INCOME TAX OFFICER WARD-2(1), FARIDABAD, FARIDABAD vs. SH. RAJINDER PRASHAD SINGHAL, FARIDABAD

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. 3612/Del/2025 A.YR. : 2016-17 ITO, WARD 2(1), SH. RAJINDER PRASHAD FARIDABAD VS. SINGHAL, CGO COMPLEX, BLOCK NH-4, 2106, SECTOR-16, FARIDABAD NIT, FARIDABAD, HARYANA-121001 HARYANA -121001 (PAN: ANGPS6704G)

(APPELLANT) (RESPONDENT)

Assessee by : None Revenue by : Sh. Raghubir Singh, Sr. DR Date of hearing : 23.06.2026 Date of pronouncement : 23.06.2026 ORDER PER MAHAVIR SINGH, VP:

The Revenue has filed the Appeal against the Order of the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi dated 24.3.2025, relating to assessment year 2016-17. 2. The grounds raised in the Revenue’s appeal read as under:- 1(i). Whether the impugned order given by the Ld. CIT(A) is perverse on both on the law and the facts of the case? (ii). Whether the Ld. CIT(A) is right in law and on the facts of the case in deleting the addition of Rs. 59,68,521/- on account of unexplained credits u/s. 68 of the Income Tax Act despite of the facts that the assessee failed to prove the identity, creditworthiness and genuiness of the transaction of Rs.

59,68,521/- is just an accommodation entry? The information received from the O/o Income Tax Officer, Ward II(4), Faridabad vide his letter No. 607 dated 18.1.2019 during the assessment proceedings in the case of Sh. Sunil Kumar Garg, M/s Agarwal Trading Company for the AY 2016-17 the statement of the assessee was recorded on oath wherein he admitted that he had made bogus sale / purchase bills to various parties and Sh. Rajinder Prashad Singhal, Prop. SR Rubber Industries is one of the beneficiary who has obtained bogus bills by making bogus purchase of Rs. 59,68,521/- during the FY 2015-16 relevant to AY 2016-17. 3. At the outset, it is noted that the tax effect involved in this appeal is below

the prescribed limit of Rs.60 lacs, as stipulated in CBDT Circular No.09/2024

dated 17.09.2024 in filing the appeal before the Tribunal, hence, the appeal of the

revenue deserve to be dismissed. However, Ld. DR vehemently supported the

orders of the AO and filed the written submissions which reads as under:- “It is humbly submitted that the above appeal lies in the exception defined in Circular No. 05/2024 dated 15.3.2024 (copy enclosed) at Point No. (h) of Para No. 3.1 where it says “Cases involving organized tax evasion including cases of bogus capital gain/ loss through penny stocks and cases of accommodation entries” and the instance case issue of accommodation entries is involved.

Bench sought a query from the Ld. DR as to how the above appeal lies in the

exception defined in Circular No. 05/2024 dated 15.3.2024, but he was unable to

convince the same. However, we note that Ld. CIT(A) while adjudicating the

merits of the case has observed as under:-

5.1.3 Perusal of the re-assessment order, it is noticed from the page no. 2 at second para that the AO has issued notice u/s. 133(6) of the Act only to the appellant whereas he had purchased the goods several suppliers. It is also noticed that the AO has only relied the statement of Shri Sunil Kumar Gar, Prop. M/s Aggarwal Trading Company. All these facts clearly established that the AO simply generalized the statements in the re-assessment order that Shri Rajinder Prashad Singhal, Prop. S.R. Rubber Industries is one of the beneficiary who has obtained bogus bills by making bogus purchase of Rs. 56,68,521/- during the FY 2015-16 but could not understand the facts of the case as well as verification of the details / documents where the assessee has provided the relevant details / documents vide its reply dated 4.3.2022, 14.3.2022 & 28.3.2022 but the AO failed to reach the genuineness of the case.

5.1.4 After considering above facts, it reveals that the appellant has filed all the evidences concerning transactions to establish the identity and creditworthiness of the lenders and prove the genuineness of the transactions and the AO has not carried out any further verification. Hence, the addition cannot be made in the hands of the appellant. In light of the foregoing facts and findings, the appeal on these grounds stand allowed.”

crystal clear that the assessee has filed all the evidences concerning transactions to

establish the identity and creditworthiness of the lenders and prove the

genuineness of the transactions and the AO has not carried out any further

verification, hence, addition in dispute is not sustainable in the instant case, as a

result thereof, the Revenue’s plea that the appeal lies in the exception defined in

Circular No. 05/2024 dated 15.3.2024 at Point No. (h) of Para no. 3.1 of the said

circular is not justified and deserve to be rejected.

to dismiss the appeal of the Revenue in the light of the aforesaid Circular

No.09/2024 of the CBDT dated 17.09.2024, as not maintainable. Resultantly, the

appeal of the Revenue is dismissed, on account of low tax effect. However, if on

a later date, the Revenue finds that the tax effect in dispute in the aforesaid appeal

is more than the limit prescribed or it is protected by any of the exceptions

provided in the CBDT Circular, the Revenue shall be at liberty to approach the

Tribunal for recalling the order and reinstitution of the appeal for adjudication on

merits. The Tribunal shall consider such application, as per the extant law.

aforesaid.

Order pronounced in open court on 23.06.2026.

Sd/- Sd/- (MANISH AGARWAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT

SRBHATNAGAR

Date: 25-06-2026