DCIT Vs Martial Buildcom P. Ltd. (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi addressed the appeals by the revenue against the CIT(A) order dated 21.07.2023 pertaining to A.Y. 2011-12 and 2012-13 in the case of DCIT Vs Martial Buildcom P. Ltd. Both appeals were disposed of together due to common grounds.
The crux of the dispute revolved around several additions made by the Assessing Officer (AO) under section 40a(ia) and differential valuation of Transfer of Development Rights (TDR), without any incriminating material found during the search operation. The AO contended that the difference in valuation between DVO and the books of accounts constituted income additions.
However, the CIT(A) reasoned that transactions recorded in the regular books of accounts, including those related to TDR and payments to HUDA, cannot be considered incriminating material. Citing legal precedents such as Kabul Chawla and Abhisar Buildwell, the CIT(A) deleted the additions.
The Revenue, represented by the DR, contested the CIT(A)’s decision, while the appellant reiterated their stance before the appellate authority.
Upon careful consideration, the ITAT upheld the CIT(A)’s findings, emphasizing that the additions lacked reference to any incriminating material. The tribunal noted that the AO based the additions solely on differences in valuation and entries in the books of accounts, which do not constitute incriminating evidence.
