Delhi High Court rejects appeal on ITR

Delhi High Court rejects appeal on ITR

The assessing officer makes valuations to protect the interests of the revenue

In a recent judgment, the Delhi High Court's division bench of Justice Rajiv Shakdher and Justice Talwant Singh dismissed a bunch of appeals against the deletion of addition towards share capital/share premium, bogus purchases and deposits in bank accounts in the Income Tax Returns (ITRs).

The assessee, Agson Global had filed its return of income for the Assessment Year 2012-2013 under the Income Tax Appellate Act (ITAT).

The assessing officer (AO) passed an assessment order under the Act. The AO made an addition to the declared/returned income of the assessee on account of unexplained share capital and share premium. As a result, the assessed income of the assessee rose. Aggrieved at the order, the assessee made an appeal.

Thereafter, the Commissioner of Taxes (Appeals) in his order of March 2016 deleted the aforesaid addition. The revenue rightly did not carry the matter further. Consequently, the assessment proceedings stood concluded.

The court thus held that in case the ITAT decided the matter based on an appreciation of evidence placed on record and the order was not challenged on the ground of perversity, no substantial question of law arose.

The court held that the investigation wing had directed the AO to frame the assessment in a manner that would protect the revenue's interest. "The AO performs a quasi-judicial function while framing an assessment. The revenue cannot dictate the manner in which the AO frames the assessment order," the court said.