Parekh Ornaments LLP Vs ACIT (ITAT Mumbai)
The assessee filed an appeal against the order dated 17.07.2023 passed by the Commissioner of Income Tax (Appeals)-48, Mumbai under Section 250 of the Income Tax Act, 1961 for Assessment Year 2018-19. The appeal was filed with a delay of more than two years, accompanied by an application for condonation supported by an affidavit of a partner.
The assessee explained that the assessment under Section 143(3) was completed on 13.04.2021 with an addition of ₹5,55,960/- under Section 69A on account of alleged stock discrepancy. The CIT(A) dismissed the appeal on 17.07.2023. Due to prolonged illness and subsequent death of a partner’s father, business affairs were managed by employees. The partners believed that the appeal to the Tribunal had been filed. It was later discovered in September 2025 that no such appeal had been filed due to communication lapses. The Tribunal held that the reasons fell within the parameters laid down by the Supreme Court in Collector Land Acquisition v. MST Katiji (1987) and, finding sufficient cause, condoned the delay.
On merits, the sole issue was the addition of ₹5,55,960/- under Section 69A for discrepancy in stock quantity. The assessee, engaged in trading and manufacturing diamond-studded jewellery, gold, silver, and platinum, filed a return declaring nil income after set-off of brought-forward losses. During a survey under Section 133A, discrepancies were found between physical stock and book stock.
