Case Law Details
AAA Teleshopping Pvt. Ltd Vs ACIT (ITAT Delhi)
Introduction: The case of AAA Teleshopping Pvt. Ltd. vs. ACIT (ITAT Delhi) revolves around the addition made under section 69C of the Income Tax Act, 1961 for the Assessment Year 2011-12. The appeal filed by the assessee challenges the order of the Commissioner of Income Tax (Appeals)-I, New Delhi, dated 14.10.2019.
Detailed Analysis: In this appeal, the primary contention of the assessee is that the Assessing Officer (AO) erred in making an addition under section 69C of the Income Tax Act, and the Commissioner of Income Tax (Appeals) was unjustified in upholding the same.
The crux of the matter lies in the assertion that the purchases made by the assessee cannot be considered bogus. The assessee argues that these purchases were supported by bills, payments were made through account payee cheques or banking channels, and the suppliers confirmed the transactions. Furthermore, there was no concrete evidence to prove that the purchase consideration paid to the seller companies had come back to the assessee in cash. The sales stemming from these purchases had been accepted by the Department, and the supplier had accounted for the purchases and paid the requisite taxes.
In contrast, the Department contended that the purchases made by the assessee were from dummy companies controlled by certain individuals, who admitted to using these companies for providing accommodation entries. The AO, after considering the evidence, concluded that the purchases were not genuine and made an addition under section 69C of the Act.
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