DCIT Vs Cable Corporation of India Limited (ITAT Mumbai)
Bogus addition can’t rest on shaky confession alone: ITAT rejects transport expense disallowance based solely on retracted third-party statement
Mumbai ITAT in a batch of Revenue appeals in dismissed all appeals of Revenue & upheld deletion of additions towards alleged bogus transport expenses. AO had made additions (₹3.41 crore for AY 2018-19 & similar additions in other years) solely on the basis of statements of a third party transporter, Shri Pradip Udeshi, recorded during search, alleging accommodation billing without actual delivery of goods. Tribunal noted that such statements were repeatedly retracted & were not supported by any corroborative material. Assessees had produced extensive documentary evidence including invoices, transport receipts, delivery challans, vehicle details, insurance documents, GST records, Form-402, & proof of corresponding sales, which AO failed to rebut or even properly examine. ITAT held that undisclosed income or bogus expenditure cannot be sustained merely on the basis of retracted third-party statements without independent corroboration, especially when sales are accepted & movement of goods is evidenced. Relying inter alia on Delhi HC ruling in PCIT vs Pavitra Realcon (P) Ltd., Tribunal reaffirmed that statements u/s 132(4) are only information & cannot, by themselves, justify additions. Accordingly, additions were rightly deleted by CIT(A) & all Revenue appeals were dismissed.
