INCOME TAX OFFICER, WARD-6(1)(1), AHMEDABAD, AHMEDABAD vs. NIMIT AGARWAL, AHMEDABAD

O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the Revenue as against the appellate order dated 28.05.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre(NFAC), Delhi, arising out of the reassessment order passed under section 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] relating to the Asst. Year 2013-14. ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 2– 2. Brief facts of the case are that assessee is an individual and proprietor of Nimit Fabrication. The assessee filed his return of income for the Assessment Year 2013-14 dated 30.01.2014 declaring total income of Rs.2,12,000/-. Assessment was reopened on the grounds that information received from the Investigation Wing, based on the search action u/s.132 of the Act, undertaken on 12.04.2019 in the case of Sanjay Govindram Agrawal (also known as Sanjay Tibrewal) that various entities not carrying out any genuine business activity but run, controlled and managed by him are engaged in providing accommodation entries to various beneficiaries. Thus, accommodation entries amounting to Rs.3,62,60,000/- were made to the assessee. Hence, the assessment was re-opened by issuing notice u/s.148 of the Act on 24.11.2021. During the re-assessment proceedings, various notices were issued to the assessee which were duly complied by the assessee. The assessee submitted that there is no loan or deposits either in the name of Sanjay Tibrewal or his concerned aggregating to Rs. 3,62,60,000/-. In the absence of any details of the above amount, the assessee was unable to furnish necessary explanation on the same. However, the assessee admitted that he was in short term Sharafi transactions with M/s. Radhe Corporation and the closing balance was Rs.9,50,000/- only. The Assessing Officer was not satisfied with the above explanation offered by the assessee, thereby, made an addition of Rs.3,62,60,000/- ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 3– u/s.69A of the Act and charged the tax u/s.115BBE of the Act and demanded tax thereon.

1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.3,62,60,000/-made u/s 69A of the Act on account of unexplained credits being in the nature of accommodation entries in the order passed u/s 147 r.w.s.1448 of the Act, without appreciating the facts of the case."

2. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored.

6. Per Contra, the Ld. AR appearing for the assessee submitted that it is undisputed fact that the assessee has never received any loans from Shri Sanjay Tibrewal by way of accommodation entries. The Ld.CIT(A) on detailed perusal of the bank account found the credit entries in the account stand at Rs.1,02,75,351/- and debit entries at Rs.96,84,950/. The total amount of both the sides is taken cumulatively is still below Rs.3,62,60,000/- as alleged by the Assessing Officer. Thus, he deleted the addition, however, the Ld.CIT(A) made addition on account of Sharafi transactions made with M/s. Radhe Corporation by applying peak credit of ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 5– Rs.15,40,000/- as unexplained income of the assessee. Thus, the findings arrived by the Ld.CIT(A) does not require any interference.

7. We have given our thoughtful consideration and perused the materials available on record. The Ld.CIT(A), after perusal of the bank statements, made a clear observation that there is no loan transaction of Rs.3,62,60,000/- by way of accommodation entries from Shri Sanjay Tibrewal. Thus, the very basis of reopening of Assessment itself is invalid in Law. Further, the Revenue could not place on record the alleged accommodation entries availed by the assessee from Shri Sanjay Tibrewal with necessary evidences. Thus, we do not find any infirmity in the order passed by the Ld.CIT(A) by deleting the addition made u/s.69A of the Act. Thus, the grounds raised by the Revenue are devoid of any merit and is hereby dismissed.