IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT &

SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 34/DEL/2023 Asstt. Year: 2021-22 Shiv Shakti Constructions Vs Deputy Commissioner of Incom-

A-142, Omaxe, NRI City, Pari Tax Chowk, Greater Noida, Central Circle-II, Gautam Budh Nagar-201306, 2^nd Floor, ARTO Complex, Uttar Pradesh Sector-33 Noida-201301 (APPELLANT) (RESPONDENT)

PAN No. AAZFS6406R AND ITA No. 578/DEL/2023 Asstt. Year: 2021-22 Deputy Commissioner of Incom- Vs Shiv Shakti Constructions Tax A-142, Omaxe, NRI City, Pari Central Circle-II, Chowk, Greater Noida, 2^nd Floor, ARTO Complex, Gautam Budh Nagar-201306, Sector-33 Uttar Pradesh Noida-201301 (APPELLANT) (RESPONDENT)

PAN No. AAZFS6406R Assessee by : None Revenue by : Ms. Rajinder Kaur, CIT (DR)

Date of Hearing: 19.11.2025 Date of Pronouncement: 19.11.2025 ORDER Per Mahavir Singh, Vice President:

These cross appeals filed by the Assessee as well as Revenue, are arising out of the order of Commissioner of Income Tax (Appeals), Kanpur, in Appeal No. CIT(A)-IV/KNP/10069, vide order dated 21.12.2022. Assessment was framed by Deputy Commissioner Income Tax (DCIT), Central Circle-II, Noida, for the AY 2021-22 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as, “the Act”), vide his letter dated

30.09.2022.

First, we take up Assessee’s Appeal in ITA No. 34/DEL/2023 The only issue in this Appeal of Assessee is as regards to the order of CIT(A), confirming the action of the Assessing Officer (AO) in rejecting the books of accounts and, consequently estimating the profit @10%. For this, the Assessee has raised three grounds which are argumentative and exhaustive, and hence, need no reproduction.

2. Brief facts of the case are that the Assessee is a partnership firm, engaged in the execution of Government contracts being a Government approved contractor. The Assessee is engaged in execution of irrigation development activities relating to earth works, canal lining works, canal protection works, with self-owned machinery or rented machinery under their own direct supervision and personal control. A search and seizure operation u/s132 of the Act was conducted on the business and residential premises of the Assessee on 27.11.2020. During the course of search, various incriminating documents/ information belonging to the Assessee was found and seized. The AO, during scrutiny of Assessment, noted that the Assessee has inflated purchases and, consequently, bogus Sundry Creditors . The AO also noted that the Assessee’s firm owes an unusually large quantum of amounts to its Sundry Creditors, as per the awaited balance-sheet/ accounts of the Assessee for AY 2015-16 to AY 2021-22. The AO in the Assessment Order have detailed out the chart wherein the amount of total Sundry Creditors, , incremental increase and Sundry Creditors viz-a-viz gross contract receipts were analysed in term of percentage. The AO noted that the Investigation Wing of the Income Tax Department has examined various individuals post search proceedings and the accountant of the Assessee’s firm. Shri Kuldeep Joshi, accountant of the firm accepted that the assessee was making adjustment in the purchases under the sub head ‘Entry Other Creditors’. The relevant statement recorded and relevant questions 28 and 29 are reproduced in the Assessment Order. Accordingly, the AO was of the view that the Assessee’s firm is inflating purchases in order to reduce profit and consequent entry of Sundry Creditors was made. Similarly, the AO noted that the statement of Shri Mukesh Kumar, the main working partner was also recorded wherein the partner was asked by the AO to give the basic details like name and address of the Sundry Creditors but, despite numerous opportunities, the Assessee could not provide the details. This fact is recorded by AO in Para 4.6 and 4.7 of his order. The Assessee submitted his reply before the AO on 31.08.2022 wherein complete list of Sundry Cre