SUKHWANI ASSOCIATIES,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX , PUNE

The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 03.01.2025 of National Faceless Appeal Centre (NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Intimation Order dated 25.12.2021 passed u/s.143(1) of the Act.

Assessee has raised following grounds of appeal :

Brief facts of the case are that the assessee is a Partnership firm engaged in the business of Promotor and Builder for commercial and residential complexes. Income of Rs.650/- declared in the e-return for A.Y. 2020-21 filed on 01.01.2021. In the return, assessee has claimed exempt income of Rs.2,90,30,325/-. CPC processed the return u/s.143(1)(a) of the Act vide order dated 25.12.2021 declined the exemption claimed by the assessee and assessed the income at Rs. Rs.2,90,30,970/-. Assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal.

Before us, Ld. Counsel for the assessee made detailed submissions and the crux of the same are as under :

On the other hand, ld. Departmental Representative supported the order of ld.CIT(A) but did not object if the matter is restored to the file of ld. JAO.

We have heard the rival contentions and perused the record placed before us. As far as the grounds raised by the assessee that order u/s.143(1)(a) deserves to be quashed as no opportunity was granted, we fail to find any merit because the assessee did not fill the columns in the return of income properly which resulted into the alleged adjustment. Further, assessee was having sufficient opportunity to file an application u/s.154 and to upload the return with correct figures and CPC could have processed it and corrected the mistake. Instead of filing rectification application u/s.154 of the Act, assessee decided to file the appeal before ld.CIT(A). Even otherwise, opportunity has been granted to the assessee and assessee has made detailed submission but still ld.CIT(A) was not satisfied about the claim of exempt income mentioned in the income-tax return and therefore the grounds challenging the validity of processing the return u/s.143(1)(a) of the Act are hereby dismissed.

So far as merits of the case are concerned, assessee on one hand claiming the exempt income from sale of TDR in the open market but in the audited profit and loss account the assessee has mixed both the transactions regarding the purchase and sale of TDR as well as purchase made at Kiwale and Lonawala. Before us, assessee filed the detailed paper book running into 141 pages giving the details of sale value of TDR received, TDR purchases and other incidental expenses at Rs.13.85 crore but then has debited indirect expenses of Lonawala and Mundhwa at Rs.9.68 crore approximately and finally the net profit has been arrived at Rs.2,90,30,324.72 which is the same profit as has been mentioned at page 130 from sale of TDRs. It is also claimed by the assessee that cost of the asset which was acquired during F.Y. 2016-17 has also not been deducted. Overall situation before us is that there is a mixed accounting of the regular business as well as the sale of TDR. Ld.CIT(A) has observed that eventhough the assessee was entitled to exemption in the A.Y. 2016-17 but then assessee has sold the TDR in the open market and has earned profit which is not eligible for exemption. All these aspects need to be examined in depth by the ld. JAO before whom assessee shall furnish all the requisite details. Based on the submissions by the assessee and after providing reasonable opportunity of hearing, ld. JAO shall carry out the denovo assessment proceedings taking into consideration the exemption claimed by the assessee. Impugned order is set aside and grounds of appeal raised before us are remitted to the file of Ld. JAO for necessary verification.

In the result, appeal of the assessee is partly allowed for statistical purposes.