DCIT Vs Clartech Engineers Pvt. Ltd. (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, has dismissed an appeal filed by the Deputy Commissioner of Income Tax (DCIT) and upheld the decision of the Commissioner of Income-tax (Appeals) [CIT(A)] to delete significant additions made during the assessment of Clartech Engineers Pvt. Ltd. for the Assessment Year 2017-18. The ruling confirms the deletion of an addition amounting to ₹1,82,75,037 related to alleged bogus creditors and a partial disallowance of depreciation on a CNC Lathe machine.
The case originated from the assessment of Clartech Engineers Pvt. Ltd., a company engaged in the manufacturing of machinery and providing installation and maintenance services. For AY 2017-18, the company initially filed a return declaring an income of ₹54,26,910, later revised to ₹46,67,470. The case was selected for complete scrutiny, and the Assessing Officer (AO) subsequently determined the total income at ₹3,57,20,270, incorporating various additions and disallowances. Among these were the disallowance of depreciation on a CNC Lathe and a substantial addition concerning alleged bogus creditors.
Aggrieved by the assessment order, Clartech Engineers Pvt. Ltd. lodged an appeal with the CIT(A). The CIT(A), after reviewing the submissions and the AO’s findings, granted partial relief to the assessee. The appellate authority restricted the disallowance of depreciation on the CNC Lathe to ₹1,28,975 and, more significantly, deleted the entire addition of ₹1,82,75,037 made by the AO on account of alleged bogus creditors.
