NILDHARA LTD.,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-3(1)(1), AHMEDABAD

ITA 271/AHD/2024Status: DisposedITAT Ahmedabad08 January 2025AY 2012-13Bench: SMT. ANNAPURNA GUPTA (Accountant Member), SHRI SIDDHARTHA NAUTIYAL (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition under Section 68 was not sustainable. The Tribunal noted that the AO had not doubted the corresponding purchases against these sales and that the income element embedded in the sales had already been offered to tax. Furthermore, the addition was based on the proprietor's statement without providing the assessee an opportunity for cross-examination.

What were the facts?

The Assessing Officer (AO) reopened the assessment based on information that the assessee obtained accommodation entries from M/s. Shoryaraj Enterprises. The AO treated sales reflected in the assessee's books to this entity as unexplained credits under Section 68 of the Act, totaling Rs. 2,97,45,000/-, on the basis of the proprietor's statement accepting they arranged accommodation entries.

What were the issues?

Whether the addition made under Section 68 of the Act for alleged accommodation entries is valid when the sales have been accounted for and the assessee was not given an opportunity for cross-examination. Whether the reopening of assessment under Section 147 was justified.

Which sections of the Income-tax Act were involved?

Section 147,Section 68,Section 131,Section 143(3),Section 133(1),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Tushar Hemani, Sr. Adv. & Shri
For Respondent: Shri A. P. Singh, CIT DR
Hearing: 09.10.2024Pronounced: 08.01.2025

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 09.01.2024 passed for A.Y. 2012-13. 2. The assessee has raised the following grounds of appeal:

“1. The Ld. AO has erred in law and on facts of the case reopening the assessment u/s. 147 of the Act. Under the facts and circumstances of the case, the action of reopening is without juri iction and in not permissible either in law or on facts. 2

The order continues below.

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