ACIT-CENTRAL CIRCLE, AGRA vs. M/S GHANARAM INFRAENGINEERS PVT. LTD., NEW DELHI

ITA 325/AGR/2025Status: DisposedITAT Agra16 October 2026AY 2019-2035 pages
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What were the facts?

The assessee, M/s Ghanaram Infraengineers Pvt. Ltd., is in appeal before the Income Tax Appellate Tribunal (ITAT) against orders of the CIT(A) that dismissed its appeals. The appeals pertain to Assessment Years (AY) 2019-20, 2020-21, 2021-22, and 2022-23. A search and seizure operation was conducted on the assessee's premises on August 3, 2022. Subsequently, a notice under Section 148 was issued. The Assessing Officer (AO) observed that the assessee offered for cessation under Section 41(1) of the Income Tax Act, 1961, amounts of Rs. 90,00,00,000/- in AY 2021-22 and Rs. 157,59,76,900/- in AY 2022-23, constituting a significant portion of its sundry creditors. The AO noted a lack of basic details for these creditors and concluded they were bogus. The AO made additions of Rs. 21,06,74,183/- for bogus sundry creditors and disallowed 5% of aggregated expenses amounting to Rs. 10,05,92,049/-. An additional sum of Rs. 10,08,70,000/- was added as undisclosed income from sand mining. The CIT(A) deleted the additions related to bogus sundry creditors and disallowance of expenses but confirmed the addition for sand mining.

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) did not err in deleting the addition of Rs. 21,06,74,183/- made on account of sundry creditors. The Tribunal noted that the assessee had itself offered the entire Rs. 157.59 crore in its return for AY 2022-23. It was held that the Income Tax law does not permit double taxation of the same income. Citing Galaxy International Overseas, the Tribunal stated that an addition in an earlier year should be deleted if the sum is offered in a later year's return to avoid double taxation. The principle of consistency was applied, noting that expenses were accepted in prior assessments and correlated with recognized project income. The Tribunal agreed with the assessee that the liabilities were offered for taxation in the correct year (AY 2022-23) as per Section 41(1), as the benefit of remission was derived in that year. The AO's re-characterization of creditors as non-genuine was not supported by sufficient evidence. The Tribunal directed that Rs. 157.59 crore be treated as the appellant's income for AY 2022-23 on a substantive basis, making the AO's protective assessment stance unwarranted. Regarding the addition of Rs. 10,05,92,049/- (5% of aggregated expenses), the Tribunal noted that the Ld. CIT(A) had given benefit to the assessee by treating sundry creditors as genuine. However, since the issue related to the genuineness of sundry creditors was set aside by the Tribunal, this issue was also set aside to the AO for fresh determination, subject to the outcome of his findings on the liabilities of sundry creditors. The appeals were allowed for statistical purposes.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 21,06,74,183/- made on account of sundry creditors, which were found to be non-genuine, after the Assessing Officer recategorized them, considering that the assessee offered them as ceased liability under Section 41(1) in later assessment years, and failed to provide basic details like Name, PAN, Address, and nature of services/goods, thereby failing to establish identity, creditworthiness, and genuineness of transactions. 2. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 10,05,92,049/- made on account of disallowance of 5% of total expenditure claimed, given that if sundry creditors are bogus, the revenue and trading expenses associated with them cannot be allowed in toto, as the assessee failed to establish the identity of the counterparty and genuineness of transactions. Assessee's Contentions: Relied on the principle of consistency, past assessments accepting trading results, and the legal presumption under Section 292C that seized books of account are true and correct unless proven otherwise. Argued that the AO did not provide evidence to rebut the genuineness of underlying expenses and that suspicion or age of creditors is not proof. Cited Pr. CIT v. Chawla Inter-Build Constr. Co. Pvt. Ltd. and Galaxy International Overseas. Also relied on Lalji Haridas (SC) regarding the rightful year of taxation and Commissioner Of Income Tax vs Pancham Dass Jain (Allahabad High Court) for purchases made on credit. Contended that the liabilities were offered for taxation in AY 2022-23 as per Section 41(1). Revenue's Contentions: Argued that the Ld. CIT(A) erred in deleting the addition of Rs. 21,06,74,183/- on account of bogus sundry creditors, as they were found to be non-genuine and the assessee failed to provide basic details. Contended that the AO's action to tax them in the relevant assessment year after recategorization was justified. Also argued that if creditors are bogus, associated expenses cannot be allowed in toto. The judgment does not record specific contentions for the revenue on the disallowance of expenses.

Which sections of the Income-tax Act were involved?

Section 132,Section 148,Section 143(2),Section 142(1),Section 41(1),Section 147,Section 143(3),Section 292C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA(DB

Before: SUNIL KUMAR SINGH & BRAJESH KUMAR SINGH

For Appellant: Shri Kalrav Mehrotra, Adv. & Shri
For Respondent: Ms. Sangeeta Yadav, CIT DR
Hearing: 21.07.2026Pronounced: 16.10.2026

PER:BENCH The facts and issues involved in these appeals are identical, hence, for the sake of convenience and brevity, these appeals are being decided by this common order. Only the facts of ITA No. 325/Agr/2025 are bei

The order continues below.

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