ACIT Vs Hella India Lighting Ltd. (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the revenue’s appeal in the case of ACIT Vs Hella India Lighting Ltd., addressing three key issues for the assessment year 2017-18. The revenue challenged the deletion of an addition under Section 69C amounting to ₹6.80 crore, disallowance of expenses of ₹3.15 crore, and disallowance of a foreign exchange loss of ₹96.71 lakh. The tribunal upheld the findings of the Commissioner of Income Tax (Appeals) [CIT(A)], favoring the assessee.
Regarding the Section 69C addition, the AO had deemed the purchase of fixed assets worth ₹6.80 crore as bogus due to inadequate documentary evidence. However, during the appellate proceedings, the assessee submitted invoices and proof of purchases, which were corroborated by the AO in a remand report. CIT(A) deleted the addition, and the ITAT concurred, dismissing the revenue’s claims as baseless. Similarly, the disallowance of 10% of other expenses under Section 37(1) was overruled after the assessee provided detailed invoices and supporting documents. The ITAT found the remand report validated the authenticity of the expenses, rendering the disallowance unjustified. Lastly, the tribunal upheld the claim for foreign exchange loss, relying on judicial precedents and accounting standards. It noted that such losses, being integral to business transactions, were allowable under Sections 43AA and AS-11, dismissing the revenue’s arguments about the absence of hedging.
