INDIANROOTS RETAIL PRIVATE LIMITED,NEW DELHI vs. ACIT CIRCLE 12(1), NEW DELHI

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ITA 3987/DEL/2024Status: DisposedITAT Delhi16 December 2024AY 2017-18Bench: SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, SHRI YOGESH KUMAR US (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that the CIT(A) failed in its duty to pass a speaking order on the merits of the case. Consequently, the Tribunal remitted the issues back to the Ld. CIT(A) with explicit directions to pass a speaking order on the merits, ensuring that the assessee is provided with an adequate opportunity of being heard.

What were the facts?

The appellant, Indianroots Retail Private Limited, challenged the order of the Ld. CIT(Appeal)/NFAC for assessment year 2017-18. The CIT(A) had dismissed the appellant's appeal for non-prosecution based on the 'Multiplan decision' without passing a speaking order on merits. The appellant had raised various grounds of appeal concerning additions made by the AO, including disallowance of share services expenditure, addition for stale cheques under section 41(1), and additions under section 68 read with section 115BBE for trade payables/creditors.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without a speaking order, and the correctness of various additions made by the AO concerning expenditure disallowance, stale cheques, and unexplained credits/trade payables.

Which sections of the Income-tax Act were involved?

Section 250,Section 250(6),Section 251,Section 41(1),Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C”, NEW DELHI

Before: SHRI SHAMIM YAHYA, & SHRI YOGESH KUMAR US

For Respondent: Shri Om Parkash, Sr. DR
Hearing: 10.12.2024Pronounced: 16.12.2024

ORDER

PER SHAMIM YAHYA, AM :

1.

The Assessee has filed the instant Appeal against the Order of the Ld. CIT(Appeal)/NFAC, Delhi dated 10.6.2024, relating to assessment year 2017- 18 on the following grounds:- 1. In law and on the facts and in the circumstances of the case, the order u/s 250 of the Act passed by the Ld. CIT (A) is arbitrary and is without judicious appreciation of the facts and position in law, and thus, erroneous insofar as the same upholds the order passed by the Assessing officer.

2.

That the Ld. CIT(A) was not justified by not appreciating the facts available on record i.e. Statement of facts, Grounds of appeal and passed the order without considering the same which is in contravention of the provisions of section 250(6) read with 251 of the Act.

3. In law and in the facts and circumstances in the case of the appellant, CIT(A) erred in upholding disallowance of the expenditure incurred on share services amounting to Rs. 2,60,85,624/- being excessive in nature without appreciating that the said amount being incurred on Arm's Length and after proper deduction of tax. The Id. CIT(A) failed to appreciate that allege expenses on share services were incurred to ensure the continuation of the benefit from the efficiencies of consolidation of services from group company without any intent of tax avoidance.

4. In law and in the facts and circumstances in the case of the appellant, CIT(A) erred in upholding addition of Rs. 5,26,821/- with respect of liabilities of stale cheques on assumption that such liability ceased to exist by invoking provisions of section 41(1) of the Act without appreciating that mere non- encashment of cheques does not mean that the liability of the Appellant ceased to exist, nor the provisions of section 41(1) of the Act is applicable on the facts.

5. In law and in the facts and circumstances in the case of the appellant, Ld. CIT(A) erred in upholding addition of Rs. 39,87,628/-under section 68 r.w.s. 115BBE of the Act on the premise that proof of genuineness and creditworthiness of the said creditors/trade payables not proved.

5.1 In law and in the facts and circumstances in the case of the appellant, CIT(A) erred in upholding addition of Rs. 39,87,628/-under section 68 r.w.s. 115BBE of the Act without appreciating that the transactions in question are normal trade transactions and cannot fall for addition under section 68 of the Act.

5.2 In law and in the facts and circumstances in the case of the appellant, CIT(A) erred in upholding addition of Rs. 52,52,982/-under section 68 r.w.s. 115BBE of the Act on alleged grounds that the Appellant did not submit any supporting evidence to substantiate its claim.

5.3 In law and in the facts and circumstances in the case of the appellant, CIT(A) erred in upholding addition of Rs. 52,52,982/-under section 68 r.w.s. 115BBE of the Act without appreciating that the transactions in question are normal provisions/ payable at year end and cannot fall for addition under section 68 of the Act.

2 | P a g e б. The appellant craves leave to add to alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.

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