KOHLI BROTHERS,KAROL BAGH, NEW DELHI vs. INCOME TAX OFFICER, WARD 51(4), NEW DELHI, PRATYAKSH KAR BHAWAN, CIVIC CENTRE, J.L. NEHRU MARG, NEW DELHI

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ITA 999/DEL/2024Status: DisposedITAT Delhi27 August 2025AY 2015-2016Bench: Sh. Satbeer Singh Godara (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal acknowledged that the assessee did not press the issue regarding the rejection of accounts, given the NP rate remained the same. Other issues like rent disallowance and bad debts were allowed based on the precedent that once books are rejected, further disallowance of revenue expenditure is not permissible.

What were the facts?

The assessee appealed an order related to Assessment Year 2015-16, arising from proceedings under Section 143(3) of the Income Tax Act. The primary issue involved the rejection of the assessee's books of accounts.

What were the issues?

Whether the rejection of assessee's books of accounts under Section 145(3) was valid and if further disallowances could be made for revenue expenditure after rejection.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 145(3)

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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

For Appellant: Adv. &, Ms. Tabbassum Firdause, Adv
Hearing: 27.08.2025Pronounced: 27.08.2025

ORDER This assessee’s appeal for Assessment Year 2015-16, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1059508087(1) dated 09.01.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

Coming to the first and foremost issue between the parties regarding rejection of the assessee’s books of accounts u/s 145(3) of the Act, learned counsel wishes is not to press for the same after vehement arguments for the reason that the NP rate remains the same before and after the above rejection. Rejected accordingly subject to a rider that the same shall not

4.

Now coming all the remaining issue between the parties i.e. rent disallowance, bad debts disallowance and alleged personal expenditure etc. involving varying sums. The Revenue could hardly dispute that once the assessee’s books of accounts have been rejected, no such revenue expenditure claim could be further disallowed going by Indwell Construction Vs. CIT (1998) 232 ITR 776(AP). Allowed accordingly.

5.

No other grounds or argument has been pressed.

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