NAVIGATORS VISA GLOBAL LOGISTICS LIMITED,DELHI V. DCIT CENTRAL CIRCLE-25, DELHI

ITA 4703/DEL/2025

AI Insights

The case involves Navigators Visa Global Logistics Ltd., a company engaged in logistics and forward transport services, appealing against the order of the Commissioner of Income Tax (Appeals), Delhi-31, which upheld a disallowance made by the Assessing Officer (AO) under section 37 of the Income Tax Act, 1961. The disallowance was based on unverified purchases from certain suppliers, presumed to be non-filers or non-business ITR filers. The AO had issued summons under section 133(6) to these parties, but only a few responded, leading to the disallowance. The CIT(A) reduced the gross profit rate applied by the AO but upheld the disallowance. The Tribunal's decision to partly allow the appeal was based on the lack of invocation of section 145(3) and the nature of the parties involved in the transactions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840093 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Appeal Filed On: 31-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: VED JAIN; AYUSH GARG
• Section: 143(3); 133(6); 37; 37(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “B” BENCH: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4703/Del/2025 [Assessment Year : 2021-22] Navigators Visa Global Logistiics Ltd., D-123, 3rd Floor, Saket, South Delhi, Delhi-110017. PAN-AACCN0168R vs DCIT Central Circle-25 Delhi APPELLANT RESPONDENT Assessee by Shri Ved Jain, Adv. & Shri Ayush Garg, CA Revenue by Shri Rajesh Kumar Dhanesta, Sr.DR Date of Hearing 23.12.2025 Date of Pronouncement 25.02.2026 ORDER PER MANISH AGARWAL, AM : The present appeal is filed by the assessee against the order dated 27.11.2024 by Ld. Commissioner of Income Tax (A), Delhi-31 [“Ld. CIT(A)”] in Appeal No. NFAC/2020-21/10212880 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 22.12.2022 passed u/s 143(3) r.w.s. 144B of the Act pertaining to Assessment Year 2021-22. 2. Brief facts of the case are that assessee is a company engaged in the business of logistics and forward transport services. The AO had the information that assessee has made purchases from certain suppliers which are non-filer or have not filed business ITR and therefore, AO issued summons u/s 133(6) of the Act to various Printed from counselvise.com ITA No.4703/Del/2025 Page | 2 parties out of which only 03 parties had filed the replies. Therefore, the AO concluded at the out of total sum of INR 1,37,78,134/- paid to 16 parties after reducing the payments to 03 parties, the remaining amount of purchases of INR 1,29,60,528/- remained unverified and accordingly, he applied G.P rate @ 13.47% and made the disallowance u/s 37 of the Act. 3. In first appeal, Ld. CIT(A) observed that AO has not invoked the provision of section 145(3) of the Act and therefore, the profit could not be estimated. Accordingly, he applied G.P. rate of current year of 12.63% and uphold the disallowance of INR 18,66,637/-. 4. Aggrieved by the said order, the assessee is in appeal before the Tribunal by raising following grounds of appeal:- 1. “On the basis of facts and circumstances of the case, order passed by the learned Commissioner of Income Tax (Appeals) (hereinafter referred to as CIT(A)) is bad in the eye of law and on facts. 2. (i) On the facts and circumstances of the case, the CIT(A) has erred has both on facts and in law, in confirming the disallowance of Rs. 18,66,637/- made by the AO on account of expenses on estimation basis under section 37(1) of the Act. (ii) That the abovesaid disallowance has been confirmed by rejecting the detailed submission and explanation along with evidences brought on record by the assessee to justify that these expenditure are genuine, have been incurred wholly and exclusively for the purpose of business and profession and hence are the allowable expenditure under the Income Tax Act. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the abovesaid disallowance despite the fact that assessee has been maintaining regular books of accounts, audited as per law and nothing adverse has been pointed out by the AO. Printed from counselvise.com ITA No.4703/Del/2025 Page | 3 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the abovesaid disallowance despite the fact that the same has been made by the AD without concluding the independent inquiries conducted during the course of assessment proceedings to the logical end. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the abovesaid disallowance despite the fact that the same has been made by the AO by indulging in surmises without bringing on any direct evidence against the assesses, only on the basis of presumptions and assumptions. 6. Without prejudice to the above, the abovesaid disallowance has been confirmed despite the fact that the same has been made by the AO on estimation basis which is arbitrary, unsustainable and too high. 7. The appellant craves leave to add, amend or alter any of the grounds of appeal.” 5. Grounds of appeal No.1 is general in nature and needs no adjudication. 6. In respect of Grounds of appeal No. 2 to 6 raised by the assessee, Ld. AR for the assessee submits that claim of the assessee is that AO has made adhoc disallowance without invoking provisions of section 145(3) of the Act. Ld. AR submits that out of 16 parties to whom summons u/s 133(6) were sent, total transactions with these parties were of INR 94,02,697/- as against which AO wrongly observed at INR 1,37,78,134/-. Ld. AR further stated that 07 parties having total transactions of INR 18,18,863/- to whom no notice u/s 133(6) was issued however, they were included in the gross amount. Ld.AR submits that if these errors are rectified, total amount comes to INR 94,02,697/- related to those parties to whom the notices u/s 133(6) were sent but remained uncompiled with. The assessee further claimed that once books of accounts were not rejected and Printed from counselvise.com ITA No.4703/Del/2025 Page | 4 G.P rate declared had been accepted which include the GP rate on such alleged unverifiable purchases. Therefore, any further addition on such purchases is not correct. 7. Ld. AR further drew our attention to the fact that out of these parties, major payments were made to the companies like Emirates Shipping Lines 34,13,060/- and SVL Freight Forwarding India Pvt. Ltd. of INR 13,82,382/- and LCL Logistix (India) Pvt. Ltd. of INR 38,40,049/-. Ld.AR further submits that if the payments of these 03 parties were included, it would be more than INR 80 Lakhs and since they are either foreign companies or private limited companies, it could not be held that they are non-filers or filed non-business ITRs. He, therefore, requested for the deletion of the disallowance made. 8. On the other hand, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and requested for the confirmation of the same. 9. Heard the contentions of both the parties at length and perused the material available on record. From the perusal of the assessment order and appellate order, we find that both the lower authorities has not invoked the provision of section 145(3) of the Act while estimating the income of the assessee on alleged payment to service providers. It is further seen that out of the parties alleged as non-filers/non- business return filers, some of the parties are either Private Limited Company or foreign company where it could not be held that they are Printed from counselvise.com ITA No.4703/Del/2025 Page | 5 non-business ITR filers or non-filers. More particularly, when the payments made to them were more than INR 30 Lakhs in a year. Thus, looking to the entirety of the facts of the case and further considering the fact that these parties have not made any compliance to the notice issued by the AO u/s 133(6) of the Act, in our considered opinion, a lumpsum disallowance of INR 5 Lakhs would meet the end of justice which is hereby sustained and balance disallowance is deleted. The Grounds of appeal No. 2 to 6 raised by the assessee are partly allowed. 10. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 25.02.2026. Sd/- Sd/- (YOGESH KUMAR U.S) JUDICIAL MEMBER Date:-25.02.2026 *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT 6. Guard File ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "