HSK INFRA PRIVATE LIMITED,DELHI V. ACIT, CIRCLE-11(2), NEW DELHI

ITA 1606/DEL/2024

AI Insights

The case involves HSK Infra Pvt. Ltd., the appellant, contesting an order by the Commissioner of Income Tax, National Faceless Appeal Centre, which upheld an assessment order adding Rs. 11,66,47,930 as bogus creditors under section 68 of the Income Tax Act, 1961. The Tribunal noted the Assessing Officer's failure to provide a speaking order and conduct independent inquiries, leading to a decision to set aside the lower authorities' orders and remand the case for fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785181 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 09-04-2024
• Other Referred Cases: TIN box 249 ITR 216
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU MUKHARJEE
• Assessee Lawyers: PRATEEK MITTAL
• Keywords: Set aside; Corroborative evidences; Non compliance; Bogus
• Section: 143(3); 68; 131; 37(1)

Judgement Text

"ITA No.1606/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER& SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER ITA No.1606/Del/2024 [Assessment Year: 2017-18] HSK Infra Pvt.Ltd. E-158, GF, Kalkaji New Delhi-110019 Vs ACIT, Circle-11(2) New Delhi PAN-AADCH2239J Appellant Respondent Assessee by Shri Prateek Mittal, CA Revenue by Dr.Ranu Mukharjee, CIT. DR Date of Hearing 27.10.2025 Date of Pronouncement .10.2025 ORDER PER AMITABH SHUKLA, AM, The captioned appeal has been preferred by the assessee against order dated 02.04.2024 of the ld. Commissioner of Income Tax, National Faceless Appeal Centre (“NFAC”), Delhi[hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 24.12.2019 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) pertaining to Assessment Year 2017-18. Printed from counselvise.com ITA No.1606/Del/2024 Page | 2 2. The assessee has raised following grounds of appeal contesting the order of Ld. First Appellate Authority:- 1. “That on facts and in law, the Ld. Commissioner of Income Tax (Appeals) Faceless erred in upholding the order passed by the Ld. AO u/s 143(3) without fully appreciating the facts and contention of the appellant and therefore, the Orders of the Ld. CIT (A) Faceless and Ld. AO are bad in law. 2. That on the facts and in the circumstances of the case and in Law, the Ld. CIT (A) Faceless erred in not deleting the unlawful addition of Rs. 71,78,040/- made u/s 37(1) of the Act on account of disallowance of business promotion and tour & travel expenses, festival expenses and security guard expenses being wholly and exclusively expended for business purposes. 3. That on the facts and in the circumstances of the case and in Law, the L.d. CIT (A) Faceless erred in upholding the addition of Rs. 11,66,47,930/- made u/s 68 of the Act on account of bogus creditors. 4. The appellant craves leave to add, to alter, vary, modify or otherwise amend the grounds before the appeal is heard and finally disposed of.” 3. At the outset Ld. Counsel for the assessee submitted that he would like to press ground No. 3 only. Accordingly, ground of appeal No. 1 and 2 are dismissed as not pressed. 4. The Ld. Counsel for the assessee submitted that the only issue in the present appeal regarding an addition of Rs.11,66,47,930/- made by the Ld. AO invoking provisions of the section 68 of the Act. It was submitted that the assessee company is engaged in the business of civil Printed from counselvise.com ITA No.1606/Del/2024 Page | 3 construction, acting as sub-contractor. The ld. Counsel drew our attention to para 3.4 from pages 3 to 7 of the assessment order. The Ld. AO had held that sundry creditors namely Sh. Manoj Kumar and M/s. Narender Building materials suppliers having closing balances of Rs.5,46,81,707- and Rs.6,19,66,223/- respectively were bogus sundry creditors. The Ld. AO had drew above conclusions as the assessee had failed to provide complete bills and vouchers qua above parties. The said two parties also did not respond to summons u/s. 131 issued by the Ld. AO. The Ld. AO also give similar opportunity to the assessee to present the said persons, which also went uncompiled. Before the Ld. First Appellate Authority also the assessee did not make adequate compliances as evident from para 8.3 of the order. Consequently, reliance was placed upon the findings of the Ld. AO. 5. The Ld. Counsel argued that the impugned sundry creditors are not bogus parties. It was submitted that the parties are genuine who could not make due compliances before the lower authorities. The Ld. Counsel through an extensive paper book, placed on records, attempted to convince us regarding genuineness of the transactions, identity of the parties and their credit worthiness as required u/s. 68 of the Act. It was also submitted that the balances qua impugned parties have been cleared in the subsequent year. Printed from counselvise.com ITA No.1606/Del/2024 Page | 4 6. Per contra the Ld. DR placed reliance upon the order of lower authorities. It was vehemently argued that the assessee and / or its associate parties have not complied with the statutory requirement of lower authorities and therefore, cannot be given any leniency at this stage. It was also submitted that the documents referred by the assessee now through its paper book, in toto, were not made available to the Ld. AO. 7. We have heard rival submissions and in the light of material available on records. We have noted that as per facts recorded by the Ld. AO in his order, he had given opportunities to the assessee and its associates, for filing the required details which were not satisfactorily filed by the assessee leading to him making the impugned addition. We have however noted that the order passed by the Ld. AO is not a speaking order and clear facts have not been brought on records before making the impugned addition. There are also indications of no enquiries conducted by the Ld.AO at his own end. Before the Ld.First Appellate Authority also the conduct of the assessee was far from satisfactory as far as submission of any details and / or evidences is concerned, leading to dismissal of the appeal. We have also noted from para 9.3 of the appellate order that the Ld. CIT(A) has also not Printed from counselvise.com ITA No.1606/Del/2024 Page | 5 given a reasoned finding and has merely relied upon non compliance before the Ld. AO. 8. We have thus noted that inadequate submission of details and evidences, before the lower authorities qua identity and creditworthiness of parties and genuineness of transactions and respect of the two sundry creditors lies at the core of the controversy. Before us the Ld. Counsel for the assessee also admitted that couple of documents comprising part of paper book, were not available to the Ld. AO. The Ld. Counsel also submitted that the two sundry creditors can now present themselves before the Ld AO and / or furnish a confirmation regarding the veracity of transactions and receipt of money from the assessee. We are therefore of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and file all supporting evidences before the Ld.AO. We have also noted that the Ld. DR also concurred with the view that the matter may be set aside to the Ld. AO for readjudication. The assessing officer is the primary authority under the income tax act to be examine facts of a case in the light of available evidences before determining correct taxable income of a tax payer. We therefore set aside the order of lower authorities on this issue and we direct the Ld. AO to readjudicate the matter de novo by examining the matter afresh in accordance with law and by passing a Printed from counselvise.com ITA No.1606/Del/2024 Page | 6 speaking order. Reliance in this regard is placed upon the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216. The Ld. AO shall give opportunities of being heard to the assesse and it shall be bounden upon the assesse to comply with the notices issued by the Ld. AO. Any non-compliance on the part of the assesse can be adversely viewed. The assessee shall be at liberty to produce on or any evidence in support of its contentions to defend its case. Accordingly, all the grounds of appeal raised by the assessee on this issue are allowed for statistical purposes. 9. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 29 October, 2025. Sd/- /-/- Sd/- /- [YOGESH KUMAR U.S.] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:29.10.2025 Amit Kumar,/NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "