Case Number: ITA 1453/DEL/2020
Appellant: ITO Ward-61(1), New Delhi
Respondent: Anish Kumar Gupta, New Delhi
Assessment Year: 2008-09
Case Filed On: 2020-07-31
Order Type: Final Tribunal Order
Date of Order: 2022-08-31
Date of Pronouncement: 2022-08-31
The Income Tax Appellate Tribunal (ITAT) Delhi “A” Bench adjudicated the appeal filed by the Income Tax Officer (ITO) Ward-61(1), New Delhi, against Anish Kumar Gupta, New Delhi, for the assessment year 2008-09. This appeal was a continuation of the previous year’s case, focusing on similar issues of cash deposits and disallowances of expenses.
This case involved multiple appeals concerning Anish Kumar Gupta and his brother Ashish Kumar Gupta, with issues revolving around additions made under Section 68 of the Income Tax Act on account of cash deposits and disallowances of expenses and additions on account of sundry creditors.
The grounds of appeal raised by the appellant in ITA No. 1453/DEL/2020 included:
The Tribunal noted that the issues in the appeals revolved around two main points: the addition under Section 68 on account of cash deposits and the disallowances of expenses and additions on account of sundry creditors pertaining to expenses incurred in connection with a contract with Reliance Industries Ltd. (RIL).
During the hearing, Anish Kumar Gupta, representing himself and his brother, reiterated their intention to surrender the amount of cash deposits challenged in the appeals and treat it as their income for the respective assessment years to avoid prolonged litigation. Consequently, the Tribunal dismissed the grounds challenging the additions on account of cash deposits as not pressed.
The Tribunal noted that the disallowances were made by the Assessing Officer (AO) on the ground that no documents or details were filed by the assessee in support of their claims. The CIT(A) affirmed these additions in a mechanical manner without providing substantive reasons.
Anish Kumar Gupta submitted that the expenses were incurred in pursuance of an agreement with RIL, where the expenses were subject to RIL’s approval. The expenses were incurred on behalf of RIL, and the payments were made through banking channels, supported by bills and vouchers.
The Tribunal found that the CIT(A) had confirmed the action of the AO without admitting the claim of the assessee. However, similar issues were examined by the Co-ordinate Bench for the assessment year 2006-07, where the expenses incurred on behalf of RIL were found to be bona fide, and the disallowances were reversed.
The Tribunal held that the expenses incurred on behalf of RIL were admissible, and the action of the lower authorities was reversed. The Tribunal directed the AO to delete the additions on account of expenses and sundry creditors in all the assessment years for both assessees.
The ITAT Delhi “A” Bench ruled in favor of Anish Kumar Gupta, New Delhi, allowing the appeal and directing the deletion of the disallowed expenses related to salary, staff welfare, and bonus. This decision underscores the importance of substantiating disallowances with concrete evidence rather than making additions based on conjecture.
Order: Appeals allowed; disallowed expenses to be deleted.
Date of Order: 2022-08-31
Date of Pronouncement: 2022-08-31
Bench: Delhi “A” Bench
Members: Shri Chandra Mohan Garg, Judicial Member; Shri Pradip Kumar Kedia, Accountant Member
Appellant Representative: Shri Anish Kumar Gupta, CA
Respondent Representative: Shri Kanav Bali, Sr. DR
Case Conclusion: The ITAT directed the AO to delete the addition of Rs. 13,93,501/-, ruling in favor of Anish Kumar Gupta.
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