FRONTIER COMMERCIAL CO. LTD.,FARIDABAD vs. DCIT, CENTRAL CIRCLE- II, FARIDABAD

Heard both the parties at length. Case files perused.

It emerges during the course of hearing that there arises the first and foremost legal issue of the validity of section 143(3) assessment dated 31.03.2015 itself in the former assessment year 2013-14. This is for the precise reason that the departmental authorities had carried out a search action dated 09.09.2012 in M/s SRS Group of cases leading the Assessing Officer to frame the above regular assessment in the assessee’s hands thereby disallowing selling charges of Rs.56,23,615/-.

Learned CIT-DR could hardly dispute that the assessee’s case was centralized in furtherance to the said search action and both the learned lower authorities thereafter proceeded as per the search record only. That being the case, we are of the considered view that once there already exists a specific provision of framing assessment in case of such a third person u/s 153C of the Act which is self-contained correctness itself wherein the date of search is taken as the date of recording of satisfaction under first proviso thereto, in light of CIT Vs. RRJ Ltd. (2024) 465 ITR 101 (Del.), the assessment herein framed u/s 143(3) of the Act hardly satisfied the test of law. The same stands quashed in very terms. All other pleadings on merits herein stand rendered academic. The assessee’s instant former appeal ITA No. 7349/Del/2017 is accepted therefore.

Next comes the assessee’s latter appeal ITA No. 1771/Del/2019 raising it’s sole substantive ground that both the learned lower authorities have erred in law and on facts in disallowing the entire selling expenses of Rs.76,11,414/- claimed at it’s behest. The Revenue draws strong support from both the lower authorities’ action that once the assessee had fails to plead and prove all the relevant facts, the impugned selling expenditure could hardly be accepted.

The assessee’s case on the other hand is that it was engaged in the business of trading of building material items, share & securities and real estate etc. wherein such selling expenses representing commission and miscellaneous items could not be all together ruled out.

Be that as it may, we are of the considered view in these peculiar facts that denial of entire selling expenses in such an instance could not be concurred with and, therefore, it is ITA No. 1771/Del/2019 Frontier Commercial Co. Ltd.

No other ground or arguments has been pressed before us.

This assessee’s latter appeal ITA No. 1771/Del/2019 is partly accepted.

To sum up, the assessee’s instant appeal ITA No. 7349/Del/2017 is allowed and it’s latter case ITA No. 1771/Del/2019 is partly allowed in above terms. A copy of this common order be placed in the respective case files. Order Pronounced in the Open Court on 09/04/2025. (M. Balaganesh) (Satbeer Singh Godara) Accountant Member Judicial Member