DCIT, CC-28, NEW DELHI, NEW DELHI vs. ERA INFRA ENGINEERING LIMITED, UTTAR PRADESH

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ITA 5592/DEL/2024Status: DisposedITAT Delhi03 June 2025AY 2010-11Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)6 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that a right of hearing does not inherently include a right to cross-examine, which depends on circumstances. The ITAT affirmed the CIT(A)'s deletion of bogus purchase disallowances, finding no evidence.

What were the facts?

The Revenue's appeal for assessment year 2010-11 arose against the CIT(A)'s order deleting disallowances for bogus expenses and purchases. This was the second round of proceedings following a remand order.

What were the issues?

Whether the CIT(A) erred in deleting disallowances for bogus expenses and purchases and whether the right to cross-examination is an absolute right.

Which sections of the Income-tax Act were involved?

Section 254,Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL

For Appellant: Ms. Chinu Bhasin, CA
For Respondent: Ms. Suman Malik, CIT(DR)
Hearing: 03.06.2025Pronounced: 03.06.2025

Date of hearing 03.06.2025 Date of pronouncement 03.06.2025 ORDER

PER SATBEER SINGH GODARA, JM

1.

This Revenue’s appeal for assessment year 2010-11, arises against the Commissioner of Income Tax (Appeals)-30 [in short, the “CIT(A)”], Delhi’s DIN and order no. ITBA/APL/M/250/2024- 25/1068967296(1), dated 23.09.2024 involving proceedings under section 254 r.w.s. 153A/143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

The Revenue seeks to raise the following substantive grounds: i. Ld. CIT(A) has erred in not considering the fact that right of cross examination is not the assessee's natural right. Ld. CIT(A) did not rely on the judgement of Hon'ble High Court of Delhi in Nath International Sales and Anr. vs Union of India and Ors. dated 17 January, 1992 order relying on the decision of the Hon'ble Supreme Court of India in the case of State of J&K and others v. Bakshi Gulam Mohammad & anr., and has adjudged the following: "a right of hearing does not include a right to cross-examine and the right to cross-examine must depend upon the circumstances of each case. ii. Ld. CIT(A) has erred in not considering the fact that it is an established position of Law that a right of hearing does not include right to cross- examine, the assessee is not naturally entitled to be given an opportunity for cross-examination and is contingent upon the facts of each case. The copy of incriminating evidences is sufficient to corroborate the transactions undertaken by the assessee. iii. Ld. CIT(A) has erred in not considering the fact that assessee has failed to discharge its onus to prove the genuineness of alleged bogus expenses of Rs. 4,39,90,559/- and bogus purchase of Rs. 22,28,600/-. iv. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. v. That the grounds of appeal

are without prejudice to each other. vi. That the appellant craves leave to add, amend, alter or forgo any 6 ground(s) of appeal either before or at the time of hearing of the appeal.

3. This appears to be the “second” round of proceedings between the parties in consequence to the tribunal’s earlier remand order dated 21.01.2020 restoring back the twin issues of bogus expenses and bogus purchase disallowances amounting to Rs.4,39,90,559/- on protective and Rs. 22,28,600/- on substantive basis, respectively. It is in this factual backdrop that the learned CIT(A) has concluded in his impugned lower appellate discussion that no 2 | P a g e substantive addition regarding above contract expenses of Rs.4,39,90,559/- has been made in any other assessee’s hands. This clinching finding of fact has gone unrebutted from the Revenue side.

4. Faced with this situation, we hereby quote Lalji Haridas Vs. ITO (1961) 43 ITR 387 (SC) settling the law long-back that such a protective addition comes into play when there arises a doubt in the Assessing Officer’s mind as to in whose hands a particular receipt of income is taxable and not otherwise. We thus see no merit in the Revenue’s instant former grievance seeking to be revive the above protective disallowance/addition of contract expenses on standalone basis. Rejected accordingly.

5. The outcome would be hardly different on the latter issue of the assessee’s disallowance on purchase amounting to Rs. 22,28,600/- which had been simply reiterated by the learned assessing authority after making reference to some accommodation entries which have nowhere been proved till date nor their details are forthcoming in the case records. We thus affirm the leaned CIT(A)’s action deleting the impugned bogus purchase disallowances as well in very terms.

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