This case involves a tax dispute for the assessment year 2020-21, where the DCIT Central Circle-2, Noida, filed an appeal against Shiv Shakti Construction, Greater Noida. The case was filed on December 2, 2022, and the final order was pronounced on July 27, 2023. The dispute primarily revolves around allegations of bogus purchases, cash expenses, and unverified employee expenses.
In the Income Tax Appellate Tribunal, Delhi Bench “G” Delhi, the case was heard before Shri Challa Nagendra Prasad, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member.
The case number for the assessment year 2020-21 is ITA 2839/DEL/2022. The DCIT Central Circle-2, Noida, is the appellant, and Shiv Shakti Construction, located at A-142, Omaxe NRI City, Pari Chowk, Greater Noida, Uttar Pradesh, is the respondent.
The assessee was represented by Shri Harish Choudhary CA, Shri Mohit Choudhary CA, Shri Nitin Kanwar Adv, and Ms. Neetu Jain CA. The department was represented by Shri H.K. Choudhary, CIT-DR.
The date of hearing was May 3, 2023, and the date of pronouncement was July 27, 2023.
The appeals filed by the Revenue and the assessee for various assessment years were heard together and disposed of by a common order.
For the assessment year 2015-16, the grounds of appeal raised by the assessee included issues such as rejection of books of account and estimation of net profit at 10% of gross receipts.
The grounds of appeal raised by the Revenue included deletion of additions related to bogus purchases and cash payments, and disallowance of employee expenses.
The Tribunal observed that the assessee, a government-approved civil contractor, engaged in irrigation development activities and other construction projects, faced issues regarding large outstanding amounts as ‘other sundry creditors.’ The search and seizure operation conducted on November 27, 2020, revealed certain documents and information allegedly of incriminating nature.
The CIT(A) found partial merit in the various pleas raised by the assessee and restricted the aggregate disallowance from Rs.15,22,47,537/- to Rs.3,14,05,653/-. The Tribunal concurred with the CIT(A) and provided detailed reasons for their decision.
The appeals of the assessee were partly allowed, and the appeals of the Revenue were dismissed. The Tribunal upheld the action of the CIT(A) in estimating the net profits at 10% of the receipts from contract business after rejecting the books of accounts of the assessee. The interest income from fixed deposits was also included for estimation purposes.
Order pronounced in the open Court on July 27, 2023, by Shri Challa Nagendra Prasad, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member.
DCIT Central Circle-2, Noida vs. Shiv Shakti Construction: Tax Dispute for AY 2020-21
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