INCOME TAX OFFICER WARD 1(2)(3), AHMEDABAD vs. KANTILAL BAGDAJI GOYAL, AHMEDABAD

Shri Abhijit, the Ld. Sr. DR, submitted that an information was received by the AO that the assessee had taken accommodation entry of Rs. 59,97,950/- from one Shri Sanjay Tiberwal. He explained that a search action u/s. 132 of the Act was conducted in the case of said Shri Sanjay Tiberwal on 12.04.2019 wherein he had admitted that he was providing accommodation entries to various parties against commission. On the basis of this information the AO had made addition of Rs. 59,97,950/- being accommodation entry taken by the assessee from the concern of said Shri Sanjay Tiberwal. He submitted that the Ld. CIT(A) was not

Per Contra, Shri K. C. Thaker, the Ld. AR of the assessee, submitted that the assessee has not made any transaction of Rs.59,97,950/- through Shri Sanjay Tiberwal or his concerns and this allegation was out-rightly denied in the submissions made before the AO. However, the AO had ignored the submissions of the assessee and made the addition in a routine and mechanical manner without verifying the facts. The Ld. AR contended that the AO was not correct in making the addition by treating a non-existent transaction as an accommodation entry. He submitted that the Ld. CIT(A) had rightly appreciated the facts of the case and deleted the addition. He, therefore, strongly supported the order of the Ld. CIT(A).

We have considered the rival submissions. It is found that the AO had made the addition of Rs. 59,97,950/-, on account of accommodation entry taken from Shri Sanjay Tiberwal. However, the exact date of transactions and the name of the persons/concerns from whom this amount was received is nowhere mentioned in the assessment order. When the assessee had out-rightly denied the transaction in the course of assessment proceeding, the AO should have made inquiry and verified the facts about receipt of the accommodation entry amount or otherwise. The AO had made the addition in a mechanical manner without verifying the facts of the case and also without controverting the submissions of the assessee. It is found that Ld. CIT(A) had rightly appreciated the facts of the case and given the following findings:

The Revenue has been unable to controvert the findings of Ld. CIT(A). The addition made by the AO was bereft of any evidence. We, therefore, do not find any reason to interfere with the findings of Ld. CIT(A). Accordingly, the order of the Ld. CIT(A) is upheld and the grounds taken by the Revenue are dismissed.

In the result, the appeal of the Revenue is dismissed.