Harsha Associates Private Limited Vs DCIT (Delhi High Court)
In a significant ruling, the Delhi High Court has dismissed an appeal filed by Harsha Associates (P.) Ltd. (the Assessee) against an order of the Income Tax Appellate Tribunal (ITAT), which had largely upheld the addition made by the Assessing Officer (AO) for unpresented cheques treated as bogus credits. The case, focusing on the assessment year 2007-08, centered on the Assessee’s reflection of substantial liabilities to banks that were not corroborated by bank statements.
Read SC Judgment: SC Affirms Addition After Assessee Fails to Prove Bank Liabilities as Genuine
The dispute originated from the Assessee’s return of income for AY 2007-08, where it declared an income of ₹28,71,047/-. During scrutiny, the AO observed that the Assessee’s books reflected liabilities totaling ₹4,45,99,625/- owed to Bank of Baroda, Indian Overseas Bank, and Punjab National Bank. However, upon issuing notices under Section 133(6) of the Income Tax Act, 1961, to these banks, the AO found that none of them confirmed the liabilities as shown by the Assessee. Indian Overseas Bank, in fact, only confirmed a liability of ₹1,86,636/-. Consequently, the AO concluded that the remaining amount of ₹4,44,12,989/- represented bogus credits and added it to the Assessee’s declared income.
