Home Developers Project Pvt. Ltd. Vs DCIT (ITAT Delhi)
The case of Home Developers Project Pvt. Ltd. Vs DCIT (ITAT Delhi) has ignited a significant debate over the sustainability of tax additions based merely on estimations, without rejecting the books of accounts. The detailed order by ITAT Delhi provides critical insights into the matter.
Background:
- The issue arises from an order dated 05.10.2018 for the A.Y. 2012-13 by CIT(A)-26, New Delhi.
- The Assessee filed a return on 28.09.2012, declaring Nil income.
Primary Grievances:
- Addition of Rs. 3 crores under Section 68 of the Income Tax Act: The Assessing Officer (AO) made this addition based on a statement from a person named Himanshu Verma, alleged to be an entry operator. This statement claimed that the assessee received accommodation entries. Despite the assessee providing evidence regarding the transactions, the AO relied solely on Verma’s statement.
- Addition of Rs. 45,000 under Section 68: This was for an unexplained cash deposit in the bank. The assessee claims it was from cash in hand.
- Addition of Rs. 12,80,000: This was calculated as 8% of Rs. 1,60,00,000/- received as gross revenue from finishing work. The AO did this as a deemed profit computation.
Court’s Observations & Rulings:
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