ACIT Vs Arjun Enterprises Pvt. Ltd. (ITAT Delhi)
The ITAT Delhi dismissed the Revenue’s appeal and upheld the order of the CIT(A) granting substantial relief to the assessee in a scrutiny case involving alleged bogus purchases and multiple disallowances. The AO had treated certain sundry creditors and purchases as unexplained u/s 68 due to lack of confirmations and made additions along with disallowances of interest, TDS, liabilities and expenses.
The Tribunal noted that purchases from a foreign supplier (KRY Global DWC LLC) were genuine as goods were imported through customs channels and recorded in books; hence deletion of addition was justified. For other disputed purchases where complete evidence was lacking but sales were accepted, estimation of profit @10% of purchases was held reasonable. The Tribunal further confirmed deletion of disallowance of limit-closing charges as allowable business expenditure u/s 37(1), deletion of TDS disallowance since payments to bank and government were exempt, and deletion of additions relating to liabilities after verification of supporting documents and subsequent payments. Accordingly, all grounds of Revenue were dismissed and CIT(A)’s relief was sustained.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal is filed by the Revenue against the order of ld. Commissioner of Income-tax (Appeals), Delhi-23 (hereinafter referred to ‘ld. CIT (A)’) dated 12.03.2025 for Assessment Year 2018-19.
