SHRI ABHISHEK LODHA,MUMBAI vs. ACIT CENTRAL CIRCLE 1(3), MUMBAI

In making addition of Rs. 7,63,706/- in reference to the commission income, it is said that in view of the facts of the case, there is no evidence regarding earning of any commission and therefore, the addition is required to be deleted. Shri. Abhishek Lodha

In making addition of Rs. 1,54,46,094/- in reference to the GP, it is said that in view of the facts of the case, there is no evidence regarding earning of any GP and therefore, the addition is required to be deleted.

It is further said that, the statement and other evidences relied upon by the Assessing Officer has not been confronted to the assessee nor any cross examination has been allowed and therefore, the addition is required to be deleted.

It is further said that since the statement and other evinces are relied upon by the Assessing Officer, then the provision of Section 153C would be applicable and not the provision of Section 148 and therefore, the proceeding is bad in law and void.”

Brief facts of the case are that the assessee is an individual engaged in the business of import, export and trading of cut, polished and rough diamonds. The assessee had filed his return of income dated 25.09.2015, declaring total income at Rs. 85,550/-, and the same was processed u/s. 143(1) of the Act. The assessee’s case was reopened based on the information received from the investigation wing, Mumbai, vide notice u/s. 148, dated 05.09.2018, pursuant to the search and seizure action u/s. 132 of the Act carried out in the case of Shri. Bhanwarlal Jain Group, dated 03.10.2013, who was alleged to be an accommodation entry provider in which the assessee was said to be one of the beneficiary of the bogus accommodation entries on account of commission amounting to Rs. 8,48,562/-, which details are as below: Name of Assessee Amount of Purchase (Rs.) Commission on purchase @ 0.075% (Rs.) Amount of Sales (Rs.) Commission on sales @ 0.075% (Rs.) Amount of Loans/Advances @2.4% (Rs.) Commission on Loans/Advances @2.4% (Rs.) Total Amount of bogus commission (Rs.) Abhishek Lodha 128662265 96496 150693603 113020 26626907 639045 848562

In response to the same, the assessee company filed return of income dated 25.10.2018, declaring total income at Rs. 85,550/-. Then, the assessee vide letter dated 02.10.2019 Shri. Abhishek Lodha objected to the reasons recorded for reopening of the assessment. Further, 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) then passed the assessment order dated 18.11.2019, u/s. 143(3) r.w.s. 147 of the Act, thereby determining total income at Rs. 1,62,95,350/-, after making additions of Rs. 1,54,46,094/- being the difference in gross profit of 10.25% on total turnover of Rs. 15,06,93,603/- and commission income of Rs. 7,63,706/- on protective basis. 5. Aggrieved the assessee was in appeal before the first appellate authority, who vide an ex parte order dated 27.09.2024, upheld the additions made by the ld. AO on the ground that the assessee has been non-compliant and has failed to substantiate his claim. 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. It is observed that the assessee has challenged the assessment order before the ld. CIT(A) but has been non-compliant throughout the appellate authority proceeding. 8. The learned Authorised Representative ('ld. AR' for short) for the assessee stated that the assessee intends to withdraw ground no. 1 and contended that the assessee has got a good case on merit and prayed that the assessee be given one more opportunity to present his case before the first appellate authority. 9. The learned Departmental Representative (‘ld. DR’ for short) vehemently opposed to setting aside the issue back to the file of the ld. CIT(A) for the reason that the assessee has been given several opportunities which were not availed by him neither before the Shri. Abhishek Lodha ld. AO nor before the ld. CIT(A). The ld. DR relied on the orders of the lower authorities. 10. On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present his case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation. We, therefore, remand this issue back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay on his side and needless it is to say that sufficient opportunity of hearing is to be given to the assessee. 11. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 13.03.2025 (OM PRAKASH KANT) JUDICIAL MEMBER

The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,