Richa Global Exports Private Limited Vs DCIT (ITAT Delhi)
ITAT Delhi Deletes Disallowance of ₹47 Lakh Cash Salary Payments Due to Sufficient Evidence Backed by Proper Documentation; Assessee Wins Appeal as ITAT Delhi Accepts Proof of Identity in Cash Salary Dispute; Tribunal Accepts Cash Salary Paid Without PAN: Important ITAT Delhi Ruling for Employers; ITAT Delhi Accepts Salary Registers and Labour Welfare Contributions as Valid Evidence
The Income Tax Appellate Tribunal (ITAT) Delhi, in the case of Richa Global Exports Private Limited Vs DCIT, has ruled in favor of the assessee by deleting the disallowance of RS. 47,08,603 in salary and wages paid in cash. The Assessing Officer (AO) had made the disallowance on the grounds that the company failed to furnish the PAN or other identity details for these employees, making the genuineness of the expenses unverified. However, the ITAT found that the assessee had, in fact, submitted a wage register detailing the employees and the amounts paid, as well as quarterly returns filed with the Punjab Labour Welfare Fund Act. These documents were presented to both the AO and the Commissioner of Income Tax (Appeals), but were not considered properly.
The tribunal’s decision highlighted that both the AO and the CIT(A) had failed to take these crucial documents into proper perspective and had made a routine disallowance. Furthermore, the ITAT noted that in the company’s own case for previous assessment years (2013-14, 2014-15, 2016-17), no such disallowance for employee benefit expenses had been made. The tribunal concluded that the disallowance was arbitrary and erroneous given the evidence provided by the assessee. By accepting the documentation as proof of the expenses’ genuineness, the ITAT deleted the addition, allowing the company’s appeal.
