DCIT, NEW DELHI vs. OMAX AUTOS LTD, GURGAON

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the Revenue against the order dated

10.01.2025 of the Ld. CIT(A)-29, New Delhi (hereinafter referred as Ld.

First Appellate Authority or in short Ld. ‘FAA’) in Appeals No: CIT(A),

P a g e | 2 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) Delhi-29 10556/2019-20arising out of the order dated 23.09.2022 u/s 143(3)

of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by

the ACIT, Central Circle-27 for AY: 2020-21.

Companies Act, 1956, is engaged in the business of manufacturing Auto &

Non-Auto components in India and specializes in sheet metal components,

tubular components and machined components and for the relevant

assessment year, the assessee filed return of income on 15.02.2021 declaring

income of Rs.26,89,05,610/-. The said return was selected for complete

scrutiny assessment which culminated into passing of assessment order dated

23.09.2022 issued under section 143(3) of the Income Tax Act, 1961 (the

Act'), assessing total income at Rs. 1,25,74,38,095/-.

allowed vide order dated 10.01.2025 and for which revenue is in appeal and

raised following grounds;

“1. Whether Ld. CIT(A) has erred in deleting the disallowance made on account of unverified deduction amounting to Rs. 58,16,56,473/- Ground

P a g e | 3 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 2. Whether Ld. CIT(A) has erred in deleting the disallowances on account of unexplained and unverified expenses on account of Trade advances written off amounting to Rs. 13,47,90,887/- ground. 3. Whether Ld. CIT(A) has erred in deleting the disallowances on account of unexplained and unverified expenses on account of bad debts written off amounting to Rs. 2,25,98,900/-.

all the relevant facts and only contention of ld. DR was that Rule 46A for

admitting additional evidences was not followed. Same shall be addressed at

appropriate as we intend to first consider issues and relevant evidences.

disallowanceon account of unverified deduction of Rs.58,16,56,473/-which

comprises deductions on account gain on sale of assets and written off bad

debt pertaining to diesel locomotive works Varanasi. The AO has disallowed

the deduction alleging that deduction was unverified since the AO failed to

P a g e | 4 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) substantiate the claim with document evidences. The AO observed that the

said ground had been reduced in the computation of income and reached

conclusion that the amounts had not been offered for taxation under any head

of income.

gains of Rs.48.49 cr (on sale of assets to HEMA) and Rs.9.31 cr (on sale of

assets to other parties), having been earned on sale of depreciable assets,

were reduced from the income and were offered to tax as under:

 Gain on sale of depreciable assets were reduced from / adjusted

in the block of assets in accordance with provisions of section

43(6) of the Act;  Long term capital gain on sale of land to HEMA were offered to

tax in accordance with the provision of section 45 of the Act

(explained in Ground of Appeal No. 5 infra).

following additional evidences:

 Copy of Agreement for sale of assets entered into with HEMA

P a g e | 5 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21)  Copy of Sale Deed executed with HEMA for sale of land  Copy of reconciliation of depreciable assets and other assets sold

during the year

verifying the additional documents and the submissions made by the

assessee, no adverse remark/ comments were offered on sale made toHEMA.

The assessing officer only objected to the admission of additional evidence

for not having been filed during assessment proceedings. Relevant extract of

the remand report issued on this issue is reproduced as under:

“COMMENTS OF AO 8.12 The written submission filed by the assessee as also discussed above has been perused carefully. It is seen that the assessee has submitted relevant information in form of Audited Financials of the company for AY 2020-21 and sale of the assets to HEMA are verified through the Agreement to sale dated 22.05.2019. Also, the assessee has furnished details of the transactions relating to sale of assets to other parties other than HEMA. However, the assessee has not submitted the details of sale of Plant And Machinery amounting to Rs. 9,47,68,095/- to various other parties other than HEMA as additional evidence before Ld. CIT(A). 8.13 On perusal of books of accounts/ ledgers vis-ä-vis the written submission of the assessee, and also on perusal of Audited Depreciation chart filed by the assessee for AY 2020-21, it is seen that the treatment of sale of asset has been

P a g e | 6 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21)

shown by the assessee as per the provisions of Income Tax Act. As per Income Tax provisions the profit on sale of depreciable assets are not taxable as revenue receipts, and the gross sale proceeds are required to be deducted from the WDV of the Block of asset which in this case is Buildings and Plant and Machinery. The assessee has deducted the same from the depreciation chart as appearing from the depreciation chart (as per ITR) produced above in reference to the same. 8.14 Moreover, on perusal of the assessment order, it is seen that the assessee did not file complete information and documents at time of assessment proceedings, which it has produced before the Ld. CIT(A) at time of appellate proceedings. The assessment order in the matter has been passed by stating that:

"In absence of documentary evidence as mentioned above and the noncompliance on the assessee's part it is not possible to identify whether the sale consideration of fixed assets sold by M/s Omax Autos Ltd to a company namely M/s Hema Engineering Industries Ltd has been correctly shown in books of accounts and is allowable as deduction."

8.15 Therefore, since these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities, the evidences may not be admitted." (emphasis supplied)

than HEMA, submitted that assessee did not furnish detail of sale of plant

and machinery.Accordingly, in the rejoinder to remand report filed on

13.12.2024, the assessee submitted item-wise detail of plant and machinery sold to parties other than HEMA. In the 2ndremand report dated 26.12.2024,

P a g e | 7 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) the assessing officer, after verifying the details of sale made to other parties,

categorically observed that sale was duly reflected in the books of

accounts,income arising therefrom was offered to tax, and while computing

depreciation for the purpose of the Act, the sale was duly reduced from the

WDV of the block. Though the assessing officer held that no discrepancy was

found, however objected to the admission of additional evidence for not

having been filed during assessment proceedings.

Varanasithe assessing officer denied deduction claimed in respect of bad

debts written of aggregating to Rs.35,52,770/- on the limited ground that the

appellant failed to submit details in respect of aforesaid write

offs.Accordingly, in order to rebut the allegation made and in support of its

claim, the assessee placed on record the following documents as additional

evidence:

 Copy of intimations issued by DLW for cancellation of PO;  Copy of ledger account of DLW in the books of the assessee

verifying the documents submitted and submission made, did not offer any

P a g e | 8 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21)

remarks on the claim of deduction. Relevant extract of the remand report is

reproduced as under;

"COMMENT'S OF AO 11.5 The documents submitted by the assessee as produced above, and the written submission filed by the assessee have been perused. The assessee has written of the amounts receivable from the Diesel Locomotive Works, Varanasi mentioned above. It is also seen from ledgers submitted by the assessee that the parties are debtor to whom the sales were made by the assessee. The assessee has corroborated the transaction amounting to Rs.35,51,540/- (Rs.31,95,098- Rs.4,56,442/- held with Diesel Locomotive Works, Varanasi by producing the intimation letter issued to the assessee on different dates 12.01.2018 and 27.12.2017. The assessee has furnished copies of ledgers and working of bad debts written off substantiating the same.

11.6 However, it is imperative to note that these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities. Hence, the evidences may not he admitted." (emphasis supplied)

report allowed the deduction claimed by the assesse. Thus it comes up that on

verification of the documents filed as additional evidence, the assessing

officer duly recorded that the claim of deduction was substantiated.

P a g e | 9 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 12. Even otherwise, it is a settled law that for claiming deduction for bad

debts in accordance with provisions of section 36(1)(vii) of the Act, it is not

necessary for the assessee to establish that the debt, in fact, has become

irrecoverable; it is enough if the bad debt is written off as irrecoverable in the

accounts of the assessee [refer T.R.F. Ltd. vs. CIT: 323 ITR 397 (SC); CBDT

Circular No.-12 of 2016 dated 30.05.2016].

to disallowance of trade advances written off.In the assessment order, the

assessing officer denied deduction claimed in respect of write-off of trade

advances aggregating to Rs.13,47,90,887 on the limited ground that the

appellant failed to submit details in respect of aforesaid write

offs.Accordingly, in order to rebut the allegation made and in support of its

claim, the assessee placed on record the following documents as additional

evidence:

 Copy of ledgers of Ancillary companies in the books of Appellant

showing written offentries;  Copies of declarations of the ancillary companies;

P a g e | 10 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21)  Copies of Financial Statement of the ancillary companies and

ledgers of assessee company in the books of Ancillary companies

showing writing off entries;  Copy of Ledger of Deposit showing written off entries pertaining to

DHBVN in the books of assessee company

verifying the documents submitted and submission made, did not offer any

remarks on the claim of deduction. Relevant extract of the remand report is

reproduced as under;

“COMMENTS OF AO 9.5 The documents submitted by the assessee as produced above, and the written submission filed by the assessee have been perused. The assessee has written of the toolingadvances to the ancillary entities in its books of accounts. Also, ancillary entities have recorded these transactions of written of advances received by them from assessee in their respective books of accounts, against which the ledgers and confirmation have been produced by the assessee. With regard to security advance to DHBVN, the assessee has only submitted copy of ledger of Deposit showing outstanding receivables and corresponding written off entries. 9.6 However, it is imperative to note that these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities. Hence, the evidences may not be admitted." (emphasis supplied)

the CIT(A) allowed the deduction claimed by the assessee. Thus on

P a g e | 11 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) verification of the documents filed as additional evidence, the assessing

officer duly noted that the advance was written off in the books of both, the

assessee and ancillary companies.

due to closure of plants and consequent business with ancillary companies

and was duly written off in the books of the assessee, the deduction claimed

in respect of write off of advances was rightly allowed.

account of bad debt written off. In this regard, it comes from the submissions

that when Indian Railways grant contracts/ tenders to companies, the contract

value is decided based on the value of Purchase of Order (PO). As per Indian

Railways rule, an adjustment is made on the PO price with respect to fall or

increase in the cost of raw material as per a price adjustment formula. The

assessee had entered into a contract with the Railway Board [Contract

No.RS(S)/51/2019/7701/1/11943] for manufacturing, supply and installation

of stainless steel benches. A copy of the contract is placed herewith at pages

215-236 of PB Vol. II. The said contract provides the price adjustment

formula at 'Annexure F' placed at page 234 of PB Vol.II. Thus following the

P a g e | 12 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) formula in the contract the assessee recognized the revenue on the basis of

initial PO price of Rs. 399.59 per kg of supplies to be made. However, due to

fall in the price of the raw material, the PO price was adjusted by Rs.38.97

per kg to arrive at final price of Rs. 360.62 per kg. Due to such fall in price,

the final price paid by railway was reduced, thereby resulting in short

recovery of Rs. 1.05 crores. A statement showing calculation of price

adjustment, as per formula provided in the contract entered with Indian

Railways, aggregating to Rs. 1.05 crore is placed at pages 237-242 of PB

Vol. II.

than 13% of the total), recoverable from Caparo Engineering India Pvt. Ltd.

(‘CEIPL’), it is was submitted by ld. AR that the said amount had remained

outstanding since 2009 against total billings of Rs.1,60,66,325/-.In this

regard, the assessee had repeatedly issued demand notices to CEIPL,

however, none of the notices elicited any response. Owing to the continued

non-payment, the assessee was compelled to institute a summary suit for

recovery of the said amount in May 2015. Despite pursuing the suit over

several years, the management could not secure any reasonable assurance

P a g e | 13 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) regarding the recoverability of the disputed sum. Consequently, the amount

was deemed irrecoverable and was written off in the books as bad debt. Then

recently, during FY 2023-24 CEIPL and assessee agreed to a full and final

settlement of the recovery matter and accordingly CEIPL paid Rs.21,00,000/-

to the assessee. This was duly recognized as 'other income' in the books of

accounts for the current year and offered to tax under section 41(4) of the Act

in the return of income for AY 2024-25. A copy of the Settlement Order

dated 08.08.2023 passed by the Court along with ledger in the books of

accounts showingthe recovered amount as Rs.21,00,000/- as 'other income' is

placed at pages 268-269 of PB Vol. Il.

respect to the above two companies comprises nearly 60% of the total write-

offs. As for the remaining parties, the debts were long outstanding and were

no longer recoverable from the customers.Accordingly, since the debts were

no longer recoverable, the assessee wrote off the aforesaid debts in its books

of accounts and claimed a deduction of Rs.2,25,98,900 in the computation of

income.

P a g e | 14 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 22. We find that in the assessment order, the assessing officer disallowed the deduction of bad debts on the limited ground that the assessee failed to furnish details and documentary evidences in respect of the aforesaid expenses.In order to rebut the aforesaid argument and support its claim, the assessee during the appellate proceedings, furnished the following document as additional evidence;

 Copy of Contract No. RS(S)/51/2019/7701/1/11943 entered between assessee and Railway Board, Government of India for manufacturing supply and installation of stainless steel benches;  A statement showing calculation of price adjustment, as per formula provided in the contract entered with Indian Railways, aggregating to Rs. 1.05 crore;  Copies of invoices issued by the assessee to Indian Railways Board on sample basis;  Copy of Ledgers showing written off entries with various vendors of Indian Railways;  Copy of Settlement order dated 08.08.2023 passed by the Court in favour of the assessee along with screenshot of entry in the books of

P a g e | 15 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) accounts showing the recovered amount as Rs. 21,00,000/- as 'Misc

Reciept Income';  Copy of bad debt calculation sheet and screenshot of writting off

entries of Rs. 2.25crores in the books of assessee;  Copy of Ledgers of all the vendors, in the books of accounts of the

assessee, showing the outstanding receivables and corresponding

entryies) of written off.

verifying the additional documents and the submissions made by the

assessee, did not offer any adverse remark/comment as under;

"COMMENTS OF AO

10.6 The documents submitted by the assessee as produced above, and the written submission filed by the assessee have been perused. The assessee has written off the amounts receivable from the entities 14 entities as mentioned above. It is also seen from ledgers submitted by the assessee that the parties are debtors to whom the sales were made by the assessee. The assessee has corroborated the major transactions held with Indian Railway Board and Coparo Engineering India Pvt. Ltd. by producing the agreement executed with Railway Board and relevant court order in case of Coparo Engg. India Pvt. Ltd. The

P a g e | 16 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) assessee has furnished only copies of ledgers and working of debts written off of all the other parties in support of the same.

10.7 However, it is imperative to note that these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities. Hence, the evidences may not be admitted." (emphasis supplied)

the CIT(A) allowed the deduction claimed by the assessee. It can be

appreciated that on verification of the documents filed as additional evidence,

the assessing officer did not offer any adverse remarks on the claim of

deduction.

and were duly written off in the books of the assessee, the deduction claimed

in respect of write off of advances was rightly allowed.

inventory written off. Ld AR has submitted that due to the commercial

unfeasibility of both the Speedomax Unit and Sprocket Unit, the assessee was

constrained to close the aforesaid two plants/units that were exclusively

P a g e | 17 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) manufacturing for HMCL.However, some of the stock that was made as per

the specifications of HMCL had become unsaleable as the same could not

have been sold to HMCL in view of the non-compete agreement with

HEMA. Such inventory could also not have been sold to other customers

since it was being manufactured as per the specification of the products of

HMCL. As a result, the said stock was realizable at a price less than its cost

price.Accordingly, in compliance with IND AS 2, the management of the

assessee-company recognized the unrealizable loss of Rs.4,25,00,000/- (being

approximately 75% of the stock value) accrued to the assessee on the basis of

management estimate of inventory relating to theaforesaid two units lying in

the inventory. Details of inventory written off is placed here before us at

pages 725-749 of PB Vol. III.

claimed on account of inventory write off on the limited ground that the

assessee failed to furnish details and documentary evidences in respect of the

aforesaid expenses.In order to rebut the aforesaid argument and support its

claim, the assessee during the appellate proceedings, furnished the following

document as additional evidence:

P a g e | 18 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21)  Detail of inventory written off/ recorded at realizable value

verifying the additional documents and the submissions made by the

assessee, did not offer any adverse remark/ comment as under:

“COMMENTS OF AO

13.4 On perusal of the documents like quotations from the vendors provided by the assessee, it is seen that the assessee has taken the inventory at market value/ realizable value or Cost whichever is lower. The loss was recorded pursuant to closure of plant/ units such loss was reduced from the Profits from sale of Plant & Machinery, building to HEMA and was forming part of 'Net Exceptional Income' of Rs.39,57,50,000/- which is recorded in the computation produced in preceding paras. It is also verified from the tax audit report that the assessee has been following the same accounting policy and the same has not been challenged in any assessment year by the revenue.

13.3 However, it is imperative to note that these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities. Hence, the evidences may not be admitted.”

P a g e | 19 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 29. On a consideration of the aforesaid, itcan be appreciated that after due

verification of the documentfiled as additional evidence and detailed

submissions made, the assessing officer did not draw any adverse inference

thereby accepting the correctness of the claim of the assessee.

in accordance with IND AS 2 which provided for recording of inventory at

the cost or net realizable value, whichever is lower. In the present case, since

the inventory, having been manufactured as per the specification of HMCL,

could not be easily sold to other vendors, the same was recorded at net

realizable value.

account of LTCG on sale of land. In the assessment order, the assessing

officer however, reduced the book value of 'building" amounting to Rs.

35,21,652/-, from total sales consideration of Rs. 10.36 crores to arrive at the

sale consideration of Rs. 10 crores pertaining to land. Ld. AR has submitted

that the assessing officer failed to appreciation that the consideration payable

in respect of sale ofland was duly adjusted in the WDV of the block of asset.

In deed such action of the assessing officer in attributing higher sales

P a g e | 20 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) consideration towards the sale of land, to the extent it has already been

reduced from the Building's block of asset by the assessee, leads to double

taxation of the said amount, both as capital gain and reduced claim of

depreciation.If the assessing officer had any doubt on the value of sale

consideration attributable to the land by the assessee while calculating the

returned capital gain on the sale of land, the assessing officer must have

exercised the power of referring the valuations to the Valuation Officer.

However, in the facts of the present case, the assessing officer made no such

reference and an arbitrary value was assigned to sale consideration

attributable to land.

report obtained from registered valuer showing the respective fair market

values) of Land and Building sold during the year consideration (available at

pages 776-781 of PB Vol III.

verifying the valuation report issued by the registered valuer, did not offer

any adverse remark/ comment as under:

“COMMENTS OF AO

P a g e | 21 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 14.6 On perusal of books of accounts/ ledgers vis-a-vis the written submission of the assessee, and also on perusal of Audited Depreciation chart filed by the assessee for AY 2020-21, it is seen that the treatment of sale of asset has been shown by the assessee as per the provisions of Income Tax Act. Moreover, as per Income Tax provisions the profit on sale of depreciable assets are not taxable as revenue receipts and the gross sale proceeds amounting to Rs.3.21 Crores was required to be deducted from the WDV of the Block of asset which in this case is Buildings. The details of the same have been discussed and the chart has been produced in the preceding paras of this report in reference to the same.

14.7 It is also observed that the valuer valued the land at Rs. 7.14 crore and building at Rs.3.21 crore dated 04.04.2019, the sale consideration against sale of building is to be reduced from block of assets which the assessee has reduced in the depreciation chart, and the profit from sale of land has been shown as Long Term Capital Gain by the assessee in computation itself. Further, it is also verified from the Tax Audit Report that that the block of building as on closing of year, i.e. 31.03.2020 was Rs. 28,99,39,670/- which is after sale of building Rs.3.21 crores.

14.8 However, it is imperative to note that these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities. Hence, the evidences may not be admitted.”

P a g e | 22 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 34. Thus it only following the aforesaid observations made in the remand

report, the CIT(A) allowed the deduction claimed by the assesse as in the

remand report, the assessing officer has accepted the claim of the assessee.

assessee for the purpose of negotiating the sale price of the property and for

calculating capital gains thereon on the basis of report of certified

valuer/expert must be accepted and no addition can be made without raising

any doubts on the genuineness of the said report or referring the matter to the

Valuation Officer [refer CIT vs. Ajax Products Ltd. [1965] 55 ITR 741 (SC);

PCIT vs. Cinestaan Entertainment Pvt. Ltd. [ITA 1007/2019& CM APPL.

54134/2019] (SC); CIT vs. Bharti Cellular Ltd. [2010] 330ITR 239 (SC).

cost expenses. During the year under consideration, the assessee requested its

bank(s) to issue various bank guarantees to lenders including the Pradeshiya

Industrial & Investment Corporation of U.P.Limited (PICUP) which granted

assessee interest free loan] and other businesses.To provide such guarantees,

banks charged the assessee with bank guarantee fee besides other banking

P a g e | 23 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21)

charges. Copy of statement showing the details of expenditure incurred under

the head of other borrowing cost is provided at pages 782-785 of PB Vol. III.

Consequently, the assessee incurred expenditure on account of other

borrowing costs of Rs. 86.90Lakhs and the same was recorded in the Audited

Financial Statements under the head 'Finance Cost'. A breakup of the

aforesaid expense is filed as under:

Sr. No. Particulars Amount 1 Paid bank guarantee charges to IndusInd Bank through 31,87,434 current bank account No. 650014031420 for providing bank guarantee to PICUP 2 Paid bank guarantee charges for providing bank guarantee 28,17,525/- to other lenders/creditors 3 Bank charges paid to HDFC bank & Indian Bank 26,84,928/- Total 86,89,887/-

Copy of the aforesaid bank charges in the ledger account in the books of the

assessee is filed at pages 786-850 of PB Vol. III. Further, copy of the relevant

extract of the bank statement highlighting the debit entries of bank charges/

fees paid by the assessee is filed at pages 851-946 of PB Vol. III.

claimed on account of other borrowing costs on the sole ground that the

P a g e | 24 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) assessee failed to furnish details and documentary evidences in respect of the

aforesaid expenses.In order to rebut the aforesaid argument and support its

claim, the assessee during the appellate proceedings, furnished the following

document as additional evidence:

 Copy of relevant extract of the bank statement highlighting the

debit entries of bank charges/ bank guarantee fee paid by the

assessee company.

the bank guarantee charges could not be verified:

COMMENTS OF AO

15.5 In support of this issue the assessee has filed bank statement only, however, payments to bank for providing bank guarantees of its lenders/ foreign creditors and bank charges incurred against routine banking transactions cannot be verified from the complete bank statements as same are not apparent from narrations. Therefore, same remains un-verified.

15.6 Also, it is imperative to note that these details were not submitted by the assessee at the time of assessment proceedings even after being provided with sufficient opportunities.Hence the evidences may not be admitted.”

P a g e | 25 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) Omax Autos Ltd.(AY: 2020

on record copies of ledger account of bank charges acc on record copies of ledger account of bank charges accounts totaling to ounts totaling to

Rs.86,90,000. Thus in the 2nd n the 2nd remand report dated 26.12.2024, the assessing remand report dated 26.12.2024, the assessing

officer, after verifying the details submitted, did not offer any adverse officer, after verifying the details submitted, did not offer any adverse officer, after verifying the details submitted, did not offer any adverse

remarks on the claim of the assessee. Relevant extracts of the 2nd remand remarks on the claim of the assessee. Relevant extracts of the 2nd remand remarks on the claim of the assessee. Relevant extracts of the 2nd remand

report are reproduced as under: report are reproduced as under:

P a g e | 26 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) 40. Thus it is only after following the aforesaid observations recorded in

the remand reports), the CIT(A) allowed the claim of the assesse after AO

filed second report verifying the documents submitted in support of the claim

and the assessing officer was satisfied with the correctness of the deduction

claimed inasmuch as no remarks were offered.

incurred for the purpose of business is a revenue expenditure and is allowable

as a deduction [refer CIT vs. Sivakami Mills Ltd. (1993) 11 SCC 283;

Haryana State Road & Bridges Development Corporation Ltd. vs. CIT,

Panchkula [2016] 75 taxmann.com 104; J. K. Synthetics Ltd. vs.

Commissioner of Income-tax2015] 55 taxmann.com 254 (Allahabad);

Vikram Mills Ltd. vs. Commissioner of Income-tax[1999] 107 Taxman 344

(Gujarat); L & I SUCG JV CC 27 vs. Additional Commissioner of Income-

tax [2019] 109 taxmann.com 529 (Delhi - Trib.)].

non-compliance of Rule 46A and his reliance on the decision of CIT vs.

Kanpur Coal Syndicate (1964) 53 ITR 225 to contend that where a

P a g e | 27 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) mandatory requirement of Rule 46A are not complied the order ld. First

Appellate Authority is vitiated and that principle of judicial discipline and

non acceptance of additional evidence without examination leads to make the

impugned order of CIT(A) erroneous has no substance. Our observation on

the basis of extensive submissions raised by the ld. AR is that AO was given

all the reasonable opportunity to address the additional evidences and before

us not an iota of facts are cited which would show that any of the evidences

filed as additional evidences needed any other form of verification and

remand report was insufficient to let ld. CIT(A) consider the issue and give

conclusive findings.

appeal of revenue is dismissed.

Order pronounced in the open court on 14.01.2026

Sd/- Sd/- (Amitabh Shukla) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 14.01.2026 Rohit, Sr. PS

P a g e | 28 ITA No.3055/Del/2025 Omax Autos Ltd.(AY: 2020-21) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI