PCIT Vs Electrical And Electronics India Ltd. (Delhi High Court)
The Delhi High Court considered the Revenue’s appeal against the Income Tax Appellate Tribunal’s order dated 18.04.2023 relating to Assessment Year 2011-12. The Tribunal had examined the correctness of the Commissioner of Income Tax (Appeals)’ order dated 13.11.2017 concerning Assessment Years 2010-11 to 2012-13. The dispute related to the deletion of an addition of ₹4,25,00,085 made under Section 69 of the Income Tax Act, 1961 on account of alleged unexplained investments made by the respondent-assessee in the JP Minda Group of companies. The addition in the respondent’s hands had been made only on a protective basis, while the substantive addition had been made in the hands of the JP Minda Group.
The Court noted that the substantive addition in the hands of the JP Minda Group had already been challenged before a coordinate bench in a batch of appeals led by Commissioner of Income Tax (Central)-2 vs. M/s JPM Tools Ltd., which also covered Pr. Commissioner of Income Tax (Central)-2 vs. Jay FE Cylinder Ltd. By judgment dated 26.09.2023, the coordinate bench deleted the substantive addition on merits.
The Revenue submitted that the substantive addition had been deleted based on the decision of the coordinate bench in Commissioner of Income Tax vs. Kabul Chawla, which had subsequently been affirmed by the Supreme Court in Principal Commissioner of Income Tax vs. Abhisar Buildwell. The High Court observed that since the substantive addition had been deleted on merits, the Tribunal had rightly dismissed the Revenue’s appeal because the addition in the respondent’s hands was only protective in nature.
