ACIT Vs Ramit Vohra (ITAT Delhi)
In the case before the Income Tax Appellate Tribunal Delhi, the Revenue challenged the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2009–10, primarily on the ground that additional evidence was admitted in violation of Rule 46A of the Income Tax Rules, 1962, and that several additions made by the Assessing Officer (AO) were wrongly deleted.
The AO had completed the assessment under Section 144 of the Income Tax Act, 1961 (best judgment assessment) due to repeated non-compliance by the assessee. Despite multiple notices and opportunities, the assessee failed to produce books of account, confirmations of creditors, supporting bills, and other relevant documents. Notices issued under Sections 142(1) and 143(2) were either not complied with or resulted in adjournments without adequate follow-up. The AO concluded that the assessee had deliberately avoided scrutiny and failed to maintain proper books as required under Section 44AA.
On this basis, the AO made several additions, including disallowance of bogus purchases (1% of total purchases), addition of unexplained sundry creditors under Section 68, unexplained capital introduction, unexplained investment in fixed assets under Section 69, disallowance of depreciation, deemed dividend under Section 2(22)(e), and estimation of income from house property. The AO also disallowed certain expenses and interest on housing loans, treating them as non-business expenditure. The AO justified these additions based on inconsistencies in financial statements, such as a sharp decline in sundry creditors despite increased purchases, non-verifiable transactions, and failure to provide supporting evidence. The AO relied on the principle of preponderance of probabilities and the powers available under best judgment assessment, emphasizing that precise proof is not required where the assessee fails to cooperate.
