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Facts
The Assessing Officer initiated reassessment proceedings u/s 147 based on information regarding routing of funds through shell/jamakharchi entities. The assessee had declared a small income in the original return, but the assessment was reopened, and a significant sum was added as unexplained cash credit for AY 2013-14.
Held
The Tribunal noted that the CIT(A) had selectively accepted certain transactions while rejecting others without a consistent principle. Observing a potential violation of natural justice and an inconsistent approach, the Tribunal decided to remit the case back to the CIT(A) for a fresh decision.
Key Issues
Whether the CIT(A) erred by selectively considering transactions and applying inconsistent principles, leading to an arbitrary addition? Whether the case requires to be remanded for a fresh adjudication to ensure natural justice and a holistic consideration of evidence?
Sections Cited
250, 147, 144, 148, 68, 115BBE
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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
order
: May 7th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2013-14 dated 25.09.2024, which has been passed against the assessment order u/s 147 r.w.s. 144 of the Act, dated 25.09.2021.
Sl no Particulars Evidence produced Whether accepted. 1 Bank statement Copy of bank account with Bank statement shows receipt of money showing receipt KVB, Salt Lake branch, during FY 2012-13. But immediately after of money. Kolkota (account no credit of the amount, the amount is 310628), BOB withdrawn leaving a negative cash balance. (0902020000887). A copy of the bank statement of account with KVB is attached herewith. The debits are in the name of companies whose shares are purchased. 2 Explanation for Copy of share bills, sale There is credit entry of Rs 20 lakhs and 25 source of credit bills of entities. lakhs as well as 18 lakhs in the name of in the bank Jalnayan Vinimay Pvt Ltd. Jalnayan has account. been sold 12600 unquoted equity shares for a total consideration of 63 lakhs. Though the assessee has not been able to show a direct link between the sale of shares and receipt of money, still credit is given towards Rs 63 lakhs as money is credited during the year. Similarly in the case of Overtop Vanijya the total sale consideration receivable is Rs 11400000. Out of that bank account shows a credit of Rs 28 lakhs which is given credit. In the case of After Link a credit of Rs 57 lakhs is found out of the total receivable of Rs 1.32 cr. Even though a one to one correlation between sale of shares and credit in the bank account is not proved by the taxpayer, considering the bank statement credit for Rs 1.48 cr is given.
The request for cross examination of the accommodation entry provider was not considered necessary by the Ld. CIT(A). The Ld. CIT(A) has also considered the judicial pronouncements in the cases mentioned below: i) CIT v. P. Mohanakala 291 ITR 278 (SC) ii) Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1 (SC) iii) Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) iv) CIT Vs Durga Prasad More (1971) 82 ITR 540 (SC)
We have considered the submissions made. Considering the totality of facts and the submissions made and in the interest of justice and fair play, we are of the view that the order of the Ld. CIT(A) may be remitted back to him for deciding afresh all the issues including the issues raised before us and after providing an opportunity of being heard to the assessee as it is alleged by the assessee that the Ld. CIT(A) has accepted partial credits for certain transactions but has failed to apply consistent principle on similar other transactions and the selective approach is unsustainable and fails to appreciate the appellant’s compliance and transparent disclosure throughout the proceedings. The Ld. AO shall also be given an opportunity of being heard and a remand report may be called for, if required, as some of the companies are said to be struck off companies as per the RoC’s