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Facts
The assessee challenged assessments for AY 2017-18 and 2018-19, where commission income for accommodation entries was added. These additions were based on a statement recorded from a searched person under Section 132, who claimed involvement of the assessee among 100 companies providing such entries.
Held
The Tribunal held that the assessments were not sustainable as they lacked specific incriminating material found during the search. It ruled that a mere admission or confession without supporting specific evidence unearthed during the search carries no significance, citing CBDT circulars.
Key Issues
Can assessments for accommodation entries, made in proceedings under Section 143(3) and Section 153C, be sustained solely on the basis of an authorized person's statement recorded under Section 132, without specific incriminating material found during the search?
Sections Cited
143(3), 153C, 132
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year : 2017-18 : Asstt. Year : 2018-19 Sadhvi Exim Ltd., Vs DCIT, 6/249, Vipul Khand, Gomti Nagar, Central Circle-29, Uttar Pradesh-226010 New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AAVCS1889F Assessee by : None Revenue by : Sh. Dayainder Singh Sidhu, CIT-DR Date of Hearing: 30.09.2025 Date of Pronouncement: 30.09.2025 ORDER Per Satbeer Singh Godara, Judicial Member: These assessee’s twin appeals in & 6109/Del/2025 for Assessment Years 2017-18 & 2018-19, arise against the CIT(A)-25, New Delhi’s DIN & order No. ITBA/APL/M/250/2024-25/1069978542(1) & 1069978542(1) dated 28.10.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”), respectively.
Cases called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
The Revenue vehemently argues that both the learned lower authorities had rightly initiated u/s 153C proceedings & 6109/Del/2025 Sadhvi Exim Ltd. against the assessee which finally culminated in the assessee’s corresponding identical twin assessments inter alia adding commission income on accommodation entries involving varying sums, as upheld in the lower appellate discussion. It is in this factual backdrop that we sought to know about the corresponding incriminating material found or seized against the assessee during the course of search herein dated 13.04.2017.
Learned CIT-DR takes us to both the impugned assessment orders dated 30.04.2021 that the searched person herein had got recorded his statement that he had around 100 companies including the assessee which provided accommodation entries. He could hardly dispute that no such specific incriminating material found/seized during the course of search herein has been quoted by both the learned lower authorities so as to add the impugned alleged accommodation entries @ 4% as per PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC).
Learned CIT-DR at this stage seeks to buttress the point that the impugned commission income stands added as per the assessee’s authorized person’s search statement recorded u/s 132 of the Act. We are of the view that such a mere admission or confession; during search in absence of the specific evidence & 6109/Del/2025 Sadhvi Exim Ltd. unearthed, hardly carries any significance as per the CBDT’s twin landmark circular dated 10.03.2003 and 18.12.2014, as the case may be. We accordingly hold in this factual backdrop that the learned Assessing Officer’s impugned twin assessments herein are not sustainable in law since not based on any specific incriminating material. The same stand quashed therefore. Ordered accordingly.
All other remaining pleadings between the parties stand rendered academic.