Pilot Industries Limited Vs DCIT (ITAT Delhi)
The ITAT Delhi dealt with a batch of connected appeals involving Pilot Industries Limited, the Revenue and Ardee Industries Limited for multiple assessment years. Pilot Industries was engaged in manufacturing lead alloys, lead oxide and lead acid batteries. Search and seizure proceedings under section 132 were carried out and the Assessing Officer made various additions relating to alleged bogus/non-genuine purchases, warranty expenditure, commission, unaccounted sales, inflated expenditure, stock differences and other matters. The CIT(A) granted substantial relief by deleting several additions while confirming certain others.
On the issue of alleged bogus purchases, the Assessing Officer had applied an estimated rate of 3.27%, drawing support from material concerning another entity, Bindal Smelting Private Limited. Pilot Industries contended that its purchases were recorded in audited books, payments were through banking channels and supporting documents such as confirmations, ledgers, invoices, transporter receipts, e-way bills, weighing slips, goods inward records and other evidence had been furnished. The books of account had also not been rejected. The Tribunal agreed with the CIT(A) that merely applying a rate derived from another assessee operating in a similar industry could not justify an addition in Pilot Industries’ case. The factual matrix concerning Bindal Smelting was different and there was no finding establishing that Pilot Industries had engaged in the same practice. Consequently, the Revenue’s challenge to deletion of the bogus-purchase addition failed.
