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Appellate Tribunal Confirms Genuine Liabilities for Solar Power Installation The appellate tribunal upheld the decision of the Ld. CIT (A) in finding the liabilities towards M/s. LDC Holdings Pvt. Ltd. for solar power installation ...
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Appellate Tribunal Confirms Genuine Liabilities for Solar Power Installation
The appellate tribunal upheld the decision of the Ld. CIT (A) in finding the liabilities towards M/s. LDC Holdings Pvt. Ltd. for solar power installation and manpower supply charges as genuine. The tribunal dismissed the revenue's appeal, concluding that the additions made by the Ld. AO under section 68 were unfounded.
Issues: 1. Related party liability of M/s. LDC Holding Pvt. Ltd. for solar power-installation charge. 2. Liability towards M/s. LDC Holdings Pvt. Ltd. for manpower supply charges.
Issue 1: Related Party Liability for Solar Power-Installation Charge: The case involved an appeal by the revenue against an order passed by the Ld. CIT (A) for the assessment year 2016-17. The Ld. AO observed outstanding dues of Rs. 2,34,55,202/- to LDC Holding Pvt. Ltd., for various charges, including solar power installation. The Ld. AO treated the payments made towards solar power installation and manpower supply charges as bogus transactions, resulting in an addition under section 68 of the Act. However, the Ld. CIT (A) found that the appellant had indeed installed the solar power plant, evidenced by financial records and depreciation claimed. The Ld. CIT (A) concluded that the liability towards M/s. LDC Holdings Pvt. Ltd. for the solar plant installation was genuine, deleting the addition of Rs. 68,70,000/- under section 68.
Issue 2: Liability for Manpower Supply Charges: Regarding the liability towards M/s. LDC Holdings Pvt. Ltd. for manpower supply charges, the Ld. AO disallowed Rs. 1,00,00,000/- under section 68. The appellant provided evidence, including invoices, confirming the manpower supply and payments made. The Ld. CIT (A) noted that the entire outstanding amount had been paid in the subsequent financial year, indicating the genuineness of the liability. The Ld. CIT (A) held that section 68 was inapplicable to this liability and directed the deletion of the addition. The Ld. CIT (A) emphasized the need for genuine transactions and upheld the appellant's claim, resulting in the dismissal of the revenue's appeal.
The appellate tribunal upheld the Ld. CIT (A)'s decision, emphasizing the genuineness of the liabilities towards M/s. LDC Holdings Pvt. Ltd. for solar power installation and manpower supply charges. The tribunal found no fault in the CIT (A)'s reasoning and concluded that the additions made by the Ld. AO under section 68 were misconceived. The tribunal dismissed the revenue's appeal, affirming the Ld. CIT (A)'s order on both issues.
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