Question 1

What are the key legal issues in ITA No. 6087/DEL/2016 [A.Y 2012-13] ITA No. 6089/DEL/2016 [A.Y 2014-15] The A. C.I.T Vs. M/s Pearls Buildwell Infrastructure Ltd?

Accepted Answer

1. Deletion of expenditure treating them as unascertained trade liabilities without giving any opportunity to the AO for verifying the submissions filed by AR. 2. Restricting the addition of Administrative & Employee expenses to 10% in absence of any bills and vouchers.

Question 2

What are the facts of ITA No. 6087/DEL/2016 [A.Y 2012-13] ITA No. 6089/DEL/2016 [A.Y 2014-15] The A. C.I.T Vs. M/s Pearls Buildwell Infrastructure Ltd?

Accepted Answer

The assessee-company, M/s Pearls Buildwell Infrastructure Ltd, is primarily engaged in the business of real estate and construction of buildings. A search and seizure operation under section 132 of the Income Tax Act, 1961 was carried out on 20.6.2013 in M/s PACL Group of cases, which included the assessee as one of the contractor/land developers for the projects of M/s PACL Ltd. The assessee company filed its original return on 25.11.2014 declaring a total loss of Rs. 1,08,02,803/-. In response to a notice under section 153A, the assessee filed a return of Rs nil. Subsequently, the Assessing Officer (AO) passed an order under section 153A adding an amount of Rs 4,46,53,043/- in AY 2012-13 and Rs 1,17,27,147/- for AY 2014-15, appearing in the balance sheet on account of bogus liability as no documents were filed to substantiate the liability. The AO further added 25% of expense towards administrative and employees amounting to Rs 62,57,170/- in AY 2012-13 and Rs 91,70,830/- for AY 2014-15, on account of the fact that the same had no supporting documents.

ITA No. 6087/DEL/2016 [A.Y 2012-13] ITA No. 6089/DEL/2016 [A.Y 2014-15] The A. C.I.T Vs. M/s Pearls Buildwell Infrastructure Ltd

Parties Involved

Facts Summary

Legal Issues

Judgment Outcome

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