Bombay Banglore Freight Carriers Pvt Ltd, New Delhi V. ACIT Circle-5(1), New Delhi

ITA 3582/DEL/2019

AI Insights

The case involves Bombay Banglore Freight Carriers Pvt. Ltd., which appealed against the order of the CIT(A)-2, New Delhi, which had restricted an ad-hoc addition of INR 20,00,000 to INR 7,00,000 for the assessment year 2015-16. The addition was initially made by the Assessing Officer due to disallowances of expenses claimed by the assessee, citing a low profit margin and lack of supporting evidence for the expenditures. The Tribunal, after reviewing the submissions and precedents, found that the addition was made without specific evidence of the expenditures being unallowable or bogus, and thus directed its deletion.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122190 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-10-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 23-04-2019
• Other Referred Cases: Kailash Chand Agrawal vs DCIT [2022] 108 taxmann.com 561 (Mum.), ACIT vs Vanesa Cosmetics [2021] 188 ITD 787 (Del.), YKM Holdings Pvt.Ltd., vs DICT (ITA No.5352/Del/2017 dated 06.01.2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “A” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI M.BALAGANESH, ACCOUNTANT MEMBER ITA No.3582/Del/2019 [Assessment Year : 2015-16] Bombay Banglore Freight Carriers Pvt.Ltd., 3923, Roshanara Road, Delhi-110007. PAN-AAACB4847M vs ACIT, Circle-5(1), New Delhi. APPELLANT RESPONDENT Appellant by Shri A T Panda, Adv. Respondent by Shri Kanv Bali, Sr DR Date of Hearing 19.10.2023 Date of Pronouncement 31.10.2023 ORDER PER KUL BHARAT, JM : The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A)-2, New Delhi dated 29.03.2019 for the assessment year 2015-16. 2. The assessee has raised following ground of appeal:- 1. Whether on the facts and under the circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-2, New Delhi was justified in restricting the Ad-hoc addition to Rs.7,00,000/- on account of ‘Truck Running and maintenance Expenses’ from the addition of Rs.20,00,000/- made by the AO, without carefully considering the submissions made.” 3. Facts giving rise to the present appeal are that the assessee company filed its return of income through e-mode, declaring income of INR 66,21,210/- on 27.09.2015. The case of the assessee was selected for scrutiny assessment Page | 2 and the assessment was framed vide order dated 13.11.2017 u/s 143(3) of the Income Tax Act, 1961 (“the Act”). The Assessing Officer (“AO”) during the course of assessment proceedings, recorded that the assessee had claimed freight income amounting to INR 20,89,28,142/- and paid freight of INR 16,67,39,534/-. The AO after considering the material on record, made addition of INR 20,00,000/- on adhoc basis out of the disallowances of expenses. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, partly allowed the appeal of the assessee and restricted the addition to INR 7,00,000/-. 5. Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before this Tribunal. 6. Ld. Counsel for the assessee reiterated the synopsis. The contention of the assessee are supporting evidence was duly furnished. The authorities failed to point out any specific discrepancy. The impugned addition has been made purely on adhoc basis which is not sustainable in law. 7. On the other hand, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below. He submitted that the AO has pointed out that there was a low profit margin and considering the various expenditure, claimed by the assessee without supporting it with the requisite evidence. Thus, the AO was justified the making of impugned addition. Page | 3 8. We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. Undisputedly, both the authorities have sustained the impugned addition on estimate basis. The AO has not brought any specific incident where the expenditure claimed by the assessee was not allowable or bogus. We therefore, considering the material available on record and the case laws as relied upon by the Ld. Counsel for the assessee. The reliance is placed on the decisions of Co-ordinate Benches of the Tribunal in following cases: [i] Kailash Chand Agrawal vs DCIT [2022] 108 taxmann.com 561 (Mum.); [ii] ACIT vs Vanesa Cosmetics [2021] 188 ITD 787 (Del.); and [iii] YKM Holdings Pvt.Ltd., vs DICT (ITA No.5352/Del/2017 dated 06.01.2022. Therefore, in the light of the above-mentioned binding precedents, we hereby direct the AO to delete the impugned addition. Ground raised by the assessee is thus, allowed. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 31 st October, 2023. Sd/- Sd/- (M.BALAGANESH) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER * Amit Kumar * Page | 4 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI