Principal Commissioner Of Income Tax, Delhi-17 v. Vardan Fashions

$~11 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 106/2017 & CM No.4644/2017 PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-17 ..... Appellant Through:Mr.Rahul Kaushik, Advocate. Versus VARDAN FASHIONS Through:None. CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%22.02.2017 CM No.4644/2017 (for exemption) ..... Respondent Allowed, subject to all just exceptions. The application stands disposed off. ITA 106/2017 1.Four questions are sought to be urged by the Revenue in its appeal –in this case – against the order of the Income Tax Appellate Tribunal (ITAT)under Section 260A of the Income Tax Act, 1961 (hereinafter to be referredas ‘the Act’). 2.The first question pertains to the alleged bogus purchases to the tuneof `6,90,10,498/-; the second relates to the addition made by the AssessingOfficer (AO) to the tune of `6,15,46,908/- under Section 68 of the Act; the ITA 106/2017 third relates to a negative balance disallowed by the AO – to the extent of`17,99,616/-; and the last pertains to a disallowance under Section 40A(3) ofthe Act. 3.As far as the first issue is concerned, the Court notices that theassessee is a garment exporter and had claimed to have purchased rawmaterials i.e. fabric from several suppliers.The AO doubted thesepurchases on several grounds – prominently because of the SpecialAuditor’s report and also premised his findings upon unavailability of thesuppliers at the given addresses. After considering the remand report, theCommissioner of Income Tax (Appeals) [CIT(A)] allowed the assessee’sappeal noticing that finished product was exported and that the quantity offinished product matched with the figures that the assessee claimed werepurchased. It is furthermore noticed that the purchasers were paid throughbanking channels.The ITAT confirmed the orders of the CIT(A).ThisCourt is the opinion that having regard to the concurrent findings, which arebased upon sound reasoning, no interference is called for on this aspect. 4.As far as the second issue i.e. addition made under Section 68 isconcerned, the Court is of the opinion that the CIT(A) closely examined theadditional materials and after analysing the remand report was satisfied thatthe amounts of `6.15 crores were denoted genuine transactions of identifiedparties. Here too the findings are entirely correct. As far as the last twoitems are concerned, the Court is of the opinion that the question of negativecash balance of `17,99,616/-, as explained by the CIT (A) and the ITAT, didnot arise.Likewise, disallowance under Section 40A(3) of the Act waspremised upon an erroneous view of the facts.ITA 106/20172 of 3 5.In these circumstances, no substantial question of law arises. Theappeal is, therefore, dismissed. S. RAVINDRA BHAT, J. FEBRUARY 22, 2017sb NAJMI WAZIRI, J. ITA 106/2017