Loading judgment…
Facts
The Revenue appealed against the CIT(A)'s order which allowed the assessee's appeal. The AO had made an addition of Rs. 20,00,112/- under section 68, alleging the assessee received funds from shell companies of the Banka Group. The assessee denied any transaction with Banka Group and stated no such credit appeared in their bank account or balance sheet.
Held
The Tribunal held that the Assessing Officer failed to provide complete details of the shell company and the transaction date. In the absence of primary evidence to prove the genuineness of the transaction, the addition made by the Assessing Officer was without proper appreciation of facts.
Key Issues
Whether the addition made by the Assessing Officer under section 68 for unexplained cash credit is justified without providing complete details of the transaction and in the absence of evidence proving the genuineness of the transaction.
Sections Cited
148, 143(2), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
order : May 29, 2025 O R D E R The present appeal is directed at the instance of Revenue against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 27th May, 2024 passed for Assessment Year 2013-14.
The appellant is a Private Limited Company, which filed its return of income for assessment year 2013-14on 02.10.2013 1 (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited declaring total loss of Rs.64,512/-. Information was received from Investigation Wing that the assessee is one of the beneficiaries, who has availed benefit from shell companies floated of Banka Group. Accordingly notice under section 148 of the Act was issued on 31.03.2021. The assessee filed return of income in response to notice under section 148 on 30.04.2021 declaring loss of Rs.64,512/-. Thereafter the ld. Assessing Officer issued notice under section 143(2) of the Act to the assessee and the same was served on the assessee. In response to the notice issued under section 143(2), the assessee had filed objections but the ld. Assessing Officer did not consider the objections raised by the assessee saying that the objections are not maintainable and concluded the assessment by making an addition of Rs.20,00,112/- under section 68 of the Act. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
After considering the submissions made by the assessee, the ld. CIT(Appeals) allowed the appeal of the assessee by following the decision dated 10.01.2024 of the ITAT, Ahmedabad Bench in the case of Aashna Developers Pvt. Limited in ITA No. 417/AHD/2022.
On being aggrieved, the Revenue preferred an appeal before the ITAT and raised the following grounds:- (1) That the CIT(A) erred in taking decision in favour of the assessee without any verification on the issue. (2) The CIT(A) has erred in ignoring the settle position of law in respect of provision of sec. 68 of the Act that onus of proving the identity and creditworthiness of the parties from whom the assessee received money and genuineness of such transaction is on the assessee.
(A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited (3) That the appellant craves leave to add any new ground or alter any of the grounds of appeal and to place arguments during the course of hearing of the appellate proceeding. (4) Whether on the facts and circumstances of the case, the Hon’ble High Court has committed substantial error in law in not following the judicial principles laid down in the matter of Pr. CIT(Cen.)-2, Kolkata -vs.- M/s/. BST Infratech Ltd. in ITAT/67/2024 dated 23.04.2024, which is an earlier decision of Hon’ble High Court having precedence value.
5. I have heard both the sides. It was the submission of the ld. Departmental Representative that the ld. Assessing Officer received credible information from the Investigation Wing that the assessee is one of the beneficiaries, who has availed benefit from the shell companies floated of Banka Group. He further argued that the ld. Assessing Officer has gone through the balance-sheet of the assessee-company, which clearly shows that the asseessee is in receipt of Rs.20,00,112/- in the form of loan from the abovementioned shell companies of Banka Group. The assessee was asked to explain the nature of these transactions. The assessee has replied that the assessee-company has not dealt with Banka Group. After examining all the facts, the ld. Assessing Officer came to a conclusion that the transaction is merely an accommodation entry and the assessee has not undertaken any business activity with Banka Group, but ld. CIT(Appeals) without considering the facts properly allowed the appeal of the assessee. Therefore, ld. D.R. pleaded to set aside the order passed by the ld. CIT(Appeals) and uphold the order of ld. Assessing Officer.
(A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited 6. On the other hand, it was the submission of the ld. Counsel for the assessee that the assessee-company requested the details of loan transaction, date of loan transaction for an amount of Rs.20,00,112/- and when it was deposited in Bank account of the assessee-company, received the said amount etc., but ld. Assessing Officer has not furnished the above said details. It was the further submission of the ld. Counsel for the assessee that the assessee denied the transaction with Banka Group and also intimated the ld. Assessing Officer very clearly about the non- involvement of any transaction with Banka Group, which clearly shows that the ld. Assessing Officer failed to furnish the date of transaction and Bank details regarding loan amount received by the assessee-company from the Banka Group. He further submitted that there is no entry in the balance-sheet of the assessee-company that the assessee had received loan amount of Rs.20,00,112/- from Banka Group. Inspite of this, the ld. Assessing Officer erroneously made an addition of Rs.20,00,112/- in the hands of assessee-company under section 68 of the Act. He further submitted that the assessee has established all the details before the ld. CIT(Appeals), the ld. CIT(Appeals) after examining all details filed by the assessee, allowed the appeal of the assessee saying that there was no transaction between the assessee- company and Banka Group. Therefore, ld. Counsel for the assessee pleaded to uphold the order passed by the ld. CIT(Appeals).
I have perused the material available on record and the orders passed by the lower authorities. It is an admitted fact that (A.Y. 2013-2014) Venkatesh International Exim Pvt. Limited after receipt of notice under section 148 of the Act, the assessee requested the ld. Assessing Officer to furnish the date of alleged transaction and also informed the ld. Assessing Officer that he has not received any loan amount of Rs.20,00,112/- from M/s. Banka Group. The assessee also furnished the Bank statement before the ld. Assessing Officer as well as before the ld. CIT(Appeals). But admittedly there is no credit in the Bank account of the assessee, especially for an amount of Rs.20,00,112/- as alleged by the ld. Assessing Officer. After considering the above said facts, the ld. CIT(Appeals) allowed the appeal of the assessee saying that- “in the case of the appellant, the Assessing Officer has not provided complete details of the name of the shell company with whom the transaction was undertaken by the appellant and the date of transaction. In the absence of primary details to prove the genuineness of the transaction, the addition made by the Assessing Officer is without proper appreciation of facts and the Assessing Officer is directed to delete the addition of Rs.20,00,000/- towards unexplained cash credit under section 68 of the Act”.
After considering the facts and circumstances of the case and the findings of ld. CIT(Appeals), I am of the firm view that the order of the ld. Assessing Officer is lacking in so many aspects i.e. ld. Assessing Officer failed to furnish the details of lender company, date of transaction and credits in the Bank account from the non- existent companies in the books of the assessee and mainly the