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Facts
The assessee, engaged in trading gold, sold 350 grams of gold to Viko Enterprise for Rs. 11,27,000. The assessee provided supporting documents like invoice, bank statement, and ledger. However, the Assessing Unit treated the transaction as an accommodation entry based on information from the investigation wing.
Held
The Tribunal observed that the assessee had provided sufficient evidence and routed the transaction through banking channels, satisfactorily explaining its genuineness. In the absence of contrary evidence from the Revenue, the addition sustained by the CIT(A) was deemed unjustified.
Key Issues
Whether the transaction of sale of gold to Viko Enterprise was a genuine transaction or an accommodation entry despite supporting documentation and banking channels being used.
Sections Cited
69A, 133(6), 68, 69C
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms. SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), /National Faceless Appeal Centre, Delhi vide order dated 12.06.2025 relevant to the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal:
1. The Assessing Unit has erred on the fact and in Law treating Actual / Real transaction of Sales of Gold Bar as accommodation Bill, Undisclosed income and making addition to total Income u/s 69A of the Income Tax Act, 1961.
The Assessing Unit has erred on the fact and in law not treating Actual / Real transaction of Sale of Gold Bar just for want of confirmation to enquiry u/s 133(6) of the Act from customer Viko Enterprise. Asst. Year : 2017-18 - 2– 3. In spite of providing all the required legitimate evidences of sales transaction with Viko Enterprise and not finding any incriminate documents against the assessees, the transaction is treated as accommodation entry. Just relying on the basis of information received from Director of Income Tax (Investigation) and Director of Intelligence & Criminal Investigation. 4. The decision provided by Ld CIT(A) in this case is based on judicial pronouncements which are totally different in facts of this case. 5. Both the lower authorities have passed the orders without properly appreciating facts of the case and in complete ignorance of submission and explanations, such an act grossly violated principle of natural justice. 6. The assessee craves leave to add/alter any of the grounds of appeal
3. The Assessee is engaged in the business of trading in Gold Bar and Ornaments. The assessee has sold Gold of 350 Gram to Viko Enterprise on 15/11/2016 vide Invoice No 1/4 dated 15/11/2016. The Payment of Rs 11,27,000/- is received in Bank through RTGS. The assessee has provided Bank Statements, Copy of sales Invoice, Ledger of VIKO ENTERPRISE, Stock Statement to the Assessment Unit. However, based on Enquiry by investigation wing, Ahmedabad with VIKO Enterprise, The transaction is treated as accommodation Entry by the assessment wing. No Incriminate document from VIKO enterprise against Soni Girishkumar Vrajlal was found by the Investigation Wing.Thus, in spite of providing all the required legitimate evidences of sales transaction and not finding any incriminate documents against the assessee, the transaction is treated as accommodation entry.
4. Aggrieved against the Assessment Order, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal of the assessee by observing as follows: Asst. Year : 2017-18 - 3– “…6. Decision: I have considered the facts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under: 6.1 Ground No.1: In this ground the appellant has challenged the addition worth Rs./- 11,27.000u/s. 69A of the Income Tax Act. 1961. The information was received from the Investigation wing that the appellant has taken accommodation entry worth RS. 11.27.000/- The appellant replied to the AO that he has sold gold bar to Mis Vico Enterprises The AO issued notice u/s 133(6) of the Income Tax Act, since no reply was filed and hence AO made the addition. 6.1.1 Now before me in the appellate proceedings the appellant has filed written submission. The appellant has stated that the genuine transaction has taken place. It has been further mentioned that the transactions are not bogus. The appellant submitted the bank statement and the ledger of M/s Vico Enterprises. The appellant has hence pleaded that the transactions are genuine. The contention of the appellant cannot be accepted as this is a clear cut case of accommodation entries as per the statements of the persons concerned. Recently Hon. Bombay High Court in the decision of PCIT vs. Mis. Kanak Impex dated 03.03.2025, analysed various decisions of various Courts including decision of Hon. Gujrat High Court in the case of Mis. N. K. Industries vs. CIT and held that estimating a certain percentage on bogus claim is against the principles of Section 68 and 69C of the Income Tax Act, 1961. Reliance was also made on the decision of PCIT vs. Premlata Tekriwal of Calcutta High Court on this issue. Hon. Bombay High Court also relied upon the decision of Hon. Allahabad High Court in the case of ACIT vs. Shanti Jain. Hon. Bombay High Court in the above mentioned decision held that entire bogus entry has to be disallowed and Hon. Court went against percentage addition. Hence, the addition of the AO is confirmed and appeal of the appellant is dismissed…”
5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
The Ld. Counsel for the assessee submitted that the assessee had sold gold weighing 350 grams to M/s. Vico Enterprise, having address at 86, Bhagwandas ni Chali, Khokhara, Mehmedabad, Ahmedabad, vide Bill No. 1/4 dated 15.11.2016. The gold was sold at the rate of Rs. 3,188.12 per gram, amounting to Rs. 11,15,842/-. During that period, service tax was applicable, and therefore, 1% Asst. Year : 2017-18 - 4– service tax amounting to Rs. 11,158/- was charged, aggregating to a total sale consideration of Rs. 11,27,000/-. The assessee furnished all relevant documents substantiating the genuineness of the transaction, including:
Sales Invoice Bank Statement Ledger account of VICO Enterprise. Stock Statement. Copy of bank
We have perused the material available on record and considered the submissions of the Ld. Counsel. It is observed that the assessee has duly established the genuineness of the transaction. The transactions have been routed through banking channels, and the genuineness has been satisfactorily explained. In the absence of any contrary evidence brought on record by the Revenue, we are of the considered opinion that the addition sustained by the Ld. CIT(A) is not justified.
In the result, the appeal of the assessee is allowed.