C.I. FINLEASE PRIVATE LIMITED,BHOPAL vs. INCOME TAX OFFICER - 1(3), BHOPAL, BHOPAL

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ITA 815/IND/2024Status: DisposedITAT Indore16 May 2025AY 2011-129 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee's primary contention was that the CIT(A) passed the impugned order without considering the submissions e-filed by the assessee on 14.03.2024. The assessee provided an acknowledgement of these submissions, which included various documents such as appeal replies, ledgers, balance sheets, and certificates. Both the assessee's AR and the revenue's Sr. DR agreed that the case was fit for remand to the CIT(A) for fresh adjudication. The Tribunal agreed with this consensus and decided to remand the matter to the CIT(A). The CIT(A) is directed to consider the assessee's submissions, provide necessary opportunities of hearing, and pass an order uninfluenced by the previous order. The assessee is also directed to participate diligently in the proceedings. No specific finding was given on the merits of the additions, as the matter was remanded.

What were the facts?

The assessee, C.I. Finlease Private Limited, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Indore Bench, against the order dated 17.10.2024 passed by the Commissioner of Income-Tax (Appeals)-NFAC, Delhi. This order arose from the assessment order dated 29.12.2016 passed by the Income Tax Officer-1(3), Bhopal, under section 143(3) read with section 263 of the Income-tax Act, 1961, for the Assessment Year 2011-12. The dispute involves additions made by the Assessing Officer (AO) and confirmed by the CIT(A) concerning advances against AMC, excess stock found during a survey, and disallowance of interest on borrowed funds. The assessee contended that the CIT(A) passed the order without considering submissions filed on 14.03.2024 and without following the principles of natural justice.

What were the issues?

1. Whether the learned CIT(A), NFAC erred in confirming the addition of Rs. 54,14,512 made by the AO under section 68 of the Income-tax Act, 1961, towards advance against AMC? The assessee argued that the CIT(A) failed to consider submissions and evidence regarding these advances. The revenue contended that the assessee did not furnish specific details of customers, names, and addresses, and vehicle models, making the claim for advances unacceptable. 2. Whether the learned CIT(A), NFAC erred in confirming the addition of Rs. 1,00,00,185 on account of excess stock found during a survey operation under section 133A of the Income-tax Act, 1961? The assessee's grounds suggest a challenge to the AO's order, implying a lack of proper consideration of submissions. The revenue's position, as reflected in the CIT(A)'s order, is that the assessee accepted the difference during the survey and did not provide a reply to the AO's notice. 3. Whether the learned CIT(A), NFAC erred in confirming the addition of Rs. 56,44,071 towards disallowance of interest on account of diversion of borrowed funds under section 37(1) of the Income-tax Act, 1961? The assessee's grounds imply a challenge to this disallowance. The revenue's stance, as per the CIT(A)'s order, is that advancing interest-free unsecured loans to a sister concern amounts to diversion of borrowed funds, making the interest paid to HMIL not allowable.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263,Section 68,Section 133A,Section 37(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri R.K. Mangal, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 15.05.2025Pronounced: 16.05.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by order of first-appeal dated 17.10.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 29.12.2016 passed by learned ITO-1(3), Bhopal [“AO”] u/s 143(3) r.w.s. 263 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal on following grounds:

Page 1 of 9 “1. That the learned CIT(A), NFAC erred in not holding that the order was bad in law. It was perverse; (2) it was based on irrelevant material; (3) it was un-reasonable; (4) there was mis-application of the provisions of law; (5) the authority misdirected.

2. That the learned CIT(A), NFAC erred in not holding that the party order passed u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 by the A.O. was without considering the appellant company submission made on 14/03/2024 and without following rule of natural justice and fair play and was therefore a nullity and the same may be declared null and void.

3. That the learned CIT(A), NFAC erred in confirming the addition of Rs. 54,14,512/- made by the learned A.O. u/s 68 of the Income Tax Act, 1961 towards advance against AMC.

4.

That the learned CIT(A), NFAC erred in confirming the addition of Rs. 1,00,00,185/- on account of excess stock found during survey operation u/s 133A of the Income Tax Act, 1961.

5. That the learned CIT(A), NFAC erred in confirming the addition of Rs. 56,44,071/- towards disallowance of interest on account of diversion of borrowed funds.

6.

That in the alternative and without prejudice to the grounds stated above, the additions and disallowances made and assessed as income of the appellant be held to be high, unreasonable and unjustified and be suitably reduced.”

2.

Ld. AR for assessee straightaway drew us to the impugned order passed by Ld. CIT(A), the same is scanned and re-produced below:

Page 2 of 9 Page 3 of 9 Page 4 of 9

3.

Ld. AR next submitted that the CIT(A) has passed impugned order on 17.10.2024 without considering the submission e-filed by assessee on 14.03.2024 on the designated portal of Income-tax Department. Ld. AR has filed the Acknowledgement No. 142814981140324 downloaded from portal.

The Acknowledgement contains a complete list of documents filed by assessee to CIT(A), the same is scanned and re-produced below for an immediate reference:

Page 6 of 9 Ld. AR has also filed copies of above documents filed to CIT(A), in the form of a spiral book Pages 8 to 219.

4. Ld. AR, while placing above facts for consideration, prayed that the order passed by CIT(A) is not a sustainable order, the same must be set aside. After deliberations in open court, learned Representatives of both sides were ad idem that it is a fit case for remand to the file of CIT(A) for afresh adjudication of assessee’s first-appeal after considering submission of assessee. We agree to same and accordingly remand this matter to CIT(A) for a fresh adjudication. Needless to mention that the CIT(A) shall give necessary opportunities of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by CIT(A) and do not seek unnecessary adjournments failing which the CIT(A) shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.

5.

Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 16/05/2025

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