld. CIT(A). During the appeal proceedings, the Ld. AR of the appellant filed a paper book containing the details of copy of Return filed, affidavit of seller of diamonds, tax invoice for purchase of diamonds and bank statement evidencing payment to seller etc.

The Ld. DR relied on the order of lower authorities.

Rival sub missions are heard and the case is decided. From the order of Ld. CIT(A), it is observed that the appeal was dismissed as the appellant did not respond to the notices issued to them. In the case of Premkumar Arjundas Luthra HUF (69 Taxman.com 407) (Bom), Hon'ble Bombay High Court has held that Ld. CIT(A) cannot dismiss the appeal for non- prosecution of appeal, but the appeal order should be passed after taking into consideration all the issues raised by the appellant. As the Ld. CIT(A) did not pass the order accordingly, the Bench has decided that the matter is remitted back to the file of Ld. CIT(A). The Ld. CIT(A) is directed to give an effective opportunity to the appellant and pass the order on merits.