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Facts
The assessee filed an ITR for AY 2018-19, and subsequently, information flagged on the Insight Portal indicated the assessee was a beneficiary of accommodation entries from certain paper entities, aggregating to Rs.37,40,206/-, based on a search action against Shri Sanjay Govindram Agrawal. The Assessing Officer treated this amount as unexplained cash credits under Section 68 of the Act, which was confirmed by the CIT(A) because the assessee failed to establish the identity, creditworthiness, and genuineness of the transactions, and the alleged lender denied any transactions.
Held
The Tribunal noted that additional evidences presented by the assessee were crucial but had not been filed before or examined by the CIT(A). In the interest of natural justice, the Tribunal set aside the order of the CIT(A) and restored the matter to the CIT(A) for fresh examination, directing them to duly consider and verify the additional evidences after providing a reasonable opportunity of being heard to the assessee. The same directions were applied to AY 2019-20.
Key Issues
Whether the addition made under Section 68 for unexplained cash credits from alleged accommodation entries was justified, particularly when crucial additional evidences were not considered by the lower authorities.
Sections Cited
147, 144B, 250, 132, 148A(b), 148, 68, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI SIDDHARTHA NAUTIYAL
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
Delay Condoned.
1. These two appeals have been filed by the assessee against separate orders of the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short), both dated 16.10.2024, passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Years (AY) 2018- 19 & 2019-20.
Since the issues involved in both the appeals are identical and arise from similar facts, both the appeals were heard together and are disposed of by this consolidated order for the sake of convenience.
The assessee has raised following grounds of appeal:-
& 59/Ahd/2025 Saket Sushil Tibrewal Vs. ITO Asst. Year : 2018-19 & 2019-20 - 2–
The assessment order passed u/s. 147 r.w.s. 144B of Income Tax Act by the Assessing Officer and confirmed by the first appellate authority u/s. 250 is bad in law and deserved to be uncalled for.
2. The assessing officer as well as first appellate authority has erred in law ad on facts I making and confirming respectively the addition of Rs.38,33,711/- for AY 2018-19 and Rs. 71,60,000/- for AY 2019-20. The same deserves to be deleted.”.
For the sake of convenience, for A.Y. 2018-19 is taken as the lead case and the facts therefrom are narrated herein.
The brief facts of the case are that the assessee, an individual, filed his return of income for A.Y. 2018-19 declaring total income of Rs.5,33,160/-. Subsequently, information was flagged on the Insight Portal categorised as “High Risk CRIU/VRU case” for F.Y. 2017-18. 5.1 The information emanated from a search action conducted under section 132 of the Act on 12.04.2019 in the case of Shri Sanjay Govindram Agrawal, also known as Sanjay Tibrewal. Based on statements recorded during the search proceedings, the Investigation Wing concluded that the Shri Sanjay Govindram Agrawal was engaged in providing accommodation entries through several paper entities. As per the information, the assessee, through his proprietorship concern Sneh Impex, was alleged to be a beneficiary of accommodation entries aggregating to Rs.37,40,206/- during F.Y. 2017-18 from the following entities:
SN Name of the party Total deposits Total with- Total transaction (Rs.) drawals (Rs.) Amount (Rs.) 1 AUSTVINAYAK TEXTILES 3,00,000 3,00,000 6,00,000 0447030100000090 2 GANPATI TEXTILE 28,90,206 2,50,000 31,40,206 7495002100000510 TOTAL 31,90,206 5,50,000 37,40,206 & 59/Ahd/2025 Saket Sushil Tibrewal Vs. ITO Asst. Year : 2018-19 & 2019-20 - 3– 5.2 Notice u/s 148A(b) dated 14.03.2022 was issued to the assessee. In the absence of any response, notice under section 148 was issued on 07.04.2022. During reassessment proceedings, the assessee submitted partial details stating that the transactions represented short-term loans and advances routed through banking channels. However, according to the Assessing Officer, the assessee failed to furnish complete bank statements, confirmations, PAN details, or evidence establishing identity, creditworthiness, and genuineness of the transactions. Relying primarily on the investigation findings and statements recorded during the search in the case of Sanjay Govindram Agralwal, the Assessing Officer treated the entire amount of Rs.37,40,206/- as unexplained cash credits u/s 68 of the Act and made the addition accordingly.
Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who confirmed the impugned addition by observing that:- a. The assessee failed to establish identity, creditworthiness, and genuineness of the alleged lenders. b. Notices issued u/s 133(6) to Shri Sanjay Govindram Agrawal were replied to by denying any transaction with the assessee. c. Merely routing transactions through banking channels does not establish genuineness. d. The Sanjay Govindram Agrawal was admittedly engaged in providing accommodation entries.
Before us, the Ld. AR has furnished additional evidences, such as… a) Complete bank statements of the assessee b) Ledger accounts of Ganpati Textile, Radhika & Brothers, and Vinayak Textiles c) Supporting case laws & 59/Ahd/2025 Saket Sushil Tibrewal Vs. ITO Asst. Year : 2018-19 & 2019-20 - 4– It was submitted that these evidences go to the root of the matter and are crucial for proper adjudication of the issues involved.
We have heard the rival contentions and perused the material available on record. We observe that the additional evidences now placed before the Tribunal were neither filed before the Ld. CIT(A) nor it was examined by the Ld. CIT(A). These evidences are crucial for adjudicating the issues relating to the nature of transactions, net credit position, and applicability of Section 68 of the Act. Therefore, in the interest of justice and following the principles of natural justice, we are of the considered opinion that the matter requires fresh examination at the level of the Ld. CIT(A) after duly considering and verifying the additional evidences furnished by the assessee. Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the matter to his file with a direction to adjudicate the issue afresh in accordance with law, after granting reasonable opportunity of being heard to the assessee.
A.Y. 2019-20
Since the facts and issues involved in A.Y. 2019-20 are identical, the above directions shall apply mutatis mutandis to that year as well.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
The order is pronounced in the open Court on 03.02.2026 (SIDDHARTHA NAUTIYAL) VICE-PRESIDENT Ahmedabad; Dated 03.02.2026 *btk & 59/Ahd/2025 Saket Sushil Tibrewal Vs. ITO Asst. Year : 2018-19 & 2019-20 - 5–