INCOME TAX OFFICER, RAIPUR vs. VARDA ENERGY AND ENGINEERING PVT. LTD., RAIPUR

ITA 11/RPR/2024Status: DisposedITAT Amritsar25 September 2026AY 2018-1917 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A)/NFAC, dismissing all grounds raised by the Revenue. Regarding the alleged bogus purchases (Issue 1), the Tribunal found that the assessee had furnished financial statements, VAT returns, ledgers, confirmations, invoices with vehicle details, and had duly paid VAT and deducted TDS. The Tribunal found no infirmity in the CIT(A)'s deletion of the addition. Concerning the share application money (Issue 2), the Tribunal noted that the assessee had submitted all necessary documentary evidence to substantiate the identity, creditworthiness, and genuineness of the transaction. The Tribunal held that the assessee discharged its onus, and the AO failed to disprove the transaction. For the agricultural income (Issue 3), the Tribunal observed that the assessee provided details of land holdings, production, sales, and expenses, and the CIT(A) had found that the assessee grew and sold maize seed, not maize crop, justifying the higher price. The Tribunal found no infirmity in the CIT(A)'s deletion of the addition, as no contrary material was brought forth by the Revenue. The assessee's legal grounds were dismissed as not pressed.

What were the facts?

The Revenue has appealed against the order of the CIT(A)/NFAC for Assessment Year 2018-19. The assessee, Varda Energy and Engineering Pvt. Ltd., filed its return declaring an income of Rs. 63,290/-. The Assessing Officer (AO) initiated reassessment proceedings under Section 147, alleging bogus purchases of Rs. 2,12,85,000/- from M/s Mega City Trade Link and Rs. 1,78,50,000/- from M/s Goldwright Vyapar Pvt. Ltd., and an accommodation entry of Rs. 20,00,000/- from M/s Saloni Buildtech Pvt. Ltd. The AO also questioned the agricultural income of Rs. 14,56,420/- claimed as exempt. The AO made additions totaling Rs. 4,26,13,530/-. The CIT(A)/NFAC deleted all these additions.

What were the issues?

1. Whether the addition of Rs. 3,91,35,000/- on account of alleged bogus purchases from M/s Mega City Trade Link and M/s Goldwright Vyapar Pvt. Ltd. is sustainable under Section 68 of the Income Tax Act, 1961. - Assessee's contention: The transactions were properly recorded, routed through bank accounts, VAT was paid, and TDS was deducted. The assessee furnished financial statements, VAT returns, ledgers, confirmations, invoices, and details of vehicles. - Revenue's contention: The suppliers were found to be issuing fraudulent GST invoices, not filing ITRs regularly, and had no real income, indicating they were used for accommodation entries. 2. Whether the addition of Rs. 20,00,000/- as unexplained credit from M/s Saloni Buildtech Pvt. Ltd. for share application money is sustainable under Section 68 of the Income Tax Act, 1961. - Assessee's contention: The assessee provided all necessary documentary evidence substantiating the identity, creditworthiness of the share applicant, and genuineness of the transaction. The onus shifted to the AO to disprove it. - Revenue's contention: The investor, M/s Saloni Buildtech Pvt. Ltd., was a shell company, and its director, Mr. Raju Malik, admitted to being a cash handler and providing accommodation entries. 3. Whether the addition of Rs. 14,15,237/- on account of alleged excess agricultural income is sustainable under Section 68 of the Income Tax Act, 1961. - Assessee's contention: The assessee produced details of land holdings, ownership documents, production figures, sales, and expenses, and claimed to have grown and sold maize seed, which has a higher price than the crop. - Revenue's contention: The claimed yield and sale rate were higher than the prevailing market rates, and the agricultural income was inflated.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(1)(a),Section 147,Section 148A(d),Section 148,Section 131,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI R.K. PANDA, VICE- & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Sunil Kumar Agrawal, CA, Ms. Vidya Verma, Advocate
For Respondent: Mr. Rituparna Namdeo, CIT-DR
Hearing: 04.08.2026Pronounced: 25.09.2026

PER R.K. PANDA, VP This appeal filed by the Revenue is directed against the order dated 24.11.2023 passed by the Ld.CIT(A)/NFAC, relating to assessment year 2018-19. 2. Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of trading of iron and steels. It filed its original return of income on 29.09.2018 declaring total income at Rs.63,290/-. The return was p

The order continues below.

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