PR. COMMISSIONER OF INCOME TAX vs. M/S. SSS LOHA MARKETING PRIVATE LIMITED

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ITA - 117 / 2023HC Delhi28 February 20232 pages
For Petitioner: ZOHEB HOSSAIN
AI SummaryRemanded

What did the High Court hold?

The CIT(A) and the Tribunal sustained the view that since both sales and purchases were fake, they squared off each other. The High Court has decided to examine the matter further.

What were the facts?

During a survey, the assessee's director admitted that sales of Rs. 4,05,53,574/- were mere book entries. The AO made an addition under 'income from other sources', which was later confined by the CIT(A) to purported commission income at 0.25%.

What were the issues?

Whether the Tribunal erred in holding that fake sales and purchases squared off each other, and whether the addition of commission income was justified.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

$~23 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 117/2023 and CM APPLs. 9624-25/2023

PR. COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr Zoheb Hossain, Sr. Standing Counsel.

versus

M/S. SSS LOHA MARKETING PRIVATE LIMITED..... Respondent

Through: Mr Anshul Mittal, Advocate.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MS JUSTICE TARA VITASTA GANJU

O R D E R %

28.02.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. This appeal concerns Assessment Year (AY) 2010-2011. 2. The appellant/revenue has assailed the order of the Income Tax Appellate Tribunal, [in short, “Tribunal”] dated 10.08.2021. The record shows that in a survey action, the Director of the respondent/assessee made a statement that sales to the extent of Rs.4,05,53,574/- are mere book entries. Accordingly, the Assessing Officer (AO) made addition under the head „income from other sources‟. 3. Interestingly, the provisions of Section 68 of the Income Tax Act, 1961 [in short, “the Act”] were not invoked and the addition was not made under the head „income from business and profession‟. 4. In an appeal preferred by the respondent/assessee, the addition was confined to the purported commission income that it had earned. A rate of 0.25 % was applied to the aforementioned bogus entries concerning sales. ITA 117/2023

page 1 of 2 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:16:03

5.

The CIT(A) broadly concluded that since both sales and purchase were fake, they squared off each other. This view has been sustained by the Tribunal. 6. The matter requires further examination. 7. Accordingly, issue notice. 7.1 Mr Anshul Mittal accepts notice on behalf of the respondent/assessee. 8. List the appeal on 23.08.2023. 9. Counsel for the parties will file their written submissions, not exceeding three pages each, at least five days before the next date of hearing. 10. Mr Zoheb Hossain will furnish copies of the case papers to Mr Mittal within next three weeks via e-mail.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

FEBRUARY 28, 2023 / tr

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ITA 117/2023

page 2 of 2

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:16:03

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