Case Law Details
ACIT Vs Delmos Aviation Pvt. Ltd. (ITAT Delhi)
Conclusion: AO without bringing any material or reasons before making any addition, simply added back the opening balances of the trade payables without making any verification from the parties and he had failed to discharge the preliminary onus and had made the addition in summary manners, therefore, CIT(A) had committed no error in deleting the addition made u/s 41.
Held: During the assessment proceedings, assessee was asked to furnish comparative details of the balances of trade payables for last three years and also to submit confirmation letters from the Creditors. Assessee furnished statement of creditors, however, not submitted the confirmation of any creditors. Assessee further submitted that no specific correspondence was available in respect of outstanding’s for more than one year. AO observed certain balances were payable for more than one year and there was no transaction with the parties during the year. He further observed that, the huge balance of Rs. 21,20,53,479/- payable towards Consultancy Investment Services-Moscow (foreign company), therefore, AO was of the opinion that Opening Outstanding (even prior to 01/04/2015) continued and the credit were Rs. 5.56 Crore- a sample payment of Rs. 6,24,175/- was made and held that, although assessee had submitted confirmation of parties since it was on a plain paper and there was no evidence that the same had been received from Moscow. Therefore, the opening outstanding of Rs. 15,70,40,563/- had been treated as income u/s 41. It was noted that before the CIT(A), assessee was having running accounts with the above parties and had furnished the ledger accounts for previous and subsequent years to prove the transactions with those parties. AO did not confront anything to the assessee after preliminary details were furnished and AO had also not made any independent enquiry. Assessee had filed copies of the assessment orders for Assessment Years 2013-14 to 2015-16 in which the transactions with all the parties had been duly accepted, further in the absence of the AO bringing any material or reasons before making any addition, simply added back the opening balances of the trade payables without making any verification from the parties. AO had also ignored the fact that part of the payment had been made in current/subsequent year and there was a running account with these parties held by assessee. CIT(A) had relied on various decisions of Apex Court as well as various High Courts and ultimately deleted the above addition. Considering the fact that AO had failed to discharge the preliminary onus and had made the addition in summary manners, CIT(A) had committed no error in deleting the addition of Rs. 20,00,37,558/- made u/s 41.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by Revenue is filed against the order of Learned Commissioner of Income Tax (Appeals)-3, New Delhi [“Ld. CIT(A)”, for short], dated 24/07/20 19 for Assessment Year 20 16-17. Grounds taken in this appeal are as under:
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