M/S. CENTRAL GUM & CHEMICALS LIMITED,NEW DELHI vs. DCIT, NEW DELHI

ITA 1668/DEL/2014Status: DisposedITAT Delhi29 July 2016AY 2008-0916 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that additions under Section 68 cannot be made in the hands of conduit companies when the Settlement Commission and Additional CIT have directed that such transactions should be taxed in the hands of beneficiaries. The order of the Settlement Commission was considered binding.

What were the facts?

The assessee company was identified as a conduit for accommodation entries by S.K. Gupta, who admitted to using various entities for this purpose. The Assessing Officer made an addition under Section 68 for alleged unexplained credit entries.

What were the issues?

Whether additions under Section 68 are sustainable in the hands of conduit companies when the revenue has acknowledged the transactions as accommodation entries and directed taxation in the hands of beneficiaries. The binding nature of Settlement Commission orders and directions under Section 144A.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 144A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: SH. SUDHANSHU SRIVASTAVA & SH. O.P. KANT

Hearing: 26.07.2016Pronounced: 29.07.2016

PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 06/11/2013 of the learned Commissioner of Income-tax (Appeals)-XXXIII, New Delhi for assessment year 2008-09 raising following grounds: “That the Ld. CIT (A) erred in confirming the assessment order passed u/s 143 (3) of the Act on 27.12.2010 which is bad both on facts and in law; 2) That the authorities below erred both on facts and in law in making an addition of Rs.24,17,66,963/- u/s 68 of the Income-tax Act, 1961 without appreciating the fact

2 AY: 2008-09 that the provision is applicable only in the case of credit entry in the books of accounts, whereas in the instant case, the amounts in question were all rec

The order continues below.

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