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Facts
The assessee filed appeals against orders for assessment years 2018-19 and 2019-20. The Assessing Officer (AO) added Rs. 44,50,000/- as commission income, alleging the assessee acted as a conduit for circulating funds without substantive documentary evidence. The CIT(A) upheld the AO's order.
Held
The Tribunal noted that the CIT(A) had passed a non-speaking order and that the AO's order was based on suspicion without concrete evidence. The Tribunal remitted the issues back to the AO for fresh adjudication.
Key Issues
Whether the addition of commission income was justified without substantive documentary evidence, and whether the assessment proceedings were conducted in accordance with the prescribed faceless regime and principles of natural justice.
Sections Cited
148A, 148, 144B, 148B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE
ORDER These appeals have been filed by the Assessee against the respective orders passed by the NFAC, Delhi for the assessment years 2018-19 & 2019-20. Since identical grounds have been raised, except the difference in figures of addition, hence, both the appeals were heard together and disposed off by this common order for the sake of convenience, by dealing with the facts of the assessment year 2018-19, being lead case wherein, the following grounds have been raised:- 1) The Ld CIT(A) has erred in sustaining the order of the Ld AO as Ld AO has erred in law and on facts of the case in making addition of Rs 44,50,000/-being commission @ 1% of Rs 44,50,00,000/- as the amount received and then repaid to group entities and is just based on suspicion, without providing any evidence to the assesse due to which the Assessment Order is bad in law, void-ab-initio and is liable to set aside in full. 2) The Ld CIT(A) has erred in sustaining the order of the Ld AO as Ld AO has erred in law and on facts of the case making addition of Rs 44,50,000/- just based on suspicion and wholly on the whims and wishes of the Ld AO, without placing any concrete evidence on record. 3) The Ld CIT(A) has erred in sustaining the order of the Ld AO as Ld AO has erred in law and on facts of the case in making addition without considering the submissions and evidences placed on record, and without rebutting the same. Nothing adverse has been brought on record.
4) The Ld CIT(A) has erred in sustaining the order of the Ld AO as Ld AO has erred in law and on facts of the case by framing assessment without on the basis of order passed u/s 148A(d) and Notice issued u/s 148 by Local Jurisdictional Assessing Officer, which is in contravention to Sec 144B because as per Sec 144B whole of the process of assessment should be under Faceless regime. 5) The Ld CIT(A) has erred in sustaining the order of the Ld AO as Ld AO has erred in law and on facts of the case by framing assessment, as the approval u/s 148B is mechanical in nature, without application of mind and is just an eye wash of the enacted statutory provisions 6) The Ld CIT(A) has erred in sustaining the order of the Ld AO as the Assessment order of the Ld Assessing Officer is bad in law and facts as it is prejudicial to the interests of the appellant due to lack & violation of principles of natural justice. 7) That the Appellant prays for the grant of permission to add, alter, delete, modify, any or all of the grounds of appeal at any time on or before or during the time of hearing before the Hon'ble ITAT.
Brief facts of the case are that as per information available, it was found that the funds of AVPS trust (Aggarwal Vidya Pracharini Sabha is a trust controlled and managed by Dev Wine Group and Sh. Devender Kumar Gupta is the Chairman of the Trust) are credited in the assessee’s bank to accounts of Pivotol Infrastructure Private Limited, Sh. Devender Kumar Gupta, Balaji Sales, Dev Wine Sales Corporation, Smt. Kusum Aggarwal wife of Sh. Devender Kumar Gupta etc. Diversion of funds in FY 2017-18 i.e. AY 2018-19. AO noted that since assessee has no substantive documentary evidence to furnish in support of that it was not working as conduit for circulating the funds between Dev Wines Group concerned. AO further noted that assessee has earned income to the tune of Rs. 44,50,000/- (44,50,00,000 @1% = 44,50,000) received as commission income after taking 1% of total value of transaction of Rs. 44,50,00,000/- (287500000+157500000) and the same was not offered for taxation during the year under consideration. Therefore, the same was added to the income of the assessee. Against the same, the assessee appealed before the Ld.CIT(A) who simply upheld the action of the AO by passing a non-speaking order.
I have heard both the parties and perused the records. Upon careful consideration, I note that Ld. CIT(A) has upheld the action of the AO by passing a non-speaking order and AO in his assessment order has observed that since assessee has no substantive documentary evidence to furnish in support of that it was not working as conduit for 2 | P a g e circulating the funds between Dev Wines Group concerned and made the addition in dispute. In view of the aforesaid discussions especially in the absence of substantive documentary evidence as noted by the AO and keeping in view of the peculiar facts and circumstances of the case and in the interest of justice, I remit back the issues in dispute viz. on the issue of merit as well as on jurisdictional issues to the file of the Assessing Officer with the directions to decide the same afresh, after giving adequate opportunity of being heard to the assessee and consider all the requisite documents/evidences. Assessee is also directed to furnish all the requisite documents/ evidences to the AO to enable him to decide the issues in dispute adequately and fully cooperate with the AO during the proceedings. Resultantly, the appeal of the assessee for the assessment year 2018-19 is allowed for statistical purposes. My aforesaid decision for assessment year 2018-19 will apply mutatis mutandis to 4. other appeal relevant to assessment year 2019-20 also.
In the result, both the Assessee’s appeal are allowed for statistical purposes Order pronounced in the Open Court on 31.10.2025.