AKSHAY JALAN,KOLKATA vs. DCIT, CIRCLE-32, KOLKATA, KOLKATA

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ITA 1914/KOL/2016Status: DisposedITAT Kolkata09 April 2018AY 2008-093 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the assessee had provided a ledger account, a retail invoice for diamonds, and a cheque payment. The CIT-A had failed to consider these documents properly. Therefore, the addition was not justified.

What were the facts?

The assessee's appeal concerned an addition of Rs. 3,28,190/- on account of accommodation entries. The assessee argued that this was for investment in diamonds and not an expenditure claimed. The Revenue contended that no explanation or evidence was provided.

What were the issues?

Whether the addition on account of accommodation entries is justified when the assessee has provided documentary evidence of purchase of goods and payment through cheque.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Before: Shri J. Sudhakar Reddy & Shri S.S. Viswanethra Ravi

ORDER Shri S.S.Viswanethra Ravi, JM:

This appeal by the Assessee is directed against the order of the Commissioner of Income Tax (Appeals), Kolkata dt. 31-08-2016 for the A.Y 2008-09.

2.

The ld.AR submits that the assessee intends not to press ground nos. 1 & 2 raised in the appeal and urged to dismiss the same. Accordingly, ground nos. 1 & 2 are dismissed as not pressed.

3.

Ground no. 3 is relating to confirmation of addition of Rs.3,28,190/- on account of accommodation entries.

4.

The ld.AR submits that the assessee made investments, but no expenditure was claimed and as such disallowance made on this issue is not maintainable and urged to allow ground no. 3 raised by the assessee in the appeal.

5.

On the other hand, the ld.DR submits that neither any explanation nor any supporting evidence in respect of accommodation entries were filed before the AO and the CIT-A. The CIT-A has rightly confirmed the said addition made by the AO.

6.

Heard both the parties and perused the material on record. We find that the assessee filed ledger account, placed at page-12 of paper book, which shows that the assessee issued a cheque bearing no. 171849 against bill no. 134 towards payment of 25.27 carats diamonds in favour of Mihir Diamonds. We also find a retail invoice dt. 6-2-2008 placed at page 13 of paper book, involving bill no. 134 raised by Mihir Diamonds in favour of assessee for 25.27 carats for an amount of Rs. 3,28,190/-. Both the documents at pages-12 & 13 of paper book, which clearly shows that the impugned amount was paid in respect of purchase of diamonds by the assessee and the said amount paid through cheque dt. 28-03-08 of Citi Bank drawn at page: 14 of the paper book in favour of M/s. Mihir Diamonds. The CIT-A having the supporting bill, cheque and entry made in the books of account before him did not consider the same in right perspective and dismissed ground of appeal for not proving the same before the AO, which is not permissible. In view of above, the order of the CIT-A in confirming the same is not justified and it is set aside. Therefore, ground no. 3 raised by the assessee is allowed.

7.

In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 9-04-2018

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