Case Number: ITA 1451/DEL/2020
Appellant: ITO Ward-61(1), New Delhi
Respondent: Ashish 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 heard the appeal filed by the Income Tax Officer (ITO) Ward-61(1), New Delhi, against Ashish Kumar Gupta, New Delhi, for the assessment year 2008-09. The appeal was directed against the orders of the learned Commissioner of Income Tax (Appeals) [CIT(A)]-20, New Delhi.
The case involved a series of appeals concerning both Ashish Kumar Gupta and Anish Kumar Gupta, who are brothers. The issues revolved 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. 1451/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, Ashish Kumar Gupta, representing himself and his brother, stated that they intended to surrender the amount of cash deposits challenged in the appeals and treat it as their income for the respective assessment years to buy peace of mind and avoid protracted 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.
Ashish 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 Ashish 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 Ashish Kumar Gupta.
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