DEPUTY COMMISSIONER OF INCOME TAX, DELHI vs. ARTLINE FINANCE PRIVATE LIMITED (FORMERLY KNOWN AS M/S ARTLINE VINIMAY PRIVATE LIMITED), DELHI

ITA 8179/DEL/2025Status: DisposedITAT Delhi28 September 2026AY 2014-156 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the protective addition made in the hands of the assessee is not sustainable. The Assessing Officer had made a protective addition of Rs. 20.98 crore in the assessee's hands, considering the assessee as a conduit for transferring funds to M/s Rajyog Buildtech Private Limited, where a substantive addition was made. However, it was noted that the substantive addition made in the hands of M/s Rajyog Buildtech Private Limited for AY 2014-15 had been deleted by the CIT(A) and this deletion was upheld by the ITAT. The Tribunal relied on the settled legal principle that a protective addition must have a substantive addition as its foundation. Since the substantive addition in the case of M/s Rajyog Buildtech Private Limited had ceased to exist, the protective addition in the assessee's case also did not survive. The Tribunal cited decisions in Kanaw Metals Vs. ITO and DCIT Vs. Artline Vinimay Pvt. Ltd. to support this view. Therefore, the Tribunal affirmed the order of the CIT(A) and deleted the protective addition.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) deleting a protective addition of Rs. 20.98 lakhs made by the AO for Assessment Year 2014-15. The assessee, Artline Finance Private Limited, had its case taken up for reassessment under Section 147 read with Section 148. The AO noted that the assessee advanced Rs. 19.18 crore to M/s Jak Infrastructure Pvt. Ltd. and Rs. 1.80 crore to M/s Rajyog Buildtech Pvt. Ltd. The AO identified the assessee as a shell company and considered the transaction non-genuine. A protective addition was made in the assessee's hands, with a substantive addition already made in the case of M/s Rajyog Buildtech Private Limited. The CIT(A) partly allowed the assessee's appeal by deleting the protective addition.

What were the issues?

1. Whether the learned CIT(A) erred in deleting the protective addition of Rs. 20.98 lakhs, considering that the substantive addition in the case of Rajyog Buildtech Private Limited has not attained finality, as per Section 147 read with Section 143(3) of the Income Tax Act. - Revenue argued that the CIT(A) erred by not appreciating that the substantive addition in the case of Rajyog Buildtech Private Limited was admitted before the Hon'ble High Court and had not attained finality. They contended that protective and substantive additions are parallel mechanisms and a protective assessment cannot be annulled while the substantive assessment remains sub-judice. - Assessee argued that the CIT(A) rightly deleted the protective addition and requested to uphold the CIT(A)'s findings. 2. Whether the learned CIT(A) mechanically relied on the appellate order in the case of M/s Rajyog Buildtech Private Limited without independently examining the confirming material on apparent one movements, as per Section 147 read with Section 143(3) of the Income Tax Act. - Revenue argued that the CIT(A) deleted the protective addition without assigning cogent reasons and without dealing with substantial evidence and findings recorded in the reassessment order. - Assessee relied on the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 139,Section 142(1),Section 153A,Section 153(2)

AI-generated summary — verify with the full judgment below

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

Before: SHRI SUDHIR KUMAR & SHRI MANISH AGARWAL

For Appellant: Shri Amit Goel, Adv. & Shri Pranav
For Respondent: Shri K. Hauthang, CIT(DR)
Hearing: 19/08/2026Pronounced: 28/09/2026

PER SUDHIR KUMAR, JM: This appeal by the Revenue is directed against the order dated 05.08.2025 of the Ld. Commissioner of Income Tax (Appeals)-24, New Delhi. Assessment in this case was completed by the DCIT Central Circle, Delhi under Section 147 read with Section 148 of the Act, for the Assessment Year 2014-15 vide order dated 31st March 2022. 2. The revenue has raised the following grounds of appeal:

1.

On the facts and circumstances of the case, the learned CIT(A) has erred and on facts and in law and on facts in deleting the protective addition of Rs. 20.98 lakhs made by the AO without ap

The order continues below.

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