ACIT, CIRCLE-49(1), NEW DELHI vs. KULDEEP CHHABRA, NEW DELHI

ITA 6506/DEL/2026Status: DisposedITAT Delhi07 October 2026AY 2018-1910 pages
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What were the facts?

These appeals by the Revenue challenge orders of the NFAC for AY 2018-19 and AY 2019-20. The assessee, Kuldeep Chhabra, was subject to reassessment proceedings under Section 147/148 based on information from the Investigation Wing regarding alleged accommodation entry providers, M/s K.K. Spun India Ltd. and Shri Daya Shankar. For AY 2018-19, additions of Rs. 46,65,000/- under Section 68 for bogus purchases and Rs. 46,650/- under Section 69C for commission were made. For AY 2019-20, additions of Rs. 32,73,010/- for alleged bogus accommodation entry and Rs. 81,825/- for estimated commission were made. The CIT(A) granted full relief to the assessee in both years. The Revenue is in appeal before the ITAT.

What did the Tribunal hold?

For AY 2018-19 (ITA 6506), the Tribunal held that while the transactions might involve non-filers and unserved summons, and documents were not uploaded, the assessee's claim of banking channel transactions persuades a middle path. The Tribunal confirmed 3% of the allegedly dubious purchases and directed relief on the remaining amount. The addition on account of estimated commission was directed to be deleted as it was based on surmises and conjectures. The Tribunal found that the addition under Section 69C for AY 2019-20 was made solely on the basis of third-party information and the statement of the alleged entry operator without independent enquiry, verification, or evidence of goods movement or payment. The assessee demonstrated no such purchases in its books or GSTR-2A. The Tribunal noted that the AO did not reject the assessee's books of account or declare sales. Therefore, the addition of Rs. 32,73,010/- under Section 69C was deleted. The addition of Rs. 81,825/- for commission was also deleted as it was based on assumption and estimation without supporting evidence. The ratio for deleting the additions is that the foundational requirement for invoking Section 69C is the actual incurrence of expenditure, which was not established by the Revenue with cogent evidence, and additions based solely on third-party statements without independent verification are unsustainable. The Tribunal directed the deletion of Rs. 32,73,010/- and Rs. 81,825/- for AY 2019-20.

What were the issues?

1. Whether, on the facts and in law, the CIT(A) erred in deleting the addition of Rs. 46,65,000/- made under Section 68 on account of accommodation entries/bogus purchases, ignoring incriminating material and the admission of Shri Aaditya Jain regarding provision of accommodation entries in lieu of cash and commission, and whether the CIT(A) erred in holding impugned transactions as genuine merely on the basis of invoices, ledger accounts, and banking channel payments, without appreciating that such evidence does not establish genuineness in accommodation entry cases? (Revenue's grounds 1, 2, 3). 2. Whether, on the facts and in law, the CIT(A) erred in deleting the addition of Rs. 46,650/- made under Section 69C on account of commission paid for obtaining accommodation entries, despite material brought on record by the AO? (Revenue's ground 4). 3. Whether, on the facts and in law, the addition of Rs. 32,73,010/- made under Section 69C for alleged bogus accommodation entry and Rs. 81,825/- for estimated commission for AY 2019-20 are sustainable, when the assessee denies any transaction with Shri Daya Shankar and the additions are based solely on third-party information and the statement of the alleged entry operator without independent verification or cross-examination? Assessee's contentions (implied from AR's arguments and Tribunal's findings): Transactions were through banking channels, entities were GST registered, additions cannot be sustained solely on third-party statements obtained at the assessee's back, no transaction occurred with Shri Daya Shankar or entities controlled by him, and purchases/expenditure are not reflected in books of account or GSTR-2A. Revenue's contentions (implied from DR's arguments and Tribunal's findings): Incriminating material gathered during search and post-search investigations, entities were dummy concerns controlled by Shri Aaditya Jain who admitted providing accommodation entries, summons to entities were unserved, Shri Daya Shankar admitted providing accommodation entries, and there is a clear trail of evidence showing transactions with Shri Daya Shankar.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 147,Section 148,Section 250,Section 145

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI SANJAY AWASTHI

For Appellant: Shri Ravi Pratap Mall, Adv
For Respondent: Shri Novel Roy, Sr. DR
Hearing: 10.09.2026

PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1.

These two appeals pertain to the same assessee for assessment years 2018-19 (ITA 6506) and AY 2019-20 (ITA 6507). Since these two appeals pertain to the same assessee, hence, we deem it fit to dispose of the two cases through a single order.

2.

ITA 6506 arises from order dated 24.03.2026, passed u/s 250 of the Income Tax Act, 19

The order continues below.

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