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Facts
The assessee, Ralson Carbon Black Limited, engaged in manufacturing Carbon Black, faced assessment proceedings where creditors' amounts were added under Section 41(1) and EPF/ESI contributions were disallowed. These additions/disallowances were upheld by the CIT(A).
Held
The Tribunal admitted additional evidence filed by the assessee, which appeared relevant, and restored the issue to the Assessing Officer for fresh consideration of these evidences. The assessee had failed to substantiate its claims before the lower authorities.
Key Issues
Admissibility of additional evidence and justification of additions/disallowances by the AO.
Sections Cited
41(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
Date of Hearing 22.01.2026 Date of Pronouncement 30.01.2026 O R D E R PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 07.06.2024 of the National Faceless Appeal Centre (NFAC), Delhi
P a g e | Ralson Carbon Black Limited (AY: 2007-08) (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No. ITBA/NFAC/S/250/2024-25/1065485163(1) arising out of the order dated 23.12.2009 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the AO for AY: 2007-08.
Heard and perused the records. The assessee company is engaged in the business of manufacturing of Carbon Black and the returned of assessee were processed u/s. 143(1) on 29.08.2008 at the returned income. Thereafter, the said case was selected for scrutiny and during the assessment proceedings, all amount of creditors were added invoking the provisions of Section 41(1) of the Act and disallowances on account of EPF and ESI contributions of the employees was made, and in the appeal same has been sustained by Ld. CIT(A).
On behalf of assessee before us the application under Rule 29 has been filed for filing of additional evidence and on hearing of the same we find that primarily the case of assessee is that assessee was contesting the liabilities under criminal proceedings u/s 138 of Negotiable Instruments Act and also the liability was expressly acknowledged on the memorandum of understanding dated 12.12.2005. It was submitted by Ld. AR that due to non-
P a g e | Ralson Carbon Black Limited (AY: 2007-08) operational status of business many relevant record like books of account, ledger are not available. However, certain evidences of Bank Statements/RTGS/NEFT statement documents have been placed and copy of which is submitted here to establish that there was no cessation of liability. It was also submitted that the there is no delay in the deposit of contribution as deposits were made before the due laid out in the respective statutes.
We find that before Assessing Officer and also before Ld. CIT(A) in spite of opportunity, assessee was unable to substantiate its claim with filing details including confirmation from the creditors or other evidences about existence of creditors. The additional evidence filed before us appear to be quite relevant, accordingly, we admit the additional evidences and consider it appropriate to that the same be verified by Ld. Tax Authorities below and the same can be conveniently be done at the stage of Assessing Officer.
Therefore we set aside the impugned orders and restore the issue on merits to the files of the Assessing Officer who shall take into consideration the additional evidences of the assessee and AO will be at liberty to call for further evidences and make verifications and pass the order afresh. Appeal is allowed for statistical purposes.
P a g e | Ralson Carbon Black Limited (AY: 2007-08) Order pronounced in the open court on 30.01.2026