Addition Made by Tax Authorities Was Not Sustainable as Assessee Did Not Claim Job Charges: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has dismissed an addition made by the tax authorities to the tax liability of Standard Tele Towers P. Ltd. The ITAT held that the addition was not sustainable as the assessee had not claimed any expenditure on account of job charges in the year under consideration.

The assessee, Standard Tele Towers P. Ltd., a telecommunications service provider, was accused by tax authorities of claiming bogus job charges and claiming a deduction in the year under consideration. The assessee denied the allegations and denied any expenditure on job charges in its books of accounts, citing no evidence supporting the claim.

Tax authorities claimed the assessee had fraudulently claimed job charges and deductions in the year under consideration, based on statements from individuals involved in the assessee’s business, based on their allegations.

The assessee denied allegations of job charges being bogus and claimed no expenditure on job charges in its books of accounts. They argued that tax authorities did not provide evidence to support their claim. The assessee also claimed that tax authorities denied their request for cross-examination of individuals whose statements were relied upon, arguing this was an error and they should have been given the opportunity.

The Tribunal found that tax authorities did not provide evidence to support their claim that job charges were fraudulent and it also noted that the assessee requested a chance to cross-examine those whose statements were relied upon by the tax authorities, but they denied this request.

The Two member bench comprising N.K. Billaiya (Accountant Member) and Anubhav Sharma (Judicial Member) has dismissed the tax authorities’ addition stating it was unsustainable as the assessee had not claimed any job charges expenditure in the year under consideration. The ITAT deemed this an error on the part of the tax authorities and urged the assessee to cross-examine the individuals involved.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates