ITO Vs Bhopal Sanchi Highways P. Ltd (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has dismissed an appeal filed by the Revenue, upholding the decision of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The ruling, pronounced on June 27, 2025, concerns the deletion of an addition of Rs. 11,23,30,245/- made by the Assessing Officer (AO) on account of unexplained trade payables for the Assessment Year 2016-17.
The case involved Bhopal Sanchi Highways P. Ltd., a Special Purpose Vehicle (SPV) established for highway construction. For the Assessment Year 2016-17, the assessee filed its return of income on October 17, 2016, declaring a total income of Rs. 2,857/-, primarily from bank interest, with no expenditure claimed. A key point of contention arose when the assessee inadvertently reflected “Creditors for Capital Goods” amounting to Rs. 11,23,30,245/- from the Assessment Year 2015-16 under the head “Trade Payables” in its return for AY 2016-17. The balance sheet’s Note 4, under ‘Other Current Liabilities,’ separately detailed amounts payable to other contracts, totaling Rs. 35,31,741/-.
During assessment proceedings, the AO queried the Rs. 11,23,30,245/- shown as “Creditors for Capital Goods.” The assessee clarified that this amount pertained to AY 2015-16 and was mistakenly categorized as “Trade Payables” in the current year’s return. Despite this explanation, the AO disregarded the assessee’s submission and proceeded to add the entire sum to the assessee’s income, treating it as unexplained.
