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Facts
The assessee, a Special Purpose Vehicle (SPV) for highway construction, filed its return for AY 2016-17 showing a large trade payable. The AO added this amount on grounds of it being bogus, but the assessee claimed it was a creditor for capital goods pertaining to AY 2015-16 and was inadvertently reflected.
Held
The Tribunal upheld the CIT(A)'s decision to delete the addition. The CIT(A) found merit in the assessee's contention that the amount pertained to a prior year and was a capital creditor, not a trade payable for the impugned year.
Key Issues
Whether the CIT(A) was correct in deleting the addition of Rs.11,23,30,245/- made by the AO on account of alleged bogus trade payables, when the assessee claimed it was a capital creditor from a prior year.
Sections Cited
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Income Tax Appellate Tribunal, DELHI BENCH “A”, DELHI
(A.Y. 2016-17) Income Tax Officer, Ward-4 (1), CR Buidling, IP Estate, ...... अपीलाथ�/Appellant New Delhi 110002 बनाम Vs. Bhopal Sanchi Highways P. Ltd., N-135, Ground Floor, Greater Kailash-I, New Delhi 110048 ..... �ितवादी/Respondent PAN: AAECB-1660-N Assessee by : Shri None Department by: Shri Javed Akhtar, CIT (DR) सुनवाई क� ितिथ/ Date of hearing : 23/04/2025 घोषणा क� ि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.
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.
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 (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.
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.
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 (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 सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER िद�ी/Delhi, �दनांक/Dated 27/06/2025 NV/- �ितिलिप अ�ेिषतCopy of the Order forwarded to : अपीलाथ�/The Appellant , 1. �ितवादी/ The Respondent. 2.