GOEL FLEXIBLE PACKAGING PVT LTD,NEW DELHI vs. INCOME TAX OFFICER, NEW DELHI

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI

BEFORE MS MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

ITA No. 1290/Del/2024 (A.Y 2014-15) Goel Flexible Packaging Vs. Income Tax Officer, Pvt. Ltd.1/10764, Ward 11(4), Subhash Park, Naveen New Delhi Shahdara, New Delhi (Appellant) (Respondent) PAN: AABCG2057M Assessee by : Sh. Gagan R Khandelwal, Adv and Shri Jaind Kumar Jaiswal, Adv Revenue by: Shri Mahendra Singh, Sr. DR Date of Hearing 13/07/2026 Date of pronouncement 09/09/2026

O R D E R PER MADHUMITA ROY, JM: The instant appeal filed by the assessee is directed against the

order dated 05.02.2024 passed by the Ld. Commissioner of Income-

tax (Appeals)-25,Delhi under Section 250 of the Income Tax Act, 1961

(hereinafter referred to as ‘the Act’) arising out of the Assessment

Order dated 30.12.2016 passed by the Assessment Unit, Income-tax

Department under Section 143(3) of the Act for Assessment Year

2014-15 whereby and whereunder the addition to the tune of Rs.

4,61,82,937/- added in the hands of the Assessee on account of

alleged sale of flats has been confirmed.

2 ITA No. 1290/Del/2024 Geol Flexible Packaging Pvt. Ltd. 2. The brief facts leading to the case is this that the Assessee filed

its return of income on 25.11.2014 declaring loss at Rs. 32,42,103/-,

the case whereof was selected for scrutiny under CASS and notice

under Section 143(2) dated 28.08.2015 followed by notices under

Section 142(1) dated 26.08.2016 and others were issued upon the

Assessee.

construction and sale of flats and during the year under consideration

it has sold 14 flats built at Plot No. 1/1055, Niti Khand-1, Indira

Puram, Ghaziabad, UP for a total consideration of Rs. 4,75,20,000/-

upon execution of sale deed, registered with the office of the Sub-

Registrar, Ghaziabad. The Assessee in his return of income had

shown the sale receipts of Rs. 1,40,26,136/-. It is the case of the

Assessee that it has entered into a collaboration agreement with M/s

Suvandana Infrastructures Pvt. Ltd. under which the Assessee is

having 30% share in the sale value of flats and 70% of the sale

consideration belongs to the said M/s Suvandana Infrastructures Pvt.

Ltd. Further that all fundsfor the construction of flats wasborne by

the said Suvandana Infrastructures Private Limited as per such

agreement, copy whereof is produced before the Ld. A.O. As per the

collaboration agreement the Assessee had recognized 30% of the sale

consideration which is of Rs. 140,00,000/-.

3 ITA No. 1290/Del/2024 Geol Flexible Packaging Pvt. Ltd. 4. On the other hand, the Ld. A.O. disbelieved the amount of Rs.

3,32,64,000/-, as not thereceipt of the Assessee on the ground that

the such agreement entered into as above was not genuine and entire

sale consideration including 70% share of the Suvandana

Infrastructures Pvt. Ltd. has been held as the income of the Assessee.

Further the cost of acquisition to the tune of Rs. 1,20,06,456/-

claimed by the Assessee was also disallowed which was further

confirmed by the Ld. CIT(A).

A.O. while making addition in the hands of the Assessee observed that

the agreement is not registered one and the stamp papers

werepurchased in the state of UP whereas both the parties reside in

Delhi,and thestamp paperused in such deed of agreement wasprior to

the date of agreement. No signature of any witness is appeared in the

said document. The Ld. A.O. further opined that as per the agreement

it was mentioned that the Assessee company is unable to undertake

the construction of the building but nowhere mentioned that M/s

Suvandana Infrastructures Pvt. Ltd. had any expertise in the said

field.

into existence only on 27.09.2011, the said company could not be

regarded as an expert in the field of development and construction

4 ITA No. 1290/Del/2024 Geol Flexible Packaging Pvt. Ltd. work. Further merely because M/s Suvandana Infrastructures Pvt.

Ltd. failed to comply with the notice issued under Section 133(6) of the

Act, the conclusion of the Ld. AO that the said agreement as merely a

device for diversion of the Assessee’s true income in the name of

Suvandana Infrastructures Pvt. Ltd. cannot be accepted.

Wefurther note that it is neither the business of the Assessing

Officernor that of the Ld. CIT(A) to look into the matter as to why the

stamp paper used for the deed in question was purchased from UP

and not from Delhi,particularly when both the parties thereto were

from Delhi. The authorities below has failed torefer any law in support

of such finding that the stamp paper obtained from UP where the site

is available for construction work could be a barin using the same for

execution of the document which is otherwise genuine. Whether there

is any witness or not the same cannot be established the underline

commercial transactions as fictitious. It is the mutual understanding

which led both the parties to entered into an agreement in writing so

as to deliver the project in the hands of the purchasers as the right

time upon completion of the same by the parties. When the Assessee

has filed the conclusive evidence in support of the case made out, non

compliance by third parties itself cannot be a ground declaring the

entire transaction invalid, keeping in view of the collaboration

5 ITA No. 1290/Del/2024 Geol Flexible Packaging Pvt. Ltd. agreement, banking records, ledger accounts and other supporting

evidences so adduced by the Assessee before the authorities below.

key person of Suvandana Infrastructures Pvt. Ltd.whether absconding

or did not appear before the authorities below cannot also be a ground

for taking inference against the Assessee leading to addition. Further

that the authorities below has failed to establish the observation of

collaboration agreement created merelyto divert the income of the

appellant with supporting documents. In this regard, we have further

considered the Judgment passed by the Hon’ble Supreme Court in the

case of CIT Vs. Sitaldas Tirathdas, reported in 41, ITR 41 ITR 367

(S.C) whereby and whereunder it was finally distinguished between

the amount which reaches the Assessee as its income and thereafter

applied towards an obligation, and an amount which, by virtue of

overriding obligation, never becomes the Assessee’s income in the first

place.

that distinction made by the Hon’ble Apex Court, as the collaboration

agreement itself created an obligation in respect of 70% of the share of

sale proceeds payable to the collaborator. The cost of acquisition of

the land, on the ground that the land was allegedly not appearing in

the books of account, led to an inference that the same had

6 ITA No. 1290/Del/2024 Geol Flexible Packaging Pvt. Ltd.

beenacquired from an unexplainedsource, is also afinding factually

incorrect, as the books of accounts clearly showsthat the said land

had already shown in the books of account of the Assessee and further

that such acquisition of land is also found to have been referred at

Page Nos. 43 to 90 of the paper book being the purchased deed

which does not justify such addition in the hands of the Assessee.

Thus, having regard to the entire aspect of the matter, we, with the

aforesaid observation delete the addition in the hands of the Assessee

at Rs. 4,61,82,937/-.

Order pronounced in the open court on 09/09/2026. Sd/- Sd/- (KRINWANT SAHAY) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 09/09/2026 R. Naheed, Sr PS Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi