Court condones delay in appeal, upholds ITAT decision on addition deletion.

The court condoned the delay in re-filing the appeal and disposed of the application. The appeal by the Revenue against the ITAT's order deleting the addition made by the Assessing Officer was dismissed. The court upheld the ITAT's decision, noting that the disputed entry did not impact the company's profits as all purchases were reflected in the closing stock, rendering the addition unjustified. The court found no legal error in the ITAT's conclusion and refrained from commenting on the Revenue's suggestion to apply Section 150 of the Act.

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Issues:
1. Condonation of delay in re-filing the appeal.
2. Justification of deleting the addition made by the Assessing Officer.
3. Effect of the entry on the profits of the company.
4. Legal error in the conclusion of the ITAT.
5. Application of Section 150 of the Act by the Revenue.

Condonation of Delay:
The delay in re-filing the appeal was condoned by the court based on the reasons stated in the application, and the application was disposed of.

Addition by Assessing Officer:
The appeal by the Revenue was against the ITAT's order deleting the addition of Rs. 69,05,250 made by the Assessing Officer to the Assessee's income. The Assessee explained that the amount represented a purchase transaction for a flat, which was mistakenly accounted for in the previous year. The AO considered the transaction as bogus due to lack of documentary evidence. However, the ITAT noted that the transaction had no effect on the company's profits as no sales were made during the year, and all purchases were reflected in the closing stock. The ITAT found no justification for the addition, and the court upheld this conclusion.

Effect on Profits:
The ITAT highlighted that the entry in question did not impact the company's profitability since all purchases, including the flat, were part of the closing stock. As there was no loss to the revenue, the addition was deemed unjustified.

Legal Error by ITAT:
The court, after hearing the Revenue's submissions, found no legal error in the ITAT's conclusion regarding the lack of impact on the company's profits due to the disputed entry.

Application of Section 150:
The Revenue suggested using Section 150 of the Act to give effect to the ITAT's order in the subsequent year. The court refrained from commenting on this, stating that the Revenue's actions must comply with the law.

In conclusion, the appeal was dismissed, affirming the ITAT's decision to delete the addition made by the Assessing Officer, as the disputed entry had no effect on the company's profits.

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