NARAYAN TRADECOM PRIVATE LIMITED,KOLKATA vs. I.T.O., WARD - 6(1), KOLKATA
What did the Tribunal hold?
The Tribunal held that the assessee had discharged its onus by providing evidence and that the AO's addition was not justified, especially since the transactions were confirmed and the advances were repaid. The invocation of Section 68 was deemed incorrect.
What were the facts?
The assessee received Rs. 22,00,119/- as cash credit from two parties, which were later refunded within three months. The Assessing Officer (AO) made an addition based on a retracted statement of a third party, despite confirmations from the parties involved via Section 133(6) notices.
What were the issues?
Whether the addition of unexplained cash credit under Section 68 is justified when the assessee provides evidence, the parties confirm transactions, and the amounts are repaid, despite a retracted third-party statement.
Which sections of the Income-tax Act were involved?
Section 68,Section 147,Section 144B,Section 133(6),Section 131
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Cases cited in this judgment(2)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- PCIT v. Swati Bajaj443 citing139 Taxmann.com 352 · 2022 · HC · Read judgment
- PCIT v. Ambe Tradecorp Pvt. Ltd.169 citing145 Taxmann.com 27 · 2022 · HC · Read judgment
Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: Shri Rajesh Kumar, AM & Shri Sonjoy Sarma, JM]
ORDER Per Shri Rajesh Kumar, AM
This appeal filed by the assessee is against the order of Ld. CIT(A), NFAC, Delhi dated 02.07.2024 for AY 2016-17 arising out of assessment order passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by Assessing Officer, Assessment Unit, Income Tax Department dated 27.05.2023.
The only issue raised in various grounds of appeal is against the order of Ld. CIT(A) confirming the addition of Rs.22,00,119/- as made by the AO u/s. 68 of the Act in respect of unexplained cash credit.
The facts in brief are that the assessee filed its return of income on 16.10.2016 declaring total income of Rs.3,01,740/-. The AO received information that assessee has received accommodation entry from M/s. Outlook Highrise Ltd. and M/s. Neelgagan Nirman Pvt. Ltd. aggregating to Rs. 22,00,119/-. Accordingly, case of the assessee was reopened and notice was issued on 30.07.2022. The assessee filed the return of income on 29.05.2021 declaring total income at Rs.3,00,800/-. Thereafter, notice u/s. 142(1) along with questionnaire was issued to the assessee which was duly served on the assessee and replies were filed along with details called for by the AO. The AO also issued notice u/s. 133(6) of the Act to two parties which were duly responded confirming the transactions with the assessee. Thereafter, the AO did not issue any notice u/s.131 or carryout any further investigation to dig out the truth. Finally, addition was made by the AO on the basis of statement recorded of Shri Mukesh Banka during the course of search on the entities controlled and managed by him that those were shell companies and engaged in providing accommodation entries. Needless to say that the said statement was withdrawn and retracted subsequently.
In the appellate proceeding, the Ld. CIT(A) dismissed the appeal of the assessee by following the decision of the Hon’ble Calcutta High Court in the case of PCIT Vs. Swati Bajaj [2022] 139 taxmann.com 352 (Cal) and various decisions discussed in the order.
After hearing the rival contentions and perusing the material on record, we find that the assessee has received in aggregate Rs.22 lakh from two parties viz. M/s. Neelgagan Nirman Pvt. Ltd. Rs. 8 lakh and M/s. Outlook Highrise Pvt. Ltd. Rs. 16 lakh. These two amounts were received by the assessee during the year for facilitating trading of L&T shares. We note that these advances were also refunded within a period of three months only within the financial year itself. The assessee has filed all the evidences during the assessment proceedings as well as before the Ld. CIT(A) qua these advances received and refund thereof. We note that in the assessment proceedings the AO has even issued notice u/s. 133(6) to both the parties and they have confirmed to have entered into these transactions with the assessee. Thereafter, the AO did not issue any notice u/s. 131 or carry out any further verification but relied on the statement of Mahesh Banka recorded during the course of search which was retracted later on. Considering the facts of the case, in our opinion, the assessee has discharged its onus by filing of necessary evidences before the AO and the AO also confirmed the transaction by issuing of notice u/s. 133(6) to the parties who confirmed these transactions. Therefore, the mere addition on the basis of statement of
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