DCIT, JHANDEWALAN EXTENTION vs. JAY ENN INFOTECH PVT. LTD., DELHI

PER AMITABH SHUKLA, AM:

This appeal by Revenue is directed against the order of Commissioner of Income Tax (Appeals)-29, New Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 30.06.2023 for Assessment Year 2012-13. 2. The only issue contested by the Revenue through its grounds of appeal is regarding the action of Ld. CIT(A) deleting protective and substantive addition made in the hands of the assesse company on ITA No.-2541/Del/2023

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account of commission earned by providing accommodation entries.
At the outset, Ld. DR invited our attention to the order of this Tribunal in ITA No.196/Del/2022, wherein, on identical facts the Hon’ble Co-ordinate Bench had set aside the order of the Ld. CIT(A), directing him to re-adjudicate the appeal de novo. The Ld. Counsel for the assesse vehemently argued in favour of the correctness of the decision of Ld. CIT(A).
3. We have heard rival submission, in the light of material available on record. We have noted the order of this Tribunal in ITA
No.196/Del/2022, wherein Hon’ble Co-ordinate Bench has observed as under:
“… 11. We have heard carefully the rival submissions in the group of bunch of appeals. As it emerges from the record the additions have been made under s. 68 by the AO in the assessment order passed under s. 153C on protective basis on the premise that the respondent-companies herein above are conduit companies and merely a entry providers. The Ld. CIT(A) has granted relief to the assessee on the premise that the additions under s. 68 in the hands of the respondent company are not sustainable on the ground that in the absence of ownership of the entries giving rise to the additions, the additions cannot be countenanced. Likewise commission income held to be chargeable in the hands of the assessee company by the AO is also not sustainable since the commission income hasalready been assessed in the hands of Shri
Anand Kumar Jain & Shri Naresh Kumar Jain who are stated to be controlling the respondent companies.
12. On perusal of first appellate order and the assessment order, it clearly emerges that additions in question arises from entries which have landed up in the bank account in the respective respondent assessee. This being so, the onus is always on the assessee to discharge the burden placed under s. 68 of the Act.

ITA No.-2541/Del/2023

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While returning the finding by the Ld. CIT(A) that the ownership of the entries do not belong to the assessee, it was incumbent upon the Ld. CIT(A) to satisfy himself that the ultimate so-called beneficiaries have been assessed on substantive basis and the tax has been realized on such bogus entries. The Ld. CIT(A) has dealt with the issue without consideration of this vital fact. The onus lays on the assessee companies to establish that entries routed through the bank account of such companies are not owned by them. The corporate veil cannot be lifted cursorily. The onus has not been discharged by the assessee at all. In the absence of any finding on the taxability of entries in the hands of beneficiaries, we are not in a position to either sustain the action of the Ld.CIT(A) or dislodge the action of the Ld. CIT(A). It will thus equitable to restore the appeal to the file of the Ld. CIT(A) for adjudication afresh in accordance with law. It shall be open to the assessee to place arguments and adduce evidences as may be considered expedient to defend the stand of the assessee on the subject matter of dispute…”

ITA No.-2541/Del/2023

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Dated: 05/03/2025. Pooja/-