GUPTA TRANSFORMER PVT. LTD,KOLKATA vs. ITO,WARD-10(1), KOLKATA

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ITA 204/KOL/2023Status: DisposedITAT Kolkata23 May 2023AY 2012-134 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the Assessing Officer's logic for making the addition was flawed, as the assessee had made purchases and not received cash. The addition was based on imagination without analytical examination of the record.

What were the facts?

The assessee declared a total income of Rs. 2,24,610/-. The Assessing Officer, based on information regarding accommodation entries, issued a notice under section 148 and made an addition of Rs. 1,00,666/- under section 68 as unexplained credit.

What were the issues?

Whether the addition of Rs. 1,00,666/- under section 68 as unexplained credit was justified when the assessee had made purchases and not received cash.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice- & Shri Rajesh Kumar

Per Shri Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 12th January, 2023 passed for assessment year 2012-13.

1.

Gupta Transformer Pvt. Limited 2. The assessee has taken two grounds of appeal, out of which Ground No. 2 is general in nature, which does not call for recording of any finding. In Ground No. 1, the assessee has pleaded that the ld. CIT(Appeals) has erred in confirming the addition of Rs.1,00,666/-.

3.

Brief facts of the case are that the assessee has filed its return of income on 18.09.2012 declaring total income of Rs.2,24,610/-. According to the ld. Assessing Officer, this return was processed under section 143(1) on 17.05.2013. He further observed that subsequently an information has been received from ITO (Investigation), Unit-5, Kolkata in the case of Mr. Samrjit Jain and related beneficiary entities. He narrated some information and then observed that notice under section 148 was issued on 30.03.2019. In an ex-parte order, he made an addition of Rs.1,00,666/- under section 68 of the Income Tax Act on the ground of unexplained credit. His finding met the approval of the ld. CIT(Appeals).

4.

With the assistance of ld. Representatives, we have gone through the record carefully. A perusal of the assessment order would indicate that there is no head & tail to the circumstances considered by the ld. Assessing Officer, vis-a-vis the addition made under section 68. His observations are that one Mr. Samrjit Jain, Proprietor of M/s. Snigdha Trading, was indulged in providing

Gupta Transformer Pvt. Limited accommodation entries namely accepting the cheque giving the money in cash or vice-versa. Hence, the assessee has shown purchases of Rs.1,00,666/- from this concern. Therefore, it is to be treated as unexplained credit. We fail to appreciate this logic of making addition. The assessee has not received any cash in its books, rather it has made purchases. The ld. Assessing Officer has nowhere disallowed the expenditure for making purchases. He just assumed that since the assessee has made purchases and it made payment through account payee cheque, therefore, it will take back the money from M/s. Snigdha Trading in cash and, therefore, it is unexplained credit. We find that it is only imagination of the ld. Assessing Officer without any analytical examination of the record. Therefore, this ground of appeal is allowed and addition deleted.

5.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on May 23, 2023.

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