O R D E R

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income Tax Appeal, National Faceless Appeal Centre (NFAC), Delhi, (hereinafter referred to as the “Ld. CIT(A) NFAC”] dated 11.12.2025 for the AY 2020-2021.

2. The only issue raised by the assessee in the various grounds of appeal is against confirming the addition of Rs.17,94,02,522/- by the ld. CIT(A) as made by the AO u/s.68 of the Act in respect of advances from customers/flat purchasers received in the ordinary course of business.

3. The facts in brief are that the assessee filed return of income on 15.02.2021 declaring total income of Rs.54,73,280/-. The return of income was processed by CPC u/s 143(1) of the Act and the case of the assessee was selected for Limited Scrutiny assessment under CASS on the following reasons :-

i) Taxable receipts from other sources shown in Schedule TDS 2 is higher than the receipts shown in ITR

ii) High liabilities as compared to low income/receipts

iii) Purchase value of proper less than the value as per stamp authority.

4. Thereafter statutory notices u/s 143(2) and 142(1) of the IT Act, 1961 along with questionnaires were issued to the assessee and the assessee duly replied to all the said notices. The assessee is a limited liability partnership firm and is a builder , developer and job work contractor of Government for the last more than four years. The assessee is deriving income from business ,house property and other sources. The AO on examination of balance sheet for the impugned assessment year noted that the assessee has shown advances from parties/customers of Rs.17,94,02,522/- and Sundry creditors of Rs. 31,12,665/- under the head Trade Payable in the Balance Sheet as on 31.03.2020. The A.O. issued notice u/s 142(1) of the IT Act, 1961 dated 22.08.2022 asking the assessee to submit the details regarding advances receipts from customers in the particular format mentioned in the said notice. In response to the same the assessee submitted its response on time. Thereafter a show cause notice dated 31.08.2022 with proposed addition of Rs. 17,94,02,522/- was issued to the assessee and the assessee failed to respond to the said notice. The AO thereafter stated that in the absence of explanation and documentary evidences, the genuineness of the transaction could not be proved and thus the amount of Advance from Parties under the head Trade Payable of Rs. 17,94,02,522/- shown in the Balance Sheet as liabilities of the assessee remained unexplained and the same was added u/s 68 of the IT Act, 1961 vide order dated 08.09.2022 passed u/s 143(3) r.w.s. 144B of the IT Act, 1961.

5. In the appellate proceedings, the ld. CIT(A) dismissed the appeal of the assessee in limine by noting that the assessee did not furnish any reply in compliance to various notices issued by the AO and, thus, held that in absence of any supporting evidences, the AO rightly made the addition. Thus the addition was confirmed nevertheless the assessee furnished all the evidences/details/audited accounts before the ld. CIT(A) substantiating that the advances from customers were received in the orindary course of business and were adjusted regularly against the sales booked by the assessee. The ld. CIT(A) without taking into account the evidences furnished by the assessee restored the appeal to the Assessing Officer.

6. Ld.AR vehemently submitted that the assessee has been engaged in the business of properties(commercial and residential) development and also receives advance from the customers in the ordinary course of business the. The ld. AR submitted before the Bench that the advancess received from the customers against the booking/sale of flats which were duly adjusted either in the same year or in the subsequent year and therefore addiion by the AO u/s.68 of the Act of these advances and also confirmation by the ld CIT(A) is patently wrong and against the provisions of the Act. Ld. AR also submitted t