2025 (7) TMI 658

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....he Income Tax Act, 1961 (hereinafter referred to as "the Act") for the Assessment Years 20-08-09 & 2008. ITA No.3763/Del/2024 (Department's Appeal) "1. Whether the Ld. CIT(A)-26 has erred in the eyes of law in deleting the additions on account of lower GP offered by the assessee and has not provided the manufacturing account despite the ample opportunity being given by the AO. 2. i. Whether the Ld. CIT(A)-26 has erred in the eyes of law in deleting the additions on account the bogus creditors entries on the basis that the same has been squared up by the assessee in the subsequent years without considering the facts that this is an organized way of the assessee to avoid penalties on the assessed income. ii. Whether the Ld. CIT(A)-26 h....

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....I am of the considerate view that the assessing officer did not provide GP details and the nature of the activity of the person, who was relied upon by the AO to the appellant for applying the GP at the rate of 21% in the hands of the appellant. Further, it is submitted by the appellant that, there was no adjustment made by the AO in the earlier years on that account. In the absence of finding out any defects or incorrectness of the said account, the estimation of GP by the assessing officer by applying the GP rate of 21% of the appellant's turnover is not tenable and accordingly the said addition made to the tune of Rs. 14,28,495/- is not sustainable and is hereby deleted. Thus, the appellant succeeds on this ground." Ground 2: Sundry....

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....fied the genuineness the following creditors by way of submitting necessary documentary evidences, confirmations and subsequent transactions/repayments made. 1. Pylon Traders. 697848/- 2. K.S. Consumer Product. 75000/- 3. Sahar International. 1227293/- 4. Karuna Industries. 368878/- Therefore, I am of the considerate view that, the disallowance made by the AO u/s 68 of the Income Tax Act on the above stated creditors is sustainable. Accordingly, the AO is directed to delete the additions made account of other creditors mentioned in the para 5.2.4, 5.2.5 and 5.2.6." "5.2.10 In view of the above, I am of the considerate opinion that the disallowance made by the assessing officer u/s 41(1)(a) of the Act on those 4 foreign creditors....