ITO Vs Manilal Bhamjibhai Shah (ITAT Ahmedabad)
Alleged Bogus Freight Receipts from Electrotherm: ITAT Upholds Deletion of ₹3.52 Crore Addition u/s 69
The Ahmedabad Bench of the ITAT dismissed the Revenue’s appeal challenging deletion of an addition of ₹3.52 crore made under section 69 on account of alleged undisclosed freight income. The assessee, engaged in transport business, was alleged to be a beneficiary of bogus transportation charges booked by M/s Electrotherm India Ltd., based on information from the Investigation Wing.
The Tribunal noted that the Revenue failed to bring any material on record to prove that the assessee had actually received any freight payments from M/s Electrotherm India Ltd. or that the assessee had claimed credit for TDS allegedly deducted by the said company. In the absence of evidence of receipt of income, the mere existence of third-party information or TDS entries was held to be insufficient to sustain the addition.
While upholding the deletion made by the CIT(A), the ITAT observed that the Revenue is at liberty to independently examine whether any TDS credits or fund movements exist in relation to the assessee’s old PAN or any related concerns, and to take action in accordance with law if warranted. Consequently, the Revenue’s appeal was dismissed
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
