BABA GLOBAL LIMITED,NEW DELHI V. DCIT CENTRAL CIRCLE 29, NEW DELHI

ITA 602/DEL/2024

AI Insights

The case involves Baba Global Ltd., which appealed against the order of the CIT(A)-30, New Delhi, sustaining an addition of Rs. 19,98,738 out of an initial addition of Rs. 33,24,000 made by the Assessing Officer under section 69C of the Income Tax Act, 1961. The addition was initially related to unexplained cash credits and bogus interest payments. The Tribunal examined whether the lower authorities correctly applied section 69C in this context and whether the assessee was given a fair opportunity to contest the additions. The Tribunal concluded that the assessee had not been given a specific opportunity to address the change in the ground of addition and that the application of section 69C was not justified as the source of the interest expenditure had not been unexplained.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471630 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Other Referred Cases: Commissioner vs. Dilip Kumar and Co. & Ors. (2018) 9 SCC 1 (SC)(FB)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIBHA MEENA
• Assessee Lawyers: ASHOK KUMAR
• Keywords: Wrong claim; Rectification of order; Bogus
• Section: 143(3); 154; 69; 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member & Sh. Avdhesh Kumar Mishra, Accountant Member ITA No. 602/Del/2024 : Asstt. Year : 2018-19 Baba Global Ltd., 4873, Chandni Chowk, Delhi-110006 Vs DCIT, Circle Circle-29, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AAACB6357N Assessee by : Sh. Ashok Kumar, CA Revenue by : Ms. Pratibha Meena, Sr. DR Date of Hearing: 14.01.2025 Date of Pronouncement: 19.03.2025 ORDER Per Satbeer Singh Godara, Judicial Member: This assessee’s appeal for Assessment Year 2018-19, arises against the CIT(A)-30, New Delhi’s DIN & order No. ITBA/APL/M/250/2023-24/1058827580(1) dated 18.12.2023, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”). 2. Heard both the parties at length. Case file perused. 3. The assessee pleads the following substantive grounds in the instant appeal: “1. That Learned C.I.T. (A) has erred in law in sustaining the addition to the extent of Rs. 19,98,738/- out of addition of Rs. 33,24,000/- made by the Learned A.O. u/s 69 C of the Income Tax Act,1961 ( Figure as per rectification order dated 09.01.2024 passed u/s 154 of Income Tax Act) by changing the goalpost and treating the same as bogus (i.e. for a reason different from the ground upon which the addition was made) ITA No. 602/Del/2024 Baba Global Ltd. 2 and, that too, without providing a specific opportunity of being heard in this regard by way of issue of a show cause notice. 2. Without prejudice to above ground No. 1, the Learned C.I.T. (A) has also erred in law in not clarifying that the provisions of section 115 BBE shall not be applicable to this sustained addition of Rs. 19,98,738/-. 3. Without prejudice to both the above grounds of appeal, the Learned C.I.T. (A) has erred both on facts and in law in considering this amount of Rs. 19,98,738/- as bogus interest payment (effectively) without considering the general submissions made by the appellant in this behalf.” 4. Both the learned representatives reiterate their respective stand against and in support of the impugned section 69 bogus claim of interest expenditure amounting to Rs.33,24,000/- added in the assessee’s hands; in the course of assessment framed on 12.05.2021, and upheld in the CIT(A)’s lower appellate discussion. 5. The Revenue vehemently argues that the learned Assessing Officer had also added the corresponding unexplained cash credits as bogus ones amounting to Rs.2,77,00,000/- in the assessment order along with the interest expenditure disallowance herein. The assessee’s case on the other hand is that the learned lower appellate authority has already deleted the said quantum addition itself in it’s detailed discussion in para 9.3 at page 24 of the impugned order. 6. This is indeed coupled with the clinching fact emerging from the case file that the learned lower authorities have nowhere treated the assessee as having failed to explain source ITA No. 602/Del/2024 Baba Global Ltd. 3 of the impugned interest expenditure as they have invoked section 69C of the Act for treating it as a bogus claim. This is more so, in light of the fact that the loan amount itself stood added in the course of assessment and deleted in the lower appellate proceedings. 7. Faced with this situation, we are of the considered view that once the learned lower authorities have failed to hold the assessee as not explained source of the impugned interest expenditure, the same could not be added u/s 69C of the Act going by principle of stricter interpretation in light of Commissioner vs. Dilip Kumar and Co. & Ors. (2018) 9 SCC 1 (SC)(FB). The impugned interest expenditure addition is directed to be deleted in very terms. 8. This assessee’s appeal is allowed. Order Pronounced in the Open Court on 19/03/2025. Sd/- Sd/- (Avdhesh Kumar Mishra) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 19/03/2025 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR "