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Facts
The AO made an addition of Rs. 9.5 lakh to the assessee's income, stating that the appellant received an accommodation entry. The CIT(A) deleted the addition, holding that the Revenue had no evidence to support the claim and the reopening notice was invalid. The Revenue appealed this decision.
Held
The Tribunal held that the Revenue failed to prove that the appellant received an accommodation entry, as the appellant's name was not found in the relevant investigation wing list. Furthermore, the Revenue did not challenge the CIT(A)'s quashing of the reopening notice.
Key Issues
Whether the Revenue provided sufficient evidence to prove the receipt of accommodation entries by the assessee and whether the reopening of assessment was valid.
Sections Cited
68, 148
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Income Tax Appellate Tribunal, Mumbai “D” Bench, Mumbai.
Before: Shri Pawan Singh (JM) & Shri Omkareshwar Chidara (AM)
1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in treating the transaction relating to accommodation relating to entry as genuine and ignore the findings of the AO.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in ignoring the information received from investigation Wing regarding providing accommodation entries.
3. It is humbly prayed that the present case is covered under exception clause no 3.1.h of the CBDT Circular no 05/2024 elated 15.03.2024.
4. The order of the Ld.CIT(A) may be vacated & that of the AO may be restored.
5. The appellant craves leave to add, amend, alter or delete any ground of appeal.
2. From the assessment order, it is observed that the Ld. AO made an addition of Rs. 9.5 lakh stating that the appellant received accommodation entry from M/s. Consultshah Financial Services (P) Ltd. and failed to explain
2 Manoj Gunomal Rochlani the transaction of Rs. 9.5 lakh and hence this amount was added under section 68 of the Income Tax Act.
Aggrieved by the order of Ld. AO, an appeal was filed before Ld. CIT(A) where it was held that Revenue does not have any evidence to show that the appellant received the accommodation entry and hence notice under section 148 of the Act was held as invalid. The addition was deleted by Ld. CIT(A) stating that there was no evidence that appellant took accommodation entry except some information received from Investigation Wing.
Aggrieved by the order of Ld. CIT(A), Revenue filed an appeal with the above grounds of appeal.
During the hearing proceedings, Ld. DR relied on the Grounds of Appeal, assessment order and two cases law. The Ld. DR raised a primary ground that the Revenue did not challenge the reopening which was quashed by Ld. CIT(A). Secondly, on merits also, it was clear that there is absolutely no evidence that his name is appearing in the list of persons where accommodation entry was supported to be taken from Sanjay Shah, who was searched.
6. Heard both sides and perused the written submission of both parties. The Bench observed that the list of names where certain information relating to accommodation entries was received by Revenue, this list does not contain the name of appellant and there is no corroborative evidence to show that appellant received an accommodation entry. Even though, several cases-law were relied on by both parties, the crux remains on the crucial fact whether appellant received any accommodation entry to make an addition under section 68 of the Act. In this case, the Revenue could not prove that the appellant’s name is there in the list of accommodation entries provided in the Investigation Wing of Income Tax Department. Secondly, the Revenue did not challenge the quashing of reopening of assessment by Ld. CIT(A). In 3 Manoj Gunomal Rochlani view of the same, on the reopening issue as well as on merits that appellant took an entry, the addition had to be quashed.
The appeal of the Revenue is dismissed.
Order pronounced in the open Court on 14/10/2025.