SHWETA MANISH JAIN,AHMEDABAD vs. THE ITO, WARD-1(2)(3), AHMEDABAD

ITA 2123/AHD/2025Status: DisposedITAT Chandigarh01 October 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the addition under Section 68 was not sustainable based solely on the information that M/s Niyati Traders was an accommodation entry provider. The Tribunal noted that the assessee recorded the transactions as sales in its regular books, received consideration through banking channels, included the sales in its turnover, and offered the resultant profit to tax. The burden was on the Revenue to demonstrate, with cogent material, that the transaction was not a sale or that the money received was not sale consideration. The Tribunal found that the Revenue had not established a specific nexus between M/s Niyati Traders' alleged accommodation entry operations and the assessee's specific transactions. The assessment record lacked independent inquiry by the AO regarding the specific transactions. Therefore, the CIT(A)'s order was set aside, and the matter was restored to the AO for fresh adjudication after examining the evidence relating to the impugned transactions, providing the assessee with an adequate opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Shweta Manish Jain, an individual proprietor of Mohit Supari Depot, filed her return of income for Assessment Year 2019-20. The Assessing Officer (AO) reopened the assessment based on information from DDIT (Investigation), Bhavnagar, alleging that M/s Niyati Traders provided accommodation entries. The AO treated the entire receipts of Rs. 1,79,97,196/- from M/s Niyati Traders as unexplained under Section 68 of the Income Tax Act, 1961. The assessee appealed to the CIT(A), arguing the transactions were genuine and supported by documentary evidence, citing previous deletions of similar additions. The CIT(A) confirmed the addition, finding the assessee failed to establish the genuineness of the transactions. The assessee then appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the Tribunal had to decide if the receipts of Rs. 1,79,97,196/- from M/s Niyati Traders, treated as unexplained credits under Section 68 of the Income Tax Act, 1961, were genuine sales or accommodation entries. Assessee's Contention: The assessee argued that the transactions were genuine and supported by documentary evidence. Reliance was placed on previous orders involving the same party and assessment years where similar additions were deleted. Revenue's Contention: The Revenue contended, based on information from the Investigation Wing, that M/s Niyati Traders was an accommodation entry provider. The CIT(A) confirmed the addition, stating that banking channel receipts or GST filings do not prove genuineness when the counterparty is found to be not genuine. The Revenue's primary basis for the addition was the alleged accommodation entry nature of M/s Niyati Traders.

Which sections of the Income-tax Act were involved?

Section 68,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-SHRI RAHUL CHAUDHARY

For Appellant: Shri S.N. Divatia, AR &, Shri Samir Vora, AR
For Respondent: Shri Arvind Kumar Namdeo, Sr. DR
Hearing: 08.07.2026Pronounced: 01.10.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

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This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as “Ld. CIT(A)”), National Faceless Appeal Centre (NFAC), Delhi vide order dated 10.10.2025, under section 250 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Year 2019-20. 2. The assessee has raised several grounds; however, the substantive grievance relates to confirmation of addition of Rs.1,79,97,196/- under section 68 of the Act in respect of receipts from M/s Niyati Traders, treated by the

The order continues below.

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