INCOME TAX OFFICER, WARD-10(1), I.P ESTATE V. GLOBAL REACH EXPERTS PVT. LTD., VILLAGE NAHARPUR

ITA 1082/DEL/2024

AI Insights

The case involves the Income Tax Officer, Ward-10(1), Delhi as the appellant and Global Reach Experts Private Limited as the respondent. The dispute arose from the assessment year 2014-15, where the AO completed the assessment under section 144 of the Income Tax Act, 1961 due to non-compliance by the assessee. The AO noted that a commission income of Rs.4,76,13,539 was not disclosed in the financial statements. The CIT(A) later deleted these additions, leading to the Revenue's appeal before the Tribunal. The Tribunal found that the additional evidences provided by the assessee, which included an auditor's certificate clarifying the revenue breakdown, were crucial and deserved admission. However, it also noted the need for the AO to verify the details concerning the expenditure claimed against the commission receipts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717760 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Keywords: Set aside; Additional evidence; TDS
• Section: 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1082/Del/2024 (ASSESSMENT YEAR 2014-15) Income Tax Officer, Ward-10(1), Delhi-110002. Vs. Global Reach Experts Private Limited, Office No.25, Ground Floor, Near Post Office, Village Naharpur, Sector-27, Rohini, Delhi. PAN-AAECG8454D (Appellant) (Respondent) Assessee by None Department by Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 26/05/2025 Date of Pronouncement 13/08/2025 O R D E R [ PER MANISH AGARWAL, AM: This appeal is filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC dated 10.01.2024 in Appeal No. CIT(A), Delhi-4/10910/2016-17 arising out of the order passed u/s 144 of the Income Tax Act, 1961 (the Act, in short) dated 09.12.2016. Printed from counselvise.com 2 ITA No.1082 /Del/2024 ITO vs. Global Reach Experts Pvt. Ltd. 2. Brief facts of the case are that the assessee has filed its return of income on 30.11.2014 declaring total income of Rs.6,09,972/-. The assessment was completed u/s 144 of the Act as the assessee has failed to make compliance before the AO and thus it is held by AO that the commission income of Rs.4,76,13,539/- as appearing in 26As statements was not been disclosed in the financial statement filed by the assessee and, accordingly, the additions for the same was made. 3. Against this order, the assessee preferred an appeal before the Ld. CIT(A) who vide impugned order has deleted the additions so made. 4. Aggrieved with the said order, the Revenue is in appeal before the Tribunal by following the grounds of appeal: “1. CIT(A) has ignored the fact that there is no provisions in the Income Tax Act which allows auditor to revise its audit report completely i.e. nature of business given in the audit report. 2. CIT(A) has ignored that the said receipt is recorded in P&L Account as commission and expense head claim shows that the business of the assessee is manufacturing and not service. 3. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing.” 5. Since, all the grounds of appeal are pertaining to one issue of deletion of addition of Rs.4,76,13,539/-, therefore, they are taken together for consideration before us. 6. Before us, the ld. Sr. DR submits that the assessee has not participated in the assessment proceedings and the AO after perusing the financial statements observed that assessee has Printed from counselvise.com 3 ITA No.1082 /Del/2024 ITO vs. Global Reach Experts Pvt. Ltd. declared total revenue from operations (sale) at Rs.6,94,83,475/- against which the expenditure of Rs.6,75,95,769/- were claimed towards material consumed. According to ld. DR, no income with respect to the commission as appearing in 26AS statements and at Rs.5,76,13,539/- nor any expenditure related to such income were claimed, though, the assessee had claimed credit of TDS on the said commission. The ld. Sr. DR submits that before the Ld. CIT(A) assessee filed additional evidences wherein a certificate of the auditor was filed stating that the total Revenue of Rs. 6,93,83,475/- was comprising of sales of goods of Rs. 21,86,993/- and sales of service of Rs.4,76,13,539/- however, inadvertently both are shown under single hear of Revenue from operations, therefore, the commission was part of the total revenue disclosed in the P&L Account. The assessee also filed the copy of ledger of sales service, sales of goods etc. before the ld. CIT(A). The ld. Sr. DR submits that in the remand report, the Assessing Officer had seriously objected for the admission of these additional evidences and observed in remand report that all the expenditure claimed in the P&L accounts were with respect to the materials consumed to the extent of Rs.6w,75,95,769/- and thus, it is not clear whether any expenditure was claimed against the sales of service i.e., commission receipt. The ld. Sr. DR submits that the ld. CIT(A) without appreciating these facts had deleted the additions solely based on the certificate issued by the auditor, he thus prayed for the reversal of the order of ld. CIT(A). In the alternate, it is requested by ld. Sr. DR the matter may be sent back to the file of the AO for making necessary verification of the claim of the assessee as Printed from counselvise.com 4 ITA No.1082 /Del/2024 ITO vs. Global Reach Experts Pvt. Ltd. the assessment was completed u/s 144 of the Act and no verification of expenses pertaining to such commission income were appearing in the P&L A/c. 7. None appeared on behalf of the assessee. 8. Heard the Ld. Sr. DR and perused the materials available on record. In the instant case, the assessment was completed u/s 144 as the assessee has failed to appear before the AO, however, before ld. CIT(A), the assessee though filed additional evidences containing the certificate of the auditors regarding clarification of breakup of the gross receipt and further submits copies of the ledger account however the admission of the same was seriously objected by the AO in remand report. It is further seen that in the remand report, the AO categorically observed regarding genuineness of the claim made by the assessee and further doubted the expenditure claimed. It is true that the assessee has not appeared before AO and thus, the AO was left with no alternate but to complete the assessment proceedings based on the materials available on record. Now, the assessee filed certificate of Auditor as additional evidences before the Ld. CIT(A). In view of these facts, we are of the opinion, since the evidences so filed by the assessee goes to the roots of the matter, thus, deserves to be admitted However, at the same time, the AO should be granted an opportunity to examine the details so filed in relation to the expenditure claimed by the assessee against commission receipts. Therefore, in the interest of justice, we set aside the orders of the lower authorities and remand the matter back to the file of AO with Printed from counselvise.com 5 ITA No.1082 /Del/2024 ITO vs. Global Reach Experts Pvt. Ltd. the directions to examine the issue and pass the assessment order denovo fresh in accordance with the provisions of law. The assesse is also directed to file all the evidence before the AO and also direct to file all the other details in support of the claim made in the P&L Accounts. With these directions, all the grounds of the Revenue are partly allowed for statistical purposes. 9. In the result, the appeal filed by the Revenue is partly allowed. Order pronounced in the open court on 13.08.2025. Sd/- Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:13.08.2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "