Susheel Vs ITO (ITAT Delhi)
Bogus Purchase Cannot Become “Unexplained Expenditure” Merely by Changing the Label – Delhi ITAT Deletes ₹34.35 Lakh Addition u/s 69C &; Consequential Tax u/s 115BBE
Summary: The Delhi ITAT has held that where the alleged purchase expenditure is duly recorded in the books, supported by documentary evidence & its source is explained, the AO cannot invoke section 69C merely because the supplier is alleged to be an accommodation-entry provider. Once section 69C itself fails, the consequential application of the higher tax rate u/s 115BBE also cannot survive.
51-Day Delay – Consultant’s Lapse Should Not Cost the Assessee His Appeal
There was a delay of 51 days in filing the appeal before the ITAT. The assessee, a small civil contractor, explained that he was not conversant with income-tax technicalities & had entrusted the matter to his tax consultant/accountant. Due to an inadvertent lapse on the consultant’s part, the appeal was not filed within time.
Relying upon the principle that a litigant should not suffer because of the mistake of his counsel, the Tribunal found reasonable cause & condoned the delay.
The Trigger – Search on Somebody Else & ₹34.35 Lakh Purchases
The assessee was engaged in civil contracting, mainly executing Government infrastructure works such as roads, streets & other civil works. Reassessment proceedings u/s 147 were initiated on information alleging that the assessee had obtained an accommodation entry relating to purchases of ₹34.35 lakh from M/s R.K. & Company.
