DEPUTY COMMISSIONER OF INCOME TAX, AGRA vs. GLOBAL IMPEX, MATHURA

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI M BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 87/Agr/2026 Assessment Year: 2018-19 DCIT, Circle-1(1)(1), Agra- Vs. Global Impex, 6/3A, Near Miyawali 282002 Dharamshala, Krishna Nagar, Mathura-281001 PAN : AAPFG2857A (Appellant) (Respondent) Assessee by Shri Sahil Garg, C.A. Department by Shri Anil Kumar, Sr (DR)

Date of hearing 18.05.2026 Date of pronouncement 21.05.2026 ORDER

PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 20.11.2025 passed in Appeal No NFAC/2017-18/10303672 by the ld Commissioner of Income Tax, NFAC (Delhi) [hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act), for the A.Y. 2018-19, wherein ld CIT(A) has deleted the addition of Rs. 69,50,000/-, made vide assessment order dated 15.03.2023 passed u/s. 147 r.w.s 144 r.w.s 144B of the Act. 2. The brief facts of the case state that, respondent assessee firm filed its return of income, for A.Y. 2018-19, on 08.10.2018, declaring total income at Rs. 33,91,140/-. The assessing officer received an information

ITA No.87/Agr/2026 that assessee firm has involvement in providing accommodation entry through bank accounts. A sum of Rs. 19,50,000/- and Rs. 50,00,000/-, was credited in assessee’s bank account no. 510341000682656 maintained with the Corporation Bank and bank account no. 3333214000005 maintained with Canara Bank respectively. A show cause notice u/s. 148A(b) of the Act was issued to the respondent assessee. Assessee filed the required details like bank account statement, ledger stock register, purchase and sale invoices etc. Thereafter an order u/s. 148A(d) of the Act was passed on 31.03.2022 in which the assessing officer acknowledged the copy of purchase invoices and ledger register received from Neha Enterprises. Similarly purchase invoices and ledger copy of confirming purchase of actual items from Sai Trading Company were verified but the assessing officer observed that M/s AK Trade and Distributor, controlled by Shri Ranjeet Singh, has involved in providing accommodation entry. The case was reopened for verification of facts as regards M/s Sai Trading Company having received the same value from M/s AK Trade and Distributor’s account. Assessing officer issued order u/s. 148A(d) of the Act. Subsequent notice u/s. 148 of the Act was issued on 31.03.2022, however, no return was filed in response to section 148 of the Act by the assessee. Statutory notices u/s. 142(1) and show cause notice u/s. 144 was also issued but remained unanswered by the assessee. Hence, the ex parte assessment order u/s. 144 of the Act was passed by the assessing officer 2 | P a g e

ITA No.87/Agr/2026 and added the aforesaid credited amount of Rs. 69,50,000/- as unexplained u/s. 68 of the Act r.w.s 115BBE of the Act. 3. Aggrieved, assessee preferred an appeal before ld CIT(A), who deleted the aforesaid addition. 4. The respondent revenue has raised the following grounds under appeal: “1. That the CIT(A) has erred in law and on facts in deleting the addition of amounting to Rs.69,50,000/- on account of deemed income under section 68. 2. That the above case is falling under the exceptions laid down in Para 3.1(h) (cases involving organized tax evasion including cases of bogus capital gain/loss through Penny stocks and cases of accommodation entries) in the letter of CBDT Circular No. 5/ 2024 date 15.03.2024, for filing of second appeal. 3. That the appellant craves leave to add or delete or alter or modify any one or more ground (s) of appeal during the appellate proceedings.” 5. Perused the records and heard ld Sr DR for the appellant revenue and ld representative for the respondent assessee. 6. Ld DR has submitted that ld CIT(A) had deleted the impugned addition on the basis of additional evidence which was not examined by the assessing officer and, thus, not sustainable. Ld DR has supported the assessment order. 7. Ld AR supported the impugned order. 8. The main point for determination under appeal is as to whether ld CIT(A) has erred in deleting the addition of Rs. 69,50,000/- as unexplained money u/s. 68 of the Act r.w.s. 115BBE of the Act? 9. The relevant paras 7.5 and 7.6 of the impugned order read as under:

3 | P a g e

ITA No.87/Agr/2026 “7.5 In ground no. 4 & 5 appellant has challenged addition of Rs. 69,50,000/- both on fact and law u/s 68 r.w.s 115BBE of the Act. Appellant has challenged the addition on the ground that it has been made ignoring the submission of appellant made before JAO in response to notice u/s 148A(b) of the Act and ignoring the fact that there was no such credit in the books of appellant. Appellant argued that there was no credit entry in the books of account of appellant from M/s Neha Enterprises of Rs. 19,50,000/- and Rs. 50,00,000/- from M/s Sai Trading Company. Therefore, addition u/s 68 is bad in Law. The L'd AO has made an addition of 69,50,000 under section 115BBE by virtue of provision of Section 68 of the IT Act 1961, without examining the fact that amount of Rs. 69,50,000.00 is the sum paid against purchases made by the appellant from M/s Neha Enterprises and M/s Sai Trading Company. It was noticed that all Bank Account Statements from which payments made, Copy of Stock register depicting the Stock In/Stock Out, Copy of Ledger statements, Copy of GSTR-3B and copy of Sale and Purchase invoices has been provided to JAO in response to notice U/s 148A(b). The provision of Sec 68 of income tax act, 1961 specifically states the following:- "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless, - a. the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and b. such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:" The provision of section 68 of the act specifically states that "where any sum is credited in the books of the assessee" and in this case the L'd AO has failed to examine the fact that the amount of INR 69,50,000.00 is the payment made by the appellant and not the amount credited in the books of account of appellant. Appellant provided necessary details like proof of payment through banking channel, date of payment, name of parties nature of payment explaining the nature of purchase and identity and genuineness of purchase at the time of reopening itself. Ld. AO has not issued any 133(6) and not doubted to the evidence furnished by appellant at the time of reopening of assessment. During assessment proceeding Ld. AO has not conducted any independent enquiry to prove that cash was taken back by the appellant from the purchase parties. Ld. AO has not established cash trail from the alleged purchase parties by examining bank account or conducting any other independent enquiry. Invocation of Sec 68 of income tax act 1961 in the case of purchase where payment has been made from the books of appellant by debit entry, is void and against the provision of Sec -68 of Income tax act 1961. Section 68 was adopted as a measure to 4 | P a g e

ITA No.87/Agr/2026 prevent generation and circulation of unaccounted money with stringent taxation of 115BBE. For invoking section 68 the existence of books of account needs to be proved as first ingredient and a credit entry in the books of account, is second most important ingredient and absence of satisfactory explanation is the third ingredient. Ld., AO has failed to prove all three limbs of section 68 in appellant case as there was no credit from the alleged party in the books of account and a reasonable explanation was provided by appellant at the reopening of assessment level. Appellant has discharged his primary onus by proving that no credit was found from the impugned two parties in his books of account. Appellant has duly prove that sale transactions were carried out by the impugned two entities during the normal course of his business and identity of purchaser and genuineness of transaction were proved at the reopening stage and burden of proof shifted to revenue. 7.6 During assessment stage AO has not examined the alleged transactions by issuing 133(6) and examining the correct nature of impugned transactions. AO has not analysed bank accounts, ledger account and invoices and proved that purchases were doubtful. No cash trail was established by AO whereas appellant argued that all payments were made through banking channel and no outstanding creditor were created. Appellant argued that his sales were not doubted as they were made to M/s Larsen & Toubro Ltd. for development of Unnao to Lucknow Expressway. It is clear that actual sales were completed with a reputed firm and genuineness of sales is not doubted by revenue. Stock Book is maintained and submitted before AO at the time of reopening. Appellant also argued that there cannot be genuine sale without a genuine purchase. Books of account were maintained and duly audited in this case and Ld. AO failed to point out any defect in the books of account u/s 145(3) of the IT Act. AO argued that his Gross Profit and Net Profit ratio was consistent during the period and Ld. AO did not raise any doubt about the GP and NP ratio. Appellant argued that his purchases are supported by stock registers, bills and payment were made through banking channel and related party confirmed the transactions and Ld. AO has not brought any evidence to show that the amount was recycled back to the assessee. Hon'ble Supreme Court had laid down a golden ratio in Dhakeswari Cotton Mills Ltd. v/s CIT 26 ITR 775 (SC) that suspicion alone without there being evidence specific to transaction cannot become the basis for creating charge for levying tax as each transaction has to be independently enquired. Jurisdictional Allahabad High Court in the case of M/s Kesharwani Sheetalya Sahsaon v/s CIT Allahabad in their judgment dated 24.04.2024 has held that addition made based on presumptions, conjectures are not legally sustainable. Credit entry is must in the books of account of appellant, only payments by the appellant do not attract addition u/s 68 of the Act. Therefore, Ground no. 4 and 5 are allowed.” 10. From the perusal of the impugned order it is clear that all relevant evidences like sale and purchase invoices, bank statements, stock register ledger etc. were furnished by the assessee before A.O. even in response to the notice u/s. 148A(b) of the Act. Admittedly, there is no such credit entry 5 | P a g e

ITA No.87/Agr/2026 in the books of appellant assessee. The books of accounts are duly audited. Appellant’s sales were not doubted by the A.O. The gross profit and net profit ratio was found to be consistent. The purchases are supported with stock register, bills and payments which were made through banking channels only. Ld CIT(A) has, thus, rightly held that the said addition made by the assessing officer are based on assumption. The addition not having been made on the basis of credits in the assessee’s books is beyond the scope provided u/s. 68 of the Act. We, thus, do not find any error or any infirmity in the impugned order and, thus, sustainable. The aforesaid point is accordingly determined in negative against the appellant revenue and in favour of the respondent assessee. The appeal is liable to be dismissed. 11. In the result, the appeal of the revenue is dismissed. Order pronounced on – 21.05.2026

Sd/- Sd/- (M BALAGANESH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 21.05.2026

Aamir Siddiqui, PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

6 | P a g e