IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “G” BENCH: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER &

SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.399/Del/2017 [Assessment Year : 2012-13]

Smt. Sudha Loyalka, vs ITO, Prop.Tirupati Industries, 2/1, Ward-35(2), Block-41, Singh Sabha Road, New Delhi Shakti Nagar, Delhi-110007.

PAN-AABPL6055D APPELLANT RESPONDENT Appellant by Dr.Rakesh Gupta, Adv., Shri Somil Aggarwal, Adv. &

Shri Deepesh Garg, Adv.

Respondent by Shri Narpat Singh, Sr.DR Date of Hearing 24.06.2025 Date of Pronouncement 12.09.2025 ORDER PER MANISH AGARWAL, AM :

The present appeal is filed by assessee against the order dated

01.12.2016 passed by Ld. Commissioner of Income Tax (A)-12, New Delhi [“Ld.CIT(A)”] in Appeal No. 26/15-16 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 18.03.2015 passed u/s 143(3) of the Act pertaining to Assessment Year 2012-13.

2. Brief facts of the case are that the assessee is an individual and filed her return of income on 27.09.2012, declaring total income of INR 3,52,180/-. The case of assessee was selected for scrutiny for the reason “large amount of sundry creditors”. Assessee is engaged in the business of trading of fabrics and readymade garments under the name and style as M/s. Tirupati Industries. The assessee has shown total sundry creditors of INR 6,77,21,342/- which includes INR 3,48,88,095/- under the title “Retail Creditors Control account”. In order to examine the genuineness of these creditors, AO issued notice u/s 133(6) of the Act to 27 parties out of which notices issued to 20 parities amounting to INR 2,78,20,495/- were returned back for the reason “wrong address/incomplete address/non-existed” etc. The AO thereafter, discussed each of the parties to whom notices were sent and reached to the conclusion that these parties are non-existent and made the addition of INR

3,50,94,758/- as bogus creditors.

3. Against the said order, assessee preferred an appeal before Ld. CIT(A) who vide impugned order dt. 01.12.2016, after considering the submissions of the assessee, dismissed the appeal of the assessee.

4. Aggrieved by the said order of Ld.CIT(A), assessee filed appeal before the Tribunal where the Tribunal vide its order dated 18.07.2018 in ITA No.399/Del/2017 [Assessment Year 2012-13] deleted the additions and allowed the appeal of the assessee. Aggrieved by the said order, Revenue preferred appeal before Hon’ble Delhi High Court and the Hon’ble Court in ITA No.607/2019 vide order dated 30.07.2024 has set aside the order of the Tribunal and remand it to the file of ITAT for examination the issue of creditors in the line of expenditure claimed u/s 37 of the Act. The relevant observations of the Hon’ble High Court as contained from para 6 to 10 of the order are reproduced as under:-

6. “Before us and on the basis of the arguments which were addressed, we find that the invocation of Section 69C of the Act would also not sustain since the said provision concerns itself with the source of expenditure. That was clearly not an issue of dispute.

7. The appellant would contend that apart from the above, the veracity of the expenditure would have to be examined on the anvil of Section 37, and which provision had been duly pressed into aid before the ITAT. We, however find that no specific finding in that respect has been returned by it.

8. While Mr. Rai is correct in his submission that the mere non-

mentioning of a provision would not invalidate an addition as long as it be otherwise sustainable under the Act, we find that the matter would merit being remitted to the ITAT which may examine the issue afresh and bearing in mind the provisions contained in Section 37 of the Act.

9. We accordingly allow the instant appeal and set aside the order of the ITAT dated 18 July 2018. The matter shall stand remanded to the ITAT for considering the appeal afresh bearing in mind the observations made hereinabove.

10. All rights and contentions of respective parties