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Facts
The Revenue filed appeals against the orders of the NFAC deleting additions made by the AO on account of unexplained credit entries in the assessee's bank accounts. The AO had treated these credit entries, totaling Rs. 94,47,69,129, as undisclosed income under Section 69 of the Income Tax Act.
Held
The Tribunal held that the CIT(A) should have remanded the matter back to the AO for calling a remand report to ascertain the genuineness of the transactions, as the assessee had failed to prove their genuineness. Since this was not done, the issues were remanded back to the Assessing Officer for fresh adjudication.
Key Issues
Whether the CIT(A) erred in deleting the addition of unexplained credit entries without verifying their genuineness and without remanding the issue to the AO. Whether the assessee proved the genuineness of the credit entries in its bank accounts.
Sections Cited
69, 147, 144, 144B, 143(2), 46A
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Sh. M. Balaganesh & Sh. Sudhir Kumar
ORDER Per Bench : These are four Revenues’ appeals against the respective orders of the Ld. NFAC, Delhi pertaining to assessment years 2013-14, 2014-15, 2016-17 & 2017-18. Since all the four revenues’ appeals involved the identical issues, hence, the same were heard together and disposed of by this common order for the sake of convenience, by dealing with (AY 2013-14), being lead case wherein, following common grounds have been raised, except the difference in figures of addition.
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 94,47,69,129/- u/s. 69 of the Act? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 94,47,69,129/- without appreciating the fact that the assessee has failed to prove the genuineness of the transactions? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that all the credit entries in bank account stand explained on the basis of facts and documentary evidence submitted by assessee whereas the AO has observed otherwise and Ld. CIT(A) has not remanded back the issue to the AO under Rule 46A of the Income Tax Rules, 1962? 2. Brief facts of the case are that the case of the assessee was originally selected under CASS and notice u/s. 143(2) dated 2.9.2014 was issued and served upon the assessee. During the course of assessment proceedings, complete books of accounts of the assessee company (which includes its bank books as maintained by the company at its end) were produced before the AO for verification purpose during the course of original assessment proceedings. The said books of accounts (including the bank books) were duly checked by the AO on test check basis. AO noted that as per information the assessee company have the credit entries of Rs.
1,77,84,416/- in bank accounts. As per the ITR filed for the year under consideration the assessee has already shown receipts of Rs. 83,37,17,287/- thus the balance of Rs. 94,47,69,129/- (Rs. 1,77,84,416 – Rs. 83,37,17,287) remained to be taken into account. The assessee has already taken all the expenses incurred
2 | P a g e related to the business of the company into account while finalizing the books of account but the said receipts remained to be taken into account. Thus no further expenses remained to be allowed related to the balance receipt of Rs. 94,47,69,129/-. AO further noted that on the basis of information / documents available on the record, it seems that the assessee is deliberately not giving reply on the merit of the case. It failed to file any reply regarding the credit entries found in the bank statement of the assessee’s bank accounts. Therefore, AO made the addition of the receipts of Rs. 94,47,69,129/- to the total income of the assessee as undisclosed income u/s. 69 of the Act u/s. 144 r.w.s. 144B of the Act. Against the above, assessee preferred the appeal before the NFAC, who vide its impugned order 01.08.2024 has partly allowed the appeal of the assessee. Aggrieved, Revenue preferred the appeal before the Tribunal.
At the time of hearing, ld. DR has submitted that in the instant case the AO has passed the order u/s. 147 r.w.s. 144 read with section 144B of the Act and before passing the said assessment order, various statutory notices were issued to the assessee, which were not responded by the assessee. However, show cause notices dated 25.1.2023 and 27.3.2023 were partly replied by the assessee. He further submitted that despite non-response to the statutory notices during the assessment proceedings, Ld. CIT(A) deleted the addition of Rs. 94,47,69,129/- u/s. 69 of the Act, without appreciating the fact that the assessee has failed to prove the genuineness of the transactions. He further submitted that all the credit entries in bank account stand explained on the basis of facts and documentary 3 | P a g e evidence submitted by the assessee whereas the AO has observed otherwise and Ld. CIT(A) has not remanded back the issue to the AO under rule 46A of the Income Tax Rule, 1962.
Per contra, Ld. AR for the assessee relied upon the order of the Ld. CIT(A) and stated that he has passed a well reasoned order which does not need any interference on our part. 5. We have heard the rival contentions and perused the records. It is undisputed fact that in the instant case assessment order u/s. 147 r.w.s. 144 read with section 144B of the Act. We find considerable cogency in the contention of the Ld. DR that before passing the assessment order, various statutory notices were issued to the assessee, which were not responded by the assessee, the details of the statutory notices issued to the assessee, has been mentioned at page no. 1 & 2 of the assessment order. We note that despite non-response from the assessee to the said statutory notices, Ld. CIT(A) deleted the addition of Rs. 94,47,69,129/- u/s. 69 of the Act, without appreciating the fact that the assessee has failed to prove the genuineness of the transactions. In view of above, in our considered opinion, the Ld. CIT(A) should have remanded back the matter to the AO for calling the Remand Report in order to see the genuineness of the transactions, which has not been done in the instant case. Therefore, in the interest of justice, the issues in dispute are remanded back to the file of the Assessing Officer for fresh adjudication, after giving adequate opportunity of being heard to the assessee. The Assessee through his Ld. AR is also directed to cooperate during 4 | P a g e the assessment proceedings. Resultantly, the revenue’s appeal for the assessment year 2013-14 stands allowed for statistical purposes.
As regards other appeals of revenue are concerned, the same are related to assessment years 2014-15, 2016-17 & 2017-18 of the same assessee, hence, our aforesaid decision given in assessment year 2013-14, as aforesaid, will apply mutatis mutandis to these assessment years as well, being issue involved is identical in all other three appeals of the Revenue also. Resultantly, the remaining 03 appeals of the Revenue also stand allowed for statistical purposes, in the aforesaid manner.
To sum up, these Revenues’ four appeals stand allowed for statistical purposes. A copy of this common order be placed in the respective case files.
Order Pronounced on 28/10/2025.