ITAT Remands back Income Tax Addition on Delhivery Freight Services Over Unreconciled Transport Vendor Balances:

ITAT Remands back Income Tax Addition on Delhivery Freight Services Over Unreconciled Transport Vendor Balances The ITAT Delhi, in a recent significant ruling, has granted a major relief to Delhivery Freight Services Private Limited in a tax dispute involving an addition of about Rs 7.39 lakh made by the Income Tax Department under Section 68 of the Income Tax Act. The matter has been sent back to the tax authorities for fresh examination. During the personal hearing before the ITAT Delhi, the assessee, Delhivery Freight Services Private Limited, claimed that the CIT(A) had mistakenly sustained an addition amounting to Rs 7.39 lakh made by the tax authorities on the grounds of unreconciled balances with transport vendors.

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The assessee claimed that it had furnished all primary records, audited books of accounts, vendor ledgers, PAN and TDS details, and proof of genuine transactions and business nature of the payables. Further claimed that the tax authorities had not provided complete copies of notices and vendor information obtained under Section 133(6), which limited its ability to properly reconcile the balances. However, on the other hand, the tax department claimed that they had passed a reasoned and justified order after granting fair opportunities during the assessment proceedings. When the tribunal analysed the case, it noted that the CIT(A) had itself observed that the assessee had failed to entirely discharge the burden of proof under Sections 68 and 69C because proper corroborative evidence was still missing. However, the tribunal also accepted the assessee’s complaint regarding incomplete information and reconciliation difficulties.

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Considering the aforementioned findings, the tribunal concluded not to entirely sustain the impugned addition; instead, it remanded the case to the tax authorities for fresh examination. The authorities have been directed to grant the assessee a fair opportunity of hearing and presenting the supporting documents/evidence. The company is also instructed to fully cooperate and provide all necessary documents during the reassessment proceedings.