ITO, WARD-22(3), NEW DELHI V. SATCAB SUBSCRIBER SERVICES P.LTD, NEW DELHI

ITA 821/DEL/2023

AI Insights

The case involves Satcab Subscriber Services Pvt. Ltd., which appealed against the order of the Assessing Officer (AO) who treated certain sales as unexplained cash credits under section 68 of the Income Tax Act, 1961. The AO had doubts about the genuineness of sales to 17 parties and one party, Oxigen Services India Pvt. Ltd., which denied transaction with the assessee. The CIT(A) found that the sales were genuine and included in the total sales figure, thus already taxed. The Tribunal dismissed the revenue's appeal, supporting the CIT(A)'s decision and referencing a relevant High Court decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708318 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Other Referred Cases: CIT Vs. Kailash Jewellery House in ITA 613/2010
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEHESH KUMAR
• Assessee Lawyers: DHURV DEV GUPTA
• Keywords: Business income; Additional evidence; Unexplained cash credit
• Section: 143(3); 68; 133(6)

Judgement Text

"INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 821/Del/2023 (Assessment Year: 2018-19) ITO, Ward-22(3), New Delhi Vs. Satcab Subscriber Services Pvt. Ltd, Essel House Lawrence Road, Inidustrial Area, New Delhi, B-10, Delhi-110035 (Appellant) (Respondent) PAN:AAZCS4072N Assessee by : Shri Dhurv Dev Gupta, Adv Revenue by: Shri Mehesh Kumar, CIT(DR) Date of Hearing 22/05/2025 Date of pronouncement 16/07/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.821/Del/2023 for AY 2018-19, arises out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2022-23/1049066317(1) dated 24.01.2023 against the order of assessment passed u/s 143(3) of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 18.10.2021 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided in this appeal is as to whether the sales disclosed by the assessee in the sum of Rs. 93,34,85,432/- could be considered as a separate addition u/s 68 of the Act treating the same as unexplained cash credit in the in facts and circumstances of the instant case. ITA No. 821/Del/2023 Satcab Subscriber Services Pvt. Ltd Page | 2 3. We have heard the rival submissions and perused the material available on record. The assessee is engaged in the business of marketing and distribution of e-recharge services. It purchases online e-recharge vouchers from DTH operators and sells it to various distributors/retailers/online aggregators. The return for AY 2018-19 was filed by the assessee company declaring total income at Rs. 6,67,457/-. The assessee has shown total sales of Rs. 521,49,00,678/- and purchase of Rs. 5,31,19,37,769/-. The party wise details of purchase and sales together with the sample bills of each party above Rs. 10 lacs were called for verification by the ld AO during the course of scrutiny assessment proceedings. The assessee furnished the same vide letter dated 21.12.2020. In order to verify the veracity of the assessee’s claim, notice u/s 133(6) of the Act stood issued to 2 parties from whom purchases were made and 30 parties to whom sales were made seeking certain details from the suppliers and customers. Out of 30 parties to whom notice u/s 133(6) of the Act were issued, 17 parties to whom the total sales made to the tune of Rs. 103,74,91,639/- did not respond. Accordingly, the ld AO doubted the genuineness of the sales made to these 17 parties. Further, the ld AO noted that 1 party namely Oxigen Services India Pvt. Ltd had denied the sale transaction with the assessee. Accordingly, a show cause notice stood issued to the assessee as to why the transactions with 17 parties and Oxigen Services India Pvt. Ltd should not be added to the total income of the assessee. The assessee replied that all the sales made are genuine and legitimate sales made through regular banking channels. The assessee furnished all the documents relating to KYC and had proved the creditworthiness of the customers. It was also submitted that the assessee had duly disclosed the transaction with these parties as its sales and offered the same to tax and hence there is no question of making separate addition which would result in double taxation. The assessee on its part furnished all the KYC information related to ITA No. 821/Del/2023 Satcab Subscriber Services Pvt. Ltd Page | 3 customers in the form of sale invoices raised to the customers, ledger account of the customers as appearing in its books, bank statement duly highlighting the receipts from the concerned customers, financial statement of customers which are listed companies and copy of GST returns filed by the assessee which support the billings made to the customers before the ld AO. The assessee also submitted the sale confirmation from the customers before the ld AO. With regard to the transaction with Oxigen Services India Pvt. Ltd, the assessee stated that it had made sale of Rs. 5,28,06,389/- to this party and furnished the details of the KYC information, copy of GST return and ledger account of Oxigen Services Pvt. Ltd to prove the genuineness of sales made thereon. Since, the said party had denied having any transaction with the assessee in response to the notice issued u/s 133(6) of the Act, the ld AO proceeded to treat the sales made to such party as ingenuine and added the same as unexplained cash credit u/s 68 of the Act. With regard to 17 parties to whom total sales of Rs. 103,74,91,639/-, the ld AO observed that assessee had merely furnished confirmation from the parties and had not furnished their bank statement and returns of income to prove the genuineness of the sales. Out of 17 parties, 5 parties responded to the second notice issued u/s 133(6) of the Act and furnished the requisite details. Accordingly, the ld AO considered the sales made to those 5 parties as genuine and added the differential sales of Rs. 88,06,79,043/- made in respect of 12 parties as unexplained cash credit u/s 68 of the Act. 4. With regard to other parties (including Oxigen Services India Pvt. Ltd), the assessee furnished the confirmation, their bank statement, GST returns and invoices together with the ledger account. The ld CIT(A) admitted those additional evidences and made a tabulation with confirmation of the fact that the ITA No. 821/Del/2023 Satcab Subscriber Services Pvt. Ltd Page | 4 13 parties had indeed made purchases from the assessee totaling to Rs. 93,34,85,432/- and the same is included in the total sales figure of Rs. 521,49,00,678/- and has already disclosed and offered as sales in the income tax return. Hence, any addition made on this account would only result in double addition by placing reliance on the decision of the Hon’ble Jurisdictional High Court in the case of CIT Vs. Kailash Jewellery House in ITA 613/2010 wherein, it was held that once, the amount was credited in the sales account and have been duly included in the profit disclosed by the assessee for its return, the same could not be treated as undisclosed income and no addition could be made once again in respect of the same. No infirmity is found in the findings of the ld CIT(A). Accordingly, the grounds raised by the revenue are dismissed. 5. In the result, appeal of the revenue is dismissed. Order pronounced in the open court on 16/07/2025. -Sd/- -Sd/- (VIKAS AWASTHY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16/07/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "