2026 (4) TMI 970

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....ing out of assessment order dated 28.02.2024 of Ld. Assessing Officer/ Assessment Unit [hereinafter referred as 'the AO'] under section 143(3) r.w.s 144B of the Act for Assessment Year 2022-23. 2. Brief facts of the case are that the assessee filed return of income on 02.10.2022 declaring total income of Rs. 74,23,580/-. The case of assessee was selected through CASS. The assessee had shown high liabilities as compare to low income/receipts and the assessee has substantial purchases from suppliers who are Non Filer(s). The assessee showed business as contractor. Notice u/s 143(2) dated 02.06.2023, Notices u/s 142(1) dated 11.08.2023, 18.09.2023, 25.09.2023, 27.10.2023, 26.12.2023 and 08.01.2024 and show cause notice dated 02.02.2024 were....

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....mpugned order is illegal and void as the Ld. CIT(A) NFAC, neither made any inquiries through AO nor adjudicated any of the Grounds of appeal Delhi and thus defied the provisions of sub-sections (6) of sections 250, 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Income Tax Act, 1961. 5. That on the facts and circumstances of the case and in view of: (i) non-service of notices; (ii) violation of principles of natural justice; (iii) denial of proper opportunity and (iv) summarily dismissal of appeal resulting in violation of provisions of sections 250(6), 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act, the case may be restored to CIT(A) NFAC and/or AO, Faceless Assessment Unit. 6. That the Ld....

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....sought permission for following additional grounds of appeal: "1. That the illegal and adhoc additions made by the Ld. AO and upheld by Ld. CIT (A)-NFAC, Delhi were incorrect under the law and to the facts of the case as the correctness, completeness and bonafides of books of accounts maintained on basis of which audited financials were prepared and which formed part of Income tax Return filed were neither doubted nor controverted nor rejected u/s145(3) of the Income tax Act, 1961. 2. That the illegal and adhoc additions u/s 68 on creditors by the Ld. AO and upheld by Ld. CIT (A)-NFAC, Delhi was illegal and wrong under the law and to the facts of the case because the total creditors Rs. 35, 11,40 867/- included creditors o....

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....ed to Rs. 13,98,52,671/-. The details of additions are given in Table below:   ADDITIONS MADE Page No of appeal Amt (Rs.) 1. Ad-hoc 25% additions of Purchases Rs. 15,82,66,767 u/s 69C -Books of accounts not rejected, -Corresponding Sales not reduced/varied 27 395,66,691 Note-1 2. Ad-hoc 10% additions of total expenses Rs.70,95,030/- u/s 68 Additions on ad-hoc basis are on higher side 28 Para-2 709,503 3. Ad-hoc 25% additions of total Liabilities Rs. 36,86,11,589/- 28 Para-3 921,52,897 Note-2 BREAKUP OF CURRENT LIABILITIES   Opening Bal. As on 01.04.2021 Additions/ Payments during Year Bal as on 31.3.2022 Remarks Creditors 20,50,46,454 14,60,94,412* ....

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....ng year Rs. 14,60,94,412 гepresent net creditors o/s for purchases Rs. 15,82,66,767/-of CY cannot be added again u/s 68 as 25% of purchases has already added u/s 69C and thus it amounts to double taxation. Creditors cannot be added u/s 68 in view of Hon'ble Delhi HC judgement in CIT v. Shri Vardhman Overseas Ltd., (2012) 343 ITR 408 (Delhi) because the assessee had not written back the amounts to its P&L account, and the balance sheet still showed the liabilities as existing debts and paid off in subsequent Financial Year(s) which has already been accepted as correct by the Ld.AO while framing the assessment. Therefore, the entire addition of creditors included in 25% of total current liabilities deserves to dele....