February 13, 2026 : The Delhi Bench of the Income Tax Appellate Tribunal has allowed the appeal filed by Zeta Buildtech Pvt. Ltd. and deleted disallowances aggregating to ₹53.30 lakh for Assessment Year 2020–21, holding that the Revenue cannot question the commercial wisdom of expenditure incurred through independent service providers.
The order was passed by a Bench comprising Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman on 12 February 2026 in Zeta Buildtech Pvt. Ltd. vs. DCIT (ITA No. 3449/Del/2025).
Zeta Buildtech Pvt. Ltd., engaged in the distribution of liquor, spirits, alcohol, wines and beverages, filed its return declaring total income of ₹98.48 lakh. The case was selected for scrutiny. During assessment proceedings, the Assessing Officer disallowed:
- ₹31.80 lakh paid to S.P. Jindal Financial Services Limited for internal audit and MIS services
- ₹3 lakh paid to Bigthink Media Pvt. Ltd. for MIS reporting
- ₹18.50 lakh paid to S.P. Jindal Marketing Limited towards marketing services
The disallowances were primarily made on the ground that the payments were excessive or not properly substantiated. The Commissioner of Income Tax (Appeals) upheld these additions, leading to the present appeal before the Tribunal.
On examining the record, the Tribunal noted that S.P. Jindal Financial Services Limited had been engaged for stock verification and submission of periodic MIS reports. The assessee had placed stock verification certificates and inventory reports on record, including reports signed by independent Chartered Accountants engaged on an assignment basis.
The Bench observed that the service provider was an unrelated and independent entity engaged under a contractual arrangement. It emphasized that there is no fixed formula to measure such business engagements and held that the Revenue cannot step into the shoes of the businessman to determine the necessity or quantum of expenditure.
With regard to payments made to Bigthink Media Pvt. Ltd. and S.P. Jindal Marketing Limited, the Tribunal found that the disallowances were based largely on comparisons with payments made to other service providers. The Bench rejected this approach, observing that the reasonableness of expenditure cannot be judged without considering factors such as location, nature and complexity of assignments.
The Tribunal also noted that similar payments made to other entities had been accepted, and mere comparison of per-location costs without examining the underlying scope of work was not a valid basis for disallowance.
The Bench reiterated the settled legal principle that once an expenditure is incurred wholly and exclusively for the purposes of business and paid to unrelated parties, the Revenue cannot disallow it merely on the ground of perceived unreasonableness, unless specific statutory provisions such as Section 40A(2) are attracted.
Finding no material on record to show that the payments were not for business purposes, the Tribunal deleted the entire disallowance of ₹53.30 lakh and allowed the appeal.
Cause Title: Zeta Buildtech Pvt. Ltd. vs. DCIT
Case Number: ITA No. 3449/Del/2025
Coram: Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman
Date of Order: 12 February 2026
