Virtual Global Education Ltd. Vs ACIT (ITAT Delhi)
ITAT Delhi held that adhoc addition purely based on the guess-work and surmises is untenable in law. Accordingly, order set aside and assessment restored back to the file of AO for fresh assessment.
Facts- The assessee filed its return of income through e -mode on 28.09.2015, declaring income of INR 32,23,630/-. Thereafter, the case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 was issued on 17.03.2016 and served upon the assessee. In response to the statutory notices, Authorized Representative (“AR”) of the assessee attended the assessment proceedings. AO after providing due opportunity to the assessee, made addition of INR 3,74,08,810/- on the basis that the assessee could not explain and produce books of accounts alongwith supporting evidences. It is noted by the AO that the assessee was asked to explain on 28.12.2017 but no one appeared on behalf of the assessee and accordingly, 30% of total expenses of INR 12,46,96,031/- i.e. INR 3,74,08,810/ – was added back to the income of the assessee and assessed the income of the assessee u/s 143(3) of the Act vide assessment order dated 28. 12.2017 at INR 4,06,32,440/-.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
