Case Number: ITA 1202/DEL/2020
Appellant: KRBL Limited, Delhi
Respondent: DCIT Central Circle-07, New Delhi
Assessment Year: 2016-17
Case Filed On: 2020-06-18
Order Type: Final Tribunal Order
Date of Order: 2022-05-09
Pronounced On: 2022-05-09
This case involves KRBL Limited, Delhi, which has filed an appeal against the order passed by the DCIT Central Circle-07, New Delhi for the assessment year 2016-17. The appellant is a renowned rice milling and manufacturing company. The appeal was filed on 18th June 2020, and the final tribunal order was pronounced on 9th May 2022.
KRBL Limited raised several grounds of appeal against the decision of the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary grounds include:
1.1 The CIT(A) erred in confirming additions and disallowances totaling INR 40,68,38,614 without proper application of mind and in violation of natural justice principles.
2.1 The CIT(A) affirmed the additions made by the AO in the absence of any incriminating material unearthed during the search operations at the appellant’s premises, which makes the additions illegal and liable to be deleted.
3.1 The CIT(A) erred in affirming an addition of INR 36,54,70,992 on account of alleged differences between purchases/sales made to certain parties, treating these transactions as ungenuine/bogus.
3.2 The addition was confirmed without proper appreciation of evidences/records/information/submissions furnished by the appellant, proving the genuineness of the transactions.
4.1 The CIT(A) erred in confirming an addition of INR 2,07,72,796 on account of alleged stock differences in rice during physical verification.
5.1 The CIT(A) erred in affirming an addition of INR 2,05,94,826, alleging the same as unaccounted money of the appellant without appreciating the detailed explanations provided.
6.1 The CIT(A) erred in dismissing the ground raised by the appellant regarding the levy of interest under section 234A, as there was no delay in filing the return of income for the subject year.
The tribunal noted that no incriminating material was found during the search operations for the assessment year 2016-17, which should be the basis for any additions made under section 153A of the Income Tax Act. Therefore, the additions made by the AO and confirmed by the CIT(A) were found to be unsustainable.
The tribunal observed that the appellant provided substantial evidence and documentation to support the genuineness of the transactions in question. The purchases and sales were conducted through regular banking channels, and the trading results were duly accepted by the Income-tax Department in the past assessments. The tribunal found the AO’s and CIT(A)’s stance on treating these transactions as bogus to be unsubstantiated.
The tribunal found that the addition on account of alleged stock differences was based on incorrect estimation and lack of proper physical verification. The appellant’s detailed reconciliation of stock records was not appropriately considered by the AO or CIT(A).
The tribunal found that the appellant satisfactorily explained the sources and nature of the alleged unaccounted money. The AO’s and CIT(A)’s conclusions were found to be based on presumptions rather than concrete evidence.
In the final judgment, the tribunal concluded that the additions and disallowances made by the AO and confirmed by the CIT(A) were not justified. The tribunal directed the deletion of all such additions, providing relief to the appellant. The appeal filed by KRBL Limited was allowed, and the assessment order was annulled.
The tribunal’s decision in ITA 1202/DEL/2020 highlights the importance of proper evidence and adherence to principles of natural justice in tax assessments. The deletion of additions and disallowances by the tribunal sets a precedent for similar cases where assessments are made without substantial incriminating material.
ITA 1202/DEL/2020: KRBL Limited, Delhi vs DCIT Central Circle- 07, New Delhi
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