INCOME TAX OFFICER, DELHI vs. NANDAN GUPTA, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI

Before Shri Mahavir Singh, Vice President And Shri Manish Agarwal, Accountant Member

ITA No. 1232/Del/2025 : Asstt. Year : 2018-19

ITO, ROOM NO. 1411, E-2 Vs NANDAN GUPTA, BLOCK, CIVIC CENTRE, 92-B, ANAND NAGAR, DELHI -110 002 INDERLOK, DELHI – 35 [PAN: BTDPG1480P) (APPELLANT) (RESPONDENT) PAN No. AKDPM4000H

AND C.O. NO. 106/Del/2026 (IN ITA NO. 1232/DEL/2025) Asstt. Year : 2018-19

NANDAN GUPTA, Vs ITO, ROOM NO. 1411, E-2 BLOCK, 92-B, ANAND NAGAR, CIVIC CENTRE, INDERLOK, DELHI – 35 DELHI -110 002 [PAN: BTDPG1480P) (APPELLANT) (RESPONDENT) PAN No. AKDPM4000H

Assessee by : Sh. A.T. Panda, Adv. Revenue by : Ms. Ankush Kalra, Sr. DR.

Date of Hearing: 20.04.2026 Date of Pronouncement: 08.07.2026

ORDER Per Mahavir Singh, Vice President : The Revenue has filed the instant appeal and Assessee has filed the Cross Objection and both are arising out of the order of the Ld. Commissioner of Income Tax(Appeals)/National Faceless

Appeal Centre (NFAC), Delhi (in short CIT(A)) dated 11.12.2024 passed in Appeal No. NFAC/2017-18/10237679, pertaining to assessment year 2018-19. The assessment was framed by the AO, on 27.3.2023 u/s. 147 r.w.s. 144B of the Act. Since the revenue’s appeal as well as assessee’s cross objection are inter-connected, hence, the same were heard together and disposed of by this common order for the sake of convenience, by dealing first with Revenue’s Appeal. 2. The solitary issue raised by the Revenue in its appeal is as regards to deletion of addition of Rs. 61,27,750/- and deletion of addition of Rs. 11,13,248. 3. Brief facts of the case are that the assessee case was reopened by noting that the assessee has taken accommodation entry in the guise of purchase amounting to Rs. 72,40,998/- from Madanlal Madho Prashad and M/s Kalki Trading Company. Show cause notice dated 11.3.2023 was issued to the assessee and in response to the same, assessee replied by denying entering into any accommodation entries in the form of bogus sale / purchase with Madanlal Madho Prashad of Rs. 857780/-, Madanlal Madho Prasad of Rs. 769250/- M/s Kalki Trading Company of Rs. 5269970/- and M/s Kalki Trading company of Rs. 343998/- as alleged. It was submitted before the AO that the assessee is well known merchant /trader in pulses and cereals. During the course of business, the assessee deals with many firms and individuals and all sale / purchases of assessee are genuine. There are no bogus sale / purchase or any transactions for entering into accommodation entries. The assessee denied that income of Rs. 72,40,998/- chargeable to tax has escaped assessment as alleged in notice. In this case order u/s. 148A(d) of the act was passed on 31.3.2022 and thereafter, notice u/s. 148 of

the Act was issued on 31.3.2022. A search was conducted in the case of Sh. Ashok Kumar Gupta vide which it was informed that Sh. Ashok Kumar Gupta used to provide bogus billing / entry through various entities registered in his or his members name. Further, AO noted that as per the information provided, it is established that Sh. Ashok Kumar Gupta has provided bogus bill/ entry to Ms. Nandan Gupta through following entities:- S.No. Source Source Proprietor/ Relationship Amount of PAN PAN Partner/Director with Ashok transaction name 1 AABPG Madan Madho Prashad Father in law of 557780 0387R lal son Madho Prashad 2 AABPG Madan Madho Prashad Father in law of 7609250 0387R lal son Madho Prashad 3 ATLPG Kalki Deepesh Goel Servant 5269970 2703L Trading Compa ny 4 ATLPG Kalki Deepesh Goel Servant 343998 2703L Trading Compa ny Total value of 7240998 transaction

3.1 Further, the AO noted that after due analysis of the relevant information and verification from the Department’s database, it was observed that Nandan Gupta (Proprietor of Jaidev Mal and Company) has taken accommodation entry from Madanlal Madho Prashad and M/s Kalki Trading Company amounting to Rs. 72,40,998/-. It is also observed that since assessee has failed to prove the genuineness of the said transaction of Rs. 72,40,998/- as sales/purchases because the evidences shows that the transaction is recorded in books, however, the allegations itself is that there is no

actual business that has taken place, it is only a paper transaction where book entry is made without any corresponding transfer of goods. These transactions are recorded in the books only to claim the non-genuine expenses to reduce taxable income. AO further noted that assessee has failed to discharge the onus, hence, the additions amounting to Rs. 11,13,248/- and Rs. 61,27,750/- were disallowed and added to the total income of the assessee by assessing the same at Rs. 77,38,048/-. 4. Being aggrieved with the assessment order, assessee filed appeal before CIT(A) who vide his impugned order under consideration has partly allowed the appeal of the assessee. The CIT(A) deleted both the additions as made by the AO. Against the Ld. CIT(A)’s, action, revenue is in appeal before this Tribunal. 5. Ld. DR vehemently supported the order of the Ld. CIT(A) and reiterated the contents of the grounds of appeal raised by the revenue. 6. Per contra, Ld. AR relied upon the order of the Ld. CIT(A). 7. We have heard the rival contentions and perused the records. We find that Assessee, during the assessment proceedings has filed the following documents:- i) Acknowledgement of return with computation of income of the assessee; ii) Tax Audit Report, trading and profit and loss account of the appellant as on 31.3.201; iii) Bank statement with bank book of Jaidev Mal and Company; (iv) Form 26AS; (v) Stock register of Channa, Arhar, Moong Dal, Peddy etc; (vi) Purchase /sale invoices with summary of items;

(vii) Confirmation of parties from purchases and sales were made; (viii) Invoice of purchase and sales made with truck no through which material was sent and ; (ix) GST return for 9 months. 7.1 It is noted that the AO except for general comments has not pointed any discrepancy qua the documentary evidence filed by the assessee. It is undisputed fact that assessee against gross sales of Rs. 12,56,58,5781/- has declared profit of Rs. 16,90,472/-. The gross sales were to the tune of Rs.12,56,58,571/-and total purchase were Rs. 11,70,90,542/- out of which purchase from Madanlal Madho Prashad and Kalki Trading Company was only that of Rs. 61,27,750/- i.e. only 5.23% of total purchase. Ld. CIT(A) noted that since the details of stock of Channa, Arhar, Moong Dal, Peddy, Masoor, Rice etc. were filed alongwith detail of parties from whom purchases were made with bill numbers giving quantity purchase as well as rate and similarly, party-wise details of sales, containing quantity and the rate at which the material was sold, therefore, without cogent material or such other investigation, there was no reason for the AO to say that genuineness of purchase and sale of Rs. 72,40,998/- was not proved. The AO has accepted the trading result, hence, the addition of Rs. 61,27,750/- made by disallowing the said purchases from the said two parties, ought not to have been made merely the party has not appeared in response to the notice u/s. 133(6) of the Act, as has been held in ITO vs. Vaman International P. Ltd. (ITA NO. 794/Mum/2015) dated 16.11.2016, CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. (2015) 372 ITR 619 and CIT vs. Nangalia Fabrics (P) Ltd. (2014) 220 Taxman 17 (Guj.), thus, Ld. CIT(A) rightly deleted the addition of Rs. 61,27,750/-

made by the AO u/s. 28 of the Act by disallowing the purchases is not sustainable and hence, the same was rightly deleted, which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on this issue and reject the ground raised by the Revenue. 7.2 In so far as addition of Rs. 11,13,248/- relating to disallowance of sales made to the same two parties i.e. Madan Lal Madhro Prasad and Kalki Trading Company u/s. 68 of the Act is concerned, it is noted that the AO has made the said disallowance summarily and has not brought on records any such basis or facts or such investigations to show or prove that, the assessee had not made any such sales to the said two parties. Since the AO have accepted the trading results, the addition in dispute ought not to have been made merely because the party has not responded to the notice u/s. 133(6) of the Act. It is noted that the assessee has filed the relevant details to show the existence of parties, their identity, creditworthiness and genuineness of the transaction. As the identity of the person (who has sent the money/credit) has been established as they are having PAN and they are filing returns. The genuineness of the transaction is established from the fact that, both the acceptance and repayment of amount has been made through banking channels and the confirmation of the payer’s also support the factum of credits and creditworthiness of the lenders can be established from the bank statements and relevant records. We find that Ld. CIT(A) relied upon the decision of the Hon’ble Bombay High Court in the case of CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. 372 ITR 619 (Bom.) and the SLP filed by the Revenue in the said case has been dismissed vide order dated 30.,8.2013 (SLP Civil No. 27890 of 2013). Thus, the assessee has discharged its burden by

submitting the information in the assessment proceedings and the AO has failed to conduct the further enquiries and independent investigation of his own and not rely merely on the third party statements or such reports, if any. Thus, Ld. CIT(A) rightly deleted the addition of Rs. 11,13,248/- made by the AO u/s. 68 of the Act by disallowing the purchases is not sustainable and hence, the same was rightly deleted, which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on this issue and reject the ground raised by the revenue. 8. In the result, the revenue’s appeal is dismissed. 9. As regards assessee’s cross objection is concerned, since we have already upheld the action of the Ld. CIT(A) of deleting the quantum additions, as aforesaid, thus, the assessee’s cross objection has become infructuous and dismissed as such. 10. In the result, revenue’s appeal as well as assessee’s cross objection stand dismissed, in the aforesaid manner. Order Pronounced in the Open Court on 08/07/2026.

Sd/- Sd/- (MANISH AGARWAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT SRBhatnaggar Date: 08-07-2026