DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, SURAT, SURAT vs. M/S ABS EXPORTS, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT “DB” BENCH, SURAT BEFORE DR. BRR KUMAR, VICE PRESIDENT & MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.165/Srt/2025 (Assessment Year: 2018-19) Deputy Commissioner of Vs. M/s. ABS Exports, Income Tax, 16, A1, Parsad Chamber, Central Circle-4, Tata Road No. 2, Surat Opera House Girgaon, Mumbai-400004 [PAN No.AAUFA7642N] (Appellant) .. (Respondent) Shri Rasesh Shah, CA Appellant by : Respondent by: Shri Ajay Uke, Sr. DR 22.01.2026 Date of Hearing Date of Pronouncement 06.04.2026 O R D E R PER SUCHITRA KAMBLE - JUDICIAL MEMBER: The appeal filed by the Revenue is against the order passed by the Ld. Commissioner of Income Tax (Appeals)-4, (in short “Ld. CIT(A)”), Surat on 12.127.2024 for A.Y. 2018-19.

“a) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of disallowance of expenses u/s. 37 of the Act amounting to Rs. 2,30,57,897/- without appreciating that during the period under consideration the Assessee had no business activity. b) On the facts and in the circumstances of the case and in law the Ld. CTT(A) has allowed deduction of expenses claimed to be evolving as a consequence of the business of the Assessee against the income shown under the head of house property and has thereby ignored the essence of Chapter IV of the Income Tax Act, 1961 which deals with income and deductions which ore to be allowed respective to their nature and under the similar heads of income. c) On the facts and in the circumstances of the case and in Jaw the Ld. CTT(A) erred in deleting the addition of Rs.2,30,57,897/- on the basis of contention of the Assessee and holding that the bid not successful is itself a business activity

ITA No. 165/Srt/2025 DCIT vs. M/s. ABS Exports Asst. Year –2018-19 - 2– thereby totally ignoring that the Assessee has not shown any income from business or profession m any of the assessment years after the A.Y. 2015-16. d) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in being ignorant about the investment of the Assessee for which the Assessee has paid the occupational charge of Rs. 2,30,57,897/- and its implication over the computation of income” 3. The brief facts of the case are that the assessee company filed its return of income for A.Y. 2018-19 on 31.08.2018 declaring total income at Rs. NIL and current year loss of (-) Rs.1,17,59,363/-. The case was selected for limited scrutiny through CASS and the Assessing Officer completed the assessment under Section 143(3) of the Act on 17.06.2021 assessing total income Rs. 1,12,98,530/-. In the said assessment, the Assessing Officer made a single addition being disallowance of expenses under Section 37 of the Act amounting to Rs. 2,30,57,897/-.