AHLUWALIA CONTRACTS INDIA PVT. LTD.,DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, DELHI

CO 37/DEL/2025

AI Insights

This case involves an appeal by the Deputy Commissioner of Income Tax against the order of the CIT(Appeals) which annulled certain additions made by the Assessing Officer regarding disallowances under section 14A and additions on account of alleged bogus purchases. The Assessee, M/S Ahluwalia Contracts India Pvt. Ltd., also filed a cross objection against the CIT(Appeals)'s decision to confirm the addition to the extent of 15% of the alleged bogus purchases. The main legal contention revolved around the interpretation and application of sections 14A and 69C of the Income Tax Act, 1961, and the monetary threshold for appeals as per CBDT guidelines.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717665 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Appeal Filed On: 26-03-2025
• Other Referred Cases: N.K. Industries Limited vs. DCIT, Pr. Commissioner of Income Tax vs. Delhi International Airport (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY
• Assessee Lawyers: VISHAL SAHGAL; V. RAJA KUMAR
• Keywords: Bogus purchase; Tax effect; Bogus
• Section: 69C; 14A

Judgement Text

"ITA No.5104/Del/2024 & CO No.37/Del/2025 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 5104/Del/2024 िनधा\u0005रणवष\u0005/Assessment Year: 2021-22 DEPUTY COMMISSIONER OF INCOME TAX, Central Circle-31, New Delhi. बनाम Vs. M/S AHLUWALIA CONTRACTS INDIA PVT. LTD., A-177, Phase-1, Tehkhand Okhla Industrial Estate, New Delhi. PAN No.AABCA4303K अपीलाथ\u0011 Appellant \u0013\u0014यथ\u0011/Respondent & Cross Objection No.37/Del/2025 (Arising out of ITA No. 5104/Del/2024) िनधा\u0005रणवष\u0005/Assessment Year: 2021-22 M/S AHLUWALIA CONTRACTS INDIA PVT. LTD., A-177, Phase-1, Tehkhand Okhla Industrial Estate, New Delhi. बनाम Vs. DEPUTY COMMISSIONER OF INCOME TAX, Central Circle-31, New Delhi. PAN No. AABCA4303K अपीलाथ\u0011 Appellant \u0013\u0014यथ\u0011/Respondent Revenue by Shri Ajay Assessee by Shri Vishal Sahgal, CA & Shri V. Rajakumar, Advocate सुनवाईक\bतारीख/ Date of hearing: 12.08.2025 उ\u000eोषणाक\bतारीख/Pronouncement on 13.08.2025 Printed from counselvise.com ITA No.5104/Del/2024 & CO No.37/Del/2025 2 आदेश /O R D E R PER C.N. PRASAD, J.M. This appeal and Cross Objection are filed by the Revenue and Assessee respectively against the order of the Ld. CIT(Appeals)- NFAC dated 29.08.2024 for the AY 2021-22. Revenue in its appeal raised the following grounds: 1. “The order of the Ld. CIT(A) is perverse, erroneous and is not tenable on facts and in law. 2. Whether the Ld.CIT(A) has erred in law & fact by not taking into consideration the judgment of the Hon’ble Gujarat High Court in the case of N.K. Industries Limited vs. DCIT in ITA No.240, 241, 242, 260 & 261 of 2003, vide order dated 20.06.2016 and directing the AO to re-assess because taxing only certain percentage of bogus purchases goes against the principles of Section 69C of the Act. 3. Whether the Ld. CIT(A) has erred in taking into consideration the Hon’ble Apex Court order dated 11.3.2022 in the case of Pr. Commissioner of Income Tax vs. Delhi International Airport (P) Ltd. vide which it has accepted the SLP 113(SC)/[2022], wherein the identical issues (Issue of disallowance u/s 14A of the Act) were reported. 4. The grounds of appeal are without prejudice to each other. 5. The appellant craves leave to add, amend, alter or forgo any grounds of appeal either on or before the final hearing of the appeal.” Printed from counselvise.com ITA No.5104/Del/2024 & CO No.37/Del/2025 3 The Assessee in its cross objection raised the following grounds: “That on the facts and in the circumstances of the case and in law the Ld.CIT(Appeals) erred in confirming the following actions made by the Assessing Officer: 1. Not deleting addition of Rs.10,20,000/- on account of genuine purchases and only directing to confirm the addition to the extent of 15% of such purchases. All the above actions being erroneous unlawful and untenable it is prayed that the same must be quashed with directions for appropriate relief.” 2. Ld. Counsel for the assessee, at the outset, submitted that the tax effect in Revenue’s appeal is less than Rs.60 lakhs and therefore the appeal is liable to be dismissed in view of the CBDT Circular No.09 of 2024 dated 17/09/2024. Ld. Counsel submitted the following short synopsis of facts and arguments: “This appeal has been filed by the Department in respect of two additions annulled by the Ld. CIT(A):- i) Addition made as per para 2.5 in a sum of Rs.6,28,000/- in respect of disallowance u/s 14A of the Income Tax Act, 1961 (the Act); and ii) Addition made as per para 4.11 in a sum ofRs.10,20,000/- on account of alleged bogus purchases. These two additions which form the Ground of Appeal of the Department in the Form-36 as submitted by them add up to Rs.16,48,000/- only. The tax on these additions by any stretch of imagination cannot exceed Rs.60,00,000/-. Since the appeal filed by the Department is against the monetary limits as prescribed by the Board vide Circular Printed from counselvise.com ITA No.5104/Del/2024 & CO No.37/Del/2025 4 No. 9/2024 dated 17.09.2024, the appeal merits to be dismissed in limine. In the event of the appeal being dismissed on the aforesaid ground, Form-36A as filed by the Assessee in this regard may also be considered as withdrawn.” 3. Heard rival submissions, perused the record before us. As per Form 36 filed by the Department the total amount of additions or disallowances made in the assessment order was Rs.60,33,420/- and the amount disputed in appeal is only Rs.16,48,000/- and the tax effect on such disputed amount is Rs.8,95,708/-. 4. Ld. DR could not point out whether the issues in appeal fall under any exceptions provided by the Circular of the CBDT. Since the total tax effect in this Revenue’s appeal is less than Rs. 60 lakhs the appeal is liable to be dismissed in view of the Board Circular. However, in the event of the Revenue proving that the issues in appeal falls under any exceptions provided by the CBDT in its Circular the Revenue is at liberty to file miscellaneous application to recall the order and to hear the appeal on merits. Similarly, the assessee is also given liberty to file a miscellaneous application to recall the cross objection to hear it on merits. With these observations the appeal of the Revenue and the Cross Objection of the Assessee are disposed off. Printed from counselvise.com ITA No.5104/Del/2024 & CO No.37/Del/2025 5 5. In the result, the appeal of the Revenue and the Cross Objection filed by the Assessee are dismissed. Order pronounced in the open court on 13/08/2025 Sd/- Sd/- (AVDHESH KUMAR MISHRA) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13.08.2025 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "