ACIT, CENTRAL CIRCLE - 2(1), AHMEDABAD, AHMEDABAD vs. VRINDAVAN FURNISHING PRIVATE LIMITED., AHMEDABAD
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHAAssessment Year: 2018-19
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of the Commissioner of Income tax (Appeals)-12, Ahmedabad (in short “the CIT(A)”) dated 05.12.2024 for the Assessment Year (A.Y.) 2018-19 in the proceeding under Section 143(3)/147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2018-19 on 09.10.2018 declaring loss of Rs.8,73,042/-. The case of the assessee was reopened under Section 147 of the Act on the basis of search conducted in the case of Sanjay admitted that he was providing accommodation entries. The information of transactions of various entities with Sh. Sanjay Tibrewal was uploaded on Insight Portal of the Department, from which the Assessing Officer had noticed that the assessee had made transactions totalling Rs.40,01,107/- with entities of the said Sh. Sanjay Tibrewal. Accordingly, the case of the assessee was reopened by issue of notice under Section 148 of the Act on 19.04.2022. In the course of assessment, the Assessing Officer was not satisfied with the explanation of the assessee regarding the transaction of Rs.40,01,107/- made by the assessee with the entities of Sh. Sanjay Tibrewal. Accordingly, the Assessing Officer had treated the sum of Rs.40,01,107/- as unexplained cash credit and made the addition. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was partly allowed. 4. Now the Revenue is in appeal before us. The following grounds have been taken in this appeal: “1) Whether on the facts and on the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition of Rs.40,01,107/- to Rs.2,00,055/- being unexplained cash credit u/s.68 of Income Tax Act without considering the fact of the case that the assessee had failed to furnish any independent evidence to corroborate his contentions with regards to the transactions made by the assessee with M/s. Ganpati Textiles and M/s. Hanuman Fabrics and payment had been received against the sales made to these parties.
2)
Whether on the facts and on the circumstances of the case and in law, the Ld. CIT(A) has not appreciated that, the transactions related to sales mentioned in the ledgers were not exactly reflected in the bank statements of the assessee and therefore these ledger account were not found genuine and thus it was also noticed that the sales were made to other entities and payment was received from some other entities namely M/s. Ganpati Textiles and M/s. Hanuman Fabrics.
Whether on the facts and on the circumstances of the case and in law, the Ld. CIT(A) has not appreciated that Shri Sanjay Govindram Agarwal was actively involved in providing accommodation entries to various persons through shell entities and M/s. Ganpati Textiles and M/s.
Hanuman Fabrics were such shell entities which were used by Sanjay
Tibrewal to give accommodation entry to the assessee.
4)
Whether on the facts and on the circumstances of the case and in law, the Ld. CIT(A) has not appreciated that notice of Summon u/s.131 of the IT Act, were issued to Ms. Vrindavan Furnis Pvt. Ltd., Jigna Samirbhai
Shah (Prop. Ganpati Textiles) and Alpaben Anil Kumar Shah (Prop
Hanuman Fabrics) for cross examination. However, neither of the parties availed the opportunity for cross examination and did not provide proper documentation or any credible explanation for these transactions, combined with the suspicious nature of the ledger bills and invoices which strongly suggests that the transactions were only accommodation entry and not sales/purchase transactions in the regular course of business."
5)
The Revenue-craves leave to add/atter/armed and/or substitute any or all of the grounds of appeal"
Shri Rajiv Garg, Ld. Sr. DR submitted that the assessee did not dispute the transaction of Rs.40,01,107/- made with entities of Sh. Sanjay Tibrewal, an accommodation entry provider. The contention of the assessee that this amount represented sale proceeds made to third parties was duly examined in the course of assessment but was not found acceptable. It transpired that the payment of Rs.40,01,107/- was received from M/s. Ganpati Textiles and M/s. Hanuman Fabrics controlled by Sh. 7. We have considered the rival submissions. The fact that the assessee had received an amount of Rs.40,01,107/- from M/s. Ganpati Textiles and M/s. Hanuman Fabrics (entities controlled by Sh. Sanjay Tibrewal) has not been disputed. The contention of the assessee is that the payment of Rs.40,01,107/- was received on account of sales made to third parties, the details of which were brought on record before the Assessing Officer. The Assessing Officer did not controvert this fact by making any enquiry with the parties to whom the sales were made by the assessee. The Assessing Officer had pointed out certain discrepancies in the ledger account and the bank statement. It is found that the Ld. CIT(A) has considered this aspect and held that the difference between the ledger account and bank statement was duly explained by the fact that the cheques deposited were cleared on a later date. The fact that the assessee had made sales to different parties pertaining to which the sum of Rs.40,01,107/- was received, was not controverted by the AO by making enquiries with the parties to whom the sales were made or with ACIT vs. Vrindavan Furnishing Pvt. Ltd. Page 5 of 9
the entities from whom the payments were received. It is found that the Ld. CIT(A) had examined all the aspects and given the following finding in this regard: -
40,01,107/- received from the entities of Sanjay Tibrewal, so as to treat it as accommodation entry. No cash trail in respect of the alleged accommodation entries was brought on record. It is thus found that the addition on account of accommodation entry was based on mere presumption and without any evidence to establish the same. On the other hand, the assessee had duly explained the transactions being in the nature of sale proceeds and the supporting evidence in this regard was also brought on record. The Ld. CIT(A) as a precautionary measure, in order to plug leakage of revenue, had estimated profit at a higher rate of 5% on the sale transaction of Rs.40,01,107/-, the payment for which was received from M/s. Ganpati Textiles and M/s. Hanuman Fabrics. So far as addition of unexplained cash credit is concerned, we do not find any ACIT vs. Vrindavan Furnishing Pvt. Ltd.
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reason to differ from the findings and the decision of the Ld. CIT(A). The order of the Ld. CIT(A) is, therefore, upheld and the grounds taken by the Revenue are dismissed.
9. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on this 18th December, 2025. (SANJAY GARG)
Accountant Member
Ahmedabad, the 18th December, 2025
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