The Delhi Bench of Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision to delete the Rs. 6.8 crore addition for bogus purchases due to the submission of valid proof.
The Revenue-appellant appealed against the National Faceless Appeal Centre (NFAC)’s order dated 21.08.2023, which stemmed from the Deputy Commissioner of Income Tax (DCIT)’s order under Section 143(3) for the Assessment Year 2017-18.In this case, Hella India Lighting Ltd, respondent-assessee, engaged in automobile components manufacturing, filed its return of income on 27.11.2017, declaring Rs.4,47,82,110/-. The case was selected for scrutiny, and notices under Sections 143(2) and 142(1) were issued.
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Section 142(1) allows the Income Tax Officer (ITO) to issue a notice to the taxpayer to file a return or provide necessary documents for assessment. Section 143(2) enables the ITO to issue a notice for a detailed scrutiny of the filed return within six months from the end of the financial year, to verify income and deductions. Non-compliance can lead to penalties or further action.
Read More: ITAT upholds CIT(A) Decision, Dismisses Revenue’s Appeal Over Alleged Bogus Transactions
The assessee purchased fixed assets worth Rs.6,80,46,732/- but failed to provide purchase bills, though banking proofs were submitted. The expenses were added to the income as bogus purchases, but the CIT(A) deleted the addition based on the remand report from the AO.
The revenue appealed before the tribunal.
The two member bench comprising Madhumita Roy ( Judicial Member ) and Brajesh kumar Singh ( Accountant Member ) noted that the assessee provided a list of fixed assets and invoices, which were accepted in the remand report. The CIT(A) deleted the addition, and the Tribunal found no reason to interfere, dismissing the revenue’s issue as frivolous.
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