APARAJITA HOMES PVT LTD,NEW DELHI vs. ACIT,CENTRAL CIRCLE-2, NEW DELHI

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ITA 1991/DEL/2022Status: DisposedITAT Delhi19 October 2023AY 2016-17Bench: SHRI G.S. PANNU, HON’BLE (President), SHRI CHANDRA MOHAN GARG (Judicial Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was not sustainable as the impugned amount represented income earned by the assessee and was already offered to tax. Since the income was part of the profit and loss account and reflected in the audited books, a further addition as unexplained investment was not required.

What were the facts?

The assessee offered commission income in its profit and loss account and reflected it in its audited financial statements. The Assessing Officer made an addition of Rs. 11,28,545/- on account of unexplained expenditure, which was confirmed by the CIT(Appeals).

What were the issues?

Whether an addition can be made on account of unexplained expenditure when the amount in question is income already offered to tax by the assessee and reflected in its audited financial statements.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI

Before: SHRI G.S. PANNU, HON’BLE & SHRI CHANDRA MOHAN GARG

For Appellant: Shri Salil Aggarwal, Sr. Adv. &, Shri Shailesh Gupta, CA
For Respondent: Shri Zafarul Haque Tanweer, CIT DR
Hearing: 04.10.2023

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & 1991/Del/2022 Assessment Years: 2015-16 & 2016-17 Aparajita Homes Pvt. Ltd., Vs. ACIT A-410, Ansal Chamber-1, Central Circle-2, R.K. Puram, South West Delhi, Jhandewalan Extn., New Delhi. New Delhi. PAN No. AAHCA 4557 C Appellant Respondent Assessee by Shri Salil Aggarwal, Sr. Adv. & Shri Shailesh Gupta, CA Revenue by Shri Zafarul Haque Tanweer, CIT DR Date of hearing: 04.10.2023 Pronouncement on 19.10.2023 O R D E R PER C.M. GARG, J.M.

These two appeals are filed by the assessee against the order of the Ld. CIT(Appeals)-31, New Delhi dated 17.05.2022 for the assessment years 2015-16 & 2016-17 respectively.

2.

Since as agreed by ld. Senior counsel as well as ld. CIT(DR) that facts and circumstances of both the years under consideration are identical and similar on the sole issue for adjudication. Therefore we are taking up ITA n. 1990/Del/2022 for AY 2015-16 as lead case, wherein following grounds have been raised by the assessee. 1. “That having regard to the facts and circumstances of the case and in law the addition of Rs.11,28,545/- confirmed by Ld. Commissioner of Income Tax (Appeals) on account of unexplained expenditure is arbitrary, against law and facts on record and is not sustainable on various legal and factual grounds.

2. That on the facts and circumstances of the case and in law the Ld.CIT(Appeals) while confirming the above addition arbitrarily and, mechanically rejected the explanation and ignored the fact that the addition of Rs.11,28,545/- are related to income earned and the income so earned forms part of return of income and as such the addition so confirmed is incorrect and is not sustainable. & 1991/Del/2022

3. That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other.”

3. The ld. Senior Counsel submitted that having regard to the facts and circumstances of the case and in law the addition of Rs.11,28,545/- confirmed by Ld. Commissioner of Income Tax (Appeals) on account of unexplained expenditure is arbitrary, against law and facts on record and is not sustainable on various legal and factual grounds. He further contended that on the facts and circumstances of the case and in law the Ld.CIT(Appeals) while confirming the above addition arbitrarily and, mechanically rejected the explanation and ignored the fact that the addition of Rs.11,28,545/- are related to income earned and the income so earned forms part of return of income and as such the addition so confirmed is incorrect and is not sustainable.

4. The ld. Senior Counsel also pointed out that from the perusal of 26AS it may be observed that transactions mentioned at serial no 8, 9 & 12 are part of Form no. 26AS of the appellant company for AY 2015-16 and transaction mentioned at serial no. 13 is part of 26AS for AY 2016-17. He further submitted that the profit and loss account of the appellant for AY 2015-16 & 2016-17 as per which commission income is part of income as per Profit and Loss A/c which is available at pages 3 to 14 of assessee paper book in the audited balance sheet for both the years. The ld. Senior Counsel vehemently pointed out that the alleged transaction is related to income earned by the appellant company which has already been offered to tax and as such the ld. Assessing Officer wrongly made the addition of Rs. 11,28,545/- and as such the same may please be deleted.

5. Replying to the above the ld. CIT(DR) supported the orders of the authorities below and submitted that the Assessing Officer has rightly made addition which upheld by the ld. CIT(A) on sound sustainable reasoning. However he did not controvert a factual position that the impugned amount is part of income as profit & loss account which is part of audited books of account and balance sheet in consolence with the 26AS for both the years.

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