DCIT, DELHI vs. AIR CHARTER SERVICES PVT. LTD., DELHI

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-29, Delhi (hereinafter referred to as 'the CIT(A)') dated 22.08.2024, for assessment year 2018-19.

The solitary issue raised by the Revenue in appeal is against deleting of disallowance of expenditure u/s. 37 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) to the tune of Rs.2,27,93,362/- by the Act.

Shri Javed Akhtar, representing the department submits that the assessee had shown credit outstanding in the name of eight parties aggregating to (AY 2018-19) Rs.2,27,93,362/-. The assessee failed to prove genuineness of the expenditure in assessment proceedings, hence, the Assessing Officer (AO) made addition of the aforesaid amount holding creditors as bogus. In First Appellate proceedings, the CIT(A) deleted the addition without appreciating the fact that the AO had made sufficient enquires before holding creditors as non genuine. The ld. DR prayed for reversing findings of the CIT(A) and upholding the disallowance.

We have heard the submissions made by ld. DR and have examined the material available on record, including orders of the authorities below. The assessee is engaged in the business of providing Air Charter Services under ‘non scheduled operator permit’ issued by Director General of Civil Aviation. The service provided by the assessee also includes services of Air Ambulance to patients and Super Specialty Hospitals. During the period relevant to assessment year under appeal, the assessee had shown credit outstanding in the name of eight parties providing aircraft operation services to the assessee including provision of catering, crew, hospitality, etc. The list of parties who provided services to the assessee and against whom the amounts were shown credit outstanding is as under:-