PREM CHAND JAIN,NEW DELHI vs. ITO WARD - 63(2), NEW DELHI

This appeal by the assessee is preferred against the order of the CIT(A)-18, New Delhi dated 31.08.2020 pertaining to A.Y. 2007-08

The grievance of the assessee read as under :-

Representatives of both the sides were heard at length. Case record carefully perused and the relevant decision brought to my notice is considered.

Briefly stated the facts of the case are that the assessee filed the original return of income on 29.10.2007 declaring nil income. The return was processed u/s. 143 (1) of the Act.

A letter was received from the office of Chief Commissioner of I. Tax, Delhi-I, New Delhi who forwarded letter received from the Commission of Income Tax, Central- II, New Delhi alongwith a CD containing the details of accommodation entries provided by Sh. Rakesh Gupta, Vishesh Gupta and Navneet Jain. On the basis of these information the AO issued notice u/s. 148 of the Act.

On examining the list of accommodation entries provided by the parties mentioned here in above the AO noticed that the assessee has taken following entries :-

The assessee was asked to explain transaction and the assessee filed a detailed reply alongwith affidavit executed by Sh. Prem Chand dated 23.03.2015 stating that “As regards the alleged entries provided by M/s. Sh. Bankey Bihari Trading Co. & M/s. Om Agencies to the tune of Rs.9,80,383/- and Rs.27,20,545/- respectively nature of purchase can be verified from the copy of account of the above in the books of account M/s. Prabhu Dayal Chand already filed dated 03.11.2014”, However, before concluding and coming to a decision it would be wise to discuss the issues mainly involved where the A/R of the assessee though out the assessment proceedings has tried to prove all through his submission/ replies filed before the undersigned that the purchase from the parties as mentioned below were genuine.

In support the assessee produced parties wise purchase details, month wise sale details, copy of bank statement relating to payment made, purchase account etc. to substantiate his claim that the purchases made by the assessee from party were genuine and not in the nature of accommodation entries. The reply of the assessee did not find any favour with the AO who concluded the assessment by making addition of Rs.37,00928/- u/s. 69C of the Act.

The assessee agitated the matter before the CIT(A) but without any success.

Before me the counsel for the assessee drew my attention to several decisions of the coordinate Benches on the same facts and pointed out the coordinate Benches have quashed the reassessment order.

Per contra the DR strongly supported the findings of the lower authorities.

I have given a thoughtful consideration to the orders of the authorities below and have accordingly perused the decision of the coordinate Benches. I find that this Tribunal in was seized identical issues and on identical facts held as under :-

In another decision this Tribunal in and 7061/Del/2017 was again seized with similar situation wherein it followed the decision of the Tribunal in the case of Rajender Prasad the relevant findings read as under :-

As no distinguishing decision has been brought to my notice and parity of facts. The two decisions discussed here in above I hold that the assumption of jurisdiction is bad in law and the additions made u/s.69 C of the Act has no legs to stand. The appeal filed by the assessee is accordingly allowed.