DCIT Circle-7(1) Delhi vs Dev Rubber Factory Pvt. Ltd.

Parties Involved

Facts Summary

The assessee company, Dev Rubber Factory Pvt. Ltd., was engaged in the business of manufacturing tubes for automobile tyres. It e-filed its return of income on 28.10.2017 declaring income at INR 77,50,730/-. The case was selected for scrutiny assessment through CASS and a notice u/s 143(2) was issued on 10.08.2018. Various statutory notices u/s 142(1) along with questionnaires were issued, and the assessee submitted its replies. The assessment order was passed at an income of INR 3,95,31,243/- on 22.12.2019 u/s 143(3) of the Act, making several additions including bogus share capital, rate & taxes, bogus freight and forwarding expenses, and vehicle maintenance expenses. The assessee filed an appeal before the Ld. CIT(A), who partly allowed the appeal. Aggrieved by this, the Revenue filed an appeal before the Tribunal.…

Legal Issues

• 1. Whether the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs. 53,50,000/- on account of bogus share application money as per provisions u/s 68 of the IT Act, 1961?
• 2. Whether the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs. 59,25,588/- on account of disallowance made against freight and forwarding expenses?
• 3. Whether the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs. 81,89,820/- on account of disallowance made against vehicle maintenance expenses?
• 4. Whether the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs. 1,13,53,960/- on account of unexplained/bogus sundry creditors as per the provisions of u/s 68 of the IT Act, 1961?
• 5. Whether the Ld. NFAC has erred in allowing the appeal of the assessee by deleting the addition made by the AO amounting to Rs. 81,88,822/- on account of static sundry creditors as per the provisions of u/s 41 of the IT Act, 1961?

Judgment Outcome

Decided in favour of Revenue.

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