DCIT, CR BUILDING vs. GULSHAN POLYOLS LIMITED, LAXMI NAGAR

year 2015-16, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1068966016(1), dated 23.09.2024 involving proceedings under section 147 r.w.s. 144 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’).

recorded behind the back of the appellant and therefore cannot be used against the assessee without cross examination of said allegation as it is against the process of natural justice. The appellant has argued strongly that the only basis of addition on account of alleged unaccounted sale is the statement given by Sh. Ashok Kumar Gupta, therefore, the appellant has right to cross examine the party but the AO did not allow the opportunity of cross examination. The appellant has referred various case laws having similar facts. 6.3. From the facts of the case it is clear that there is no documentary proof referred by the AO suggesting that the amount of Rs. 1,17,35,487/- was credited in the books of the appellant on account of alleged unaccounted sales. Further, the appellant has stated that section 68 is applicable only when any sum is found credited in the books of an assessee maintained for any previous year whereas the AO has not found the above cash credited in the any kind of books of account maintained by the appellant including its bank accounts. The AO has stated in the assessment order that the appellant company has made bogus sales to M/s Ridhi Sidhi Impex which is controlled by Sh. Ashok Kumar Gupta. After perusal of statement given by Sh. Ashok Kumar Gupta, it is noticed that M/s Ridhi Sidhi Impex maintained a bank account number 122002110621596 in Punjab National Bank wherein no payment received from M/s Ridhi Sidhi Impex through the above mentioned bank account number on account of alleged sales made by the appellant. From the copy of invoices of sales furnished by the appellant it is evident that no sale invoice has been issued by the appellant to M/s Ridhi Sidhi Impex. 6.4. It is evident from the assessment order that the AO has not made any effort to gather documentary evidences in support of the statement given by Sh. Ashok Kumar Gupta during the search operation. The AO is completely and mechanically dependent on the statement of Sh. Ashok Kumar Gupta for making the impugned addition on account of alleged accommodation entry obtained by the appellant by making fake sale to M/s Ridhi Sidhi Impex. The assessment order is absolutely silent about what other evidences were collected by the search party in support of the statement given by Sh. Ashok Kumar Gupta. 6.5 In view of the facts, I am of the considered opinion that a statement given by third party against the appellant cannot be sufficient basis to make such a huge addition. The AO has failed to bring any documentary evidence proving that alleged sale proceeds were credited in the books / bank account of the appellant. On the other hand, the appellant has proved by furnishing the copies of entire sale invoices and bank statements showing that no such sale proceeds have been credited in its books/bank account. In absence of any concrete evidence, I am not inclined to uphold the addition made by the AO. Hence, the AO is hereby directed to delete the addition of 3 | P a g e

Rs. 1,17, 35 487/- made by him u/s 68 of the Income Tax Act, 1961 on account of unaccounted sales. Accordingly, the ground no. 1 of the appeal is allowed.”