AMIT ANAND,DELHI vs. ITO WARD-36(1), DELHI

Brief facts of the case are that the assessee is an individual and filed his return of income by declaring income of Rs. 2,04,090/- for AY 2016-17. As per the information available with the department, the case of the assessee was selected for verification under the category High Risk CRIU/VRU Transactions. As per the information available with the department, the assessee had Taken accommodation/ fictitious entry of Rs. 50,50,221/- an entity controlled / managed by Sh. Ashok Dalal. An investigation had been conducted by Shri Ashok Kumar Jain, DDIT (Inv.)I & II, Gwalior and the statement of Shri Vinjay Kumar Jain was recorded wherein he had admitted that he had not done any business transaction from the bank account maintained with Central Bank of India and the account operated was actually operated by Shri Ashok Kumar Dalal (Ashok Kumar Gupta) for routing unaccounted transaction of other parties. He had also admitted that he took Rs. 5000/- against the utilization of his bank account. During the assessment proceeding, the assessee had submitted that the total amount of Rs. 50,50,221/- was received during the FY 2015-16 from M/s Jain Enterprises for the sale of food grains, through the commission agent in Delhi i.e. Mr. Om Prakash and had also stated that in the anaj mandi mostly sale purchase are through dalas/ commission agent and they were wholly responsible for the transactions and earned commission from both the parties. However, as the assessee failed to submit any documentary evidence to substantiate his claim and also failed to explain the nature / source of credits appearing in his bank account, the AO added the amount of Rs. 50,90,000/- which was received from Sh. Vijay Kumar Jain on account of unexplained money u/s. 69A of the Act. In appeal, Ld. CIT(A) noted that the entity operated by entry operator are shell entity and a façade to provide accommodation entry. Shri Vijay Kumar Jain had admitted that he had not done any business transaction with assessee and the account operated was actually operated by Sh. Ashok Dalal (Ashok Kumar Gupta) for routing unaccounted transaction of appellant. Thus the entry was not genuine has been established, thus the addition was sustained.

We have heard the rival contentions and perused the records. We note that assessee had received total amount of Rs. 50,50,221/- during the FY 2015-16 from M/s Jain Enterprises for the sale of food grains, through the commission agent in Delhi i.e. Mr. Om Prakash. In our view, the addition of recorded sales of Rs. 50,90,000/- as unexplained credit u/s. 69A of the Act was made on higher side of return income, going by the nature of business of the assessee of sale of food grains, without rejecting the books of account under section 145 of the Act, despite the fact 2 | P a g e that the sale entry was duly recorded in the books of accounts which has been duly audited under section 44AB of the Act. It is further noted that AO accepted the purchase of goods made by the assessee but sales have not been accepted. It is further noted that the sales transaction was done through banking channel. We find that neither the assessee has been able to properly explain the purchase nor the department could simply brush aside all the relevant evidences at one go. Be that as it may, the tribunal is of the considered view that in these peculiar facts, it is deemed appropriate in the larger interest of justice to restrict the disallowance to @10% of purchases as against the entire purchases disallowed as bogus purchases by the Assessing Officer. Necessary computation shall follow as per law.

The instant assesseee’s appeal is party allowed in the aforesaid terms. Order pronounced in the Open Court on 06.02.2026.