INCOME TAX OFFICER WARD 4(1), NEW DELHI V. BHOPAL SANCHI HIGHWAYS PRIVATE LIMITED, NEW DELHI

ITA 1517/DEL/2024

AI Insights

The case involves the Income Tax Officer, Ward-4 (1), New Delhi as the appellant and Bhopal Sanchi Highways P. Ltd. as the respondent. The dispute centered on the addition of Rs.11,23,30,245 to the assessee's income, categorized as unexplained trade payables by the Assessing Officer. The assessee argued that this amount was mistakenly reported under 'Trade Payables' for the Assessment Year 2016-17, although it related to the previous year and was intended as a 'Creditor for Capital Goods'. The CIT(A) accepted the assessee's explanation and deleted the addition, a decision which the Revenue appealed against in the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669330 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Keywords: Capital expenditure; Bogus

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “ए”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं ŵी एस įरफौर रहमान, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER आअसं.1517/ िदʟी /2024 (िन.व. 2016-17) ITA No. 1517/Del/2024 (A.Y. 2016-17) Income Tax Officer, Ward-4 (1), CR Buidling, IP Estate, New Delhi 110002 ...... अपीलाथᱮ/Appellant बनाम Vs. Bhopal Sanchi Highways P. Ltd., N-135, Ground Floor, Greater Kailash-I, New Delhi 110048 PAN: AAECB-1660-N ..... ᮧितवादी/Respondent Assessee by : Shri None Department by: Shri Javed Akhtar, CIT (DR) सुनवाई कᳱ ितिथ/ Date of hearing : 23/04/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 27/06/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)] dated 05.02.2024, for the Assessment Year 2016-17. 2. The solitary issue raised by the Revenue in appeal is against deleting the addition of Rs.11,23,30,245/- made by Assessing Officer (AO) on account of unexplained trade payables. 3. Brief facts of the case as emanating from records are: The assessee was set up as Special Purpose Vehicle (SPV) by consortium of Pratibha Industries Ltd. (PIL) and 2 ITA No. 1517/Del/2024 (A.Y. 2016-17) Abhyudaya Housing and Construction (P) Ltd. for construction of highways. During the period relevant to assessment year under appeal, the assessee filed its return of income on 17.10.2016 declaring total income of Rs.2,857/- consisting of interest income from bank and no expenditure was claimed. The assessee in the return of income for AY 2016-17 inadvertently had shown Creditors for Capital Goods Rs.11,23,30,245/- pertaining to AY 2015-16 as ‘Trade Payable’. As per Note 4 of Balance Sheet, under the head ‘Other Current Liabilities’ details of amount payable to other contracts amounting to Rs.35,31,741/- was reflected. In assessment proceedings, the Assessing Officer (AO) issued of query regarding Creditors for Capital Goods of Rs.11,23,30,245/-. The assessee explained that this amount pertains to AY 2015-16 and the same has been inadvertently reflected under the head Trade Payables. However, the AO disbelieved assessee contention and made addition of the aforesaid amount. The assessee carried the issue in appeal before the CIT(A). The CIT(A) after examining the books of account and audited financial results accepted assessee’s submissions and deleted the addition. Hence, present appeal by the Revenue. 4. Shri Javed Akhtar, representing the department vehemently defended the assessment order and prayed for reversing findings of the CIT(A) and upholding the addition made by the Assessing Officer. 5. We have heard the submissions made by ld. DR and have examined the orders of authorities below. The solitary addition made by AO in the assessment order is with respect to Trade Payables to the tune of Rs.11,23,30,245/- holding it to be bogus in nature. The contention of assessee before the AO and the CIT(A) is that the aforesaid amount is in the nature of capital expenditure. The assessee had capitalized the amount in the books. Before the AO and CIT(A), the assessee has referred to Note-4 of the Balance Sheet, wherein, the same amount has been reflected in the Financial Year 3 ITA No. 1517/Del/2024 (A.Y. 2016-17) relevant to AY 2015-16 under the head ‘Creditor for Capital Goods’. Since, amount pertains to the period relevant to AY 2015-16 no addition could be made in AY 2016-17. As per the assessee amount was inadvertently shown under the head ‘Trade Payables’ at the time of filing return of income for impugned assessment year. The CIT(A) after examining books of the assessee find merit in contention of the assessee and deleted the addition. The Revenue has not been able to controvert findings of the CIT(A) on this issue. We see no reason to interfere with the findings of the CIT(A) on this issue, hence, impugned order is upheld and appeal of the Revenue is dismissed being devoid of any merit. Order pronounced in the open court on Friday the 27th day of June, 2025. Sd/- Sd/- (S RIFAUR RAHMAN) (VIKAS AWASTHY) लेखाकार सद᭭य/ACCOUNTANT MEMBER ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 27/06/2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. 4 ITA No. 1517/Del/2024 (A.Y. 2016-17) BY ORDER, //True Copy// (Asstt. Registrar) ITAT, DELHI "