DCIT Vs Scan Holdings (P) Ltd. (ITAT Delhi)
ITAT Delhi upholds CIT(A)’s relief – All additions deleted; Revenue’s appeal dismissed in Scan Holdings case
Revenue filed appeal against the order of CIT(A) deleting multiple additions made by AO in reassessment u/s 147 for A.Y. 2008-09 based on a tax-evasion complaint alleging sham commission income & bogus expenses of M/s Scan Holdings (P) Ltd.
AO had reopened the case on the allegation that commission received from M/s Ball Packaging India Pvt. Ltd. represented accommodation entries. He further made additions u/s 68 for alleged unexplained investment in a Singapore joint venture, disallowances of domestic & foreign travel expenses, rent paid to directors, & salaries to directors & employees.
CIT(A) upheld reopening but deleted all additions after detailed verification. On Revenue’s appeal, the Tribunal affirmed the CIT(A)’s findings in full:
Commission Income ₹2.19 cr: Held duly offered to tax – reflected in P&L & Form 26AS with TDS by Ball Packaging India Pvt. Ltd.; section 68 had no application.
Investment in Singapore JV ₹2.65 lakh: Made in FY 2001-02 & not in the relevant year; hence no addition u/s 68 possible.
Foreign Travel ₹3.46 lakh & Domestic Travel ₹4.10 lakh: AO’s ad-hoc disallowance (10%) unsustainable; full supporting vouchers & ledgers produced – no personal use shown.
