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Facts
The assessee filed its return of income, and the AO reopened the assessment based on information that the assessee had taken an accommodation entry for Rs. 7,11,428/- through share transactions. The AO made an addition under Section 69A of the Act. The CIT(A) restored the matter to the AO for fresh examination after the assessee submitted documentary evidence.
Held
The Tribunal held that the CIT(A) correctly observed that the assessee should be given another opportunity to present their case before the AO and that the total income should be determined after a thorough examination of facts and evidence. The appeal was dismissed.
Key Issues
Whether the CIT(A) erred in restoring the matter to the AO for fresh examination instead of allowing the appeal, and whether the AO was justified in treating share transactions as accommodation entries.
Sections Cited
147, 144, 69A
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2016-17 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 31.07.2025 in the matter of assessment framed by the Assessing Officer [AO] u/s. 147 r.w.s 144 of the Income-tax Act,1961 (hereinafter “the Act”) dated 25.03.2022.
When this appeal was taken up for hearing, none appeared on behalf of the assessee and accordingly, the hearing was proceeded with the able assistance of Ld. Departmental Representative (DR), Mr. R.Raghupathy, Addl. CIT.
2. The assessee has filed its return of income on 27.07.2017 declaring total income of Rs. 2,70,000/-. The A.O has reopened the assessment on the basis of information that the assessee has taken accommodation entry to the extent of Rs. 7,11,428/-. By entering into share transactions of PMC Fincrop Ltd. The A.O, accordingly in the order passed u/s. 144 of the Act, made addition of Rs. 7,11,428/- u/s. 69A of the Act on the sale of shares of M/s. PMC Fincrop Ltd. On appeal, the assessee submitted detailed arguments along with documentary evidence in support of the share transactions. The Ld.
CIT(A), after considering the documentary evidence, restored the matter to the file of the A.O. for fresh examination.
The assessee, through its grounds of appeal, has contended that all documentary evidence had already been submitted before the Ld.
1. CIT(A), who ought to have allowed the appeal instead of restoring the matter to the A.O. However, the Ld. CIT(A) had restored the matter back to the file of A.O.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. The assessee has shown LTCG on sale of shares of M/s. PMC Fincrop Ltd. amounting to Rs. 7,11,428/-, whereas the A.O., in the order passed u/s. 144 of the Act, made an addition u/s. 69A of the Act by treating the receipts as accommodation entry. Before the Ld. CIT(A), the assessee had submitted documentary evidence, which led to the matter being restored to the file of the A.O. We are of the view that the Ld. CIT(A) has correctly observed that the assessee should be given another opportunity to present his case before the A.O., and that the total income should be determined only after a thorough examination of the complete facts and evidence. We approve the findings of the Ld. CIT(A). Accordingly, the matter is remitted back to the file of the A.O. for denovo assessment. The assessee is also directed to comply with all the notices issued by the A.O. and furnish all relevant details for fresh consideration.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on 27th day of November, 2025 at Chennai.