DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), NEW DELHI, DELHI vs. AGYA IMPORTS LIMITED, DLEHI

Since these two appeals pertain to same assessee and involve common issues, they were heard together and are disposed of by this common order for the sake of convenience and brevity.

The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the addition of Rs. 1,73,52,271/- on account of unexplained income u/s 69A of the Act. 4. A perusal of the grievance of the revenue shows that the tax effect is Rs 56,29,077/-, therefore, this appeal is not maintainable as per CBDT Circular No. 9/2024 dated 17.09.2024. 5. This appeal is, accordingly, dismissed with liberty to the revenue to approach the Tribunal as per the provisions of law, should it feel that the tax effect is more than Rs. 60 lakhs. 6. As a result, the appeal of the Revenue stands dismissed.

The grounds raised by the Revenue read as under: “1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,70,04,498/- on the account of unexplained cash credit u/s 68 of IT Act, 1961 without appreciating the fact that the Entry Provider himself has stated on ITA Nos. 3732 and 3755/DEL/2024 Agya Imports [A.Ys 2014-15 & 2015-16]

Brief facts of the case are that assessee company has filed its Return of Income on 30.09.2015 declaring total income of Rs. 21,71,340/-. As per credible information available on system, the ITA Nos. 3732 and 3755/DEL/2024 Agya Imports [A.Ys 2014-15 & 2015-16]

During the course of investigation, it is found that the assessee M/s Agya Imports Ltd has entertained transaction worth Rs. 1,70,04,498/- with one of the shell entity Multiblizz Traders Pvt. Ltd, under control of Shri Anil Kumar Singhal and his associates involved in the modus operandi. The AO reopened the case u/s 148.Thereafter, the Assessing Officer completed the assessment at Rs. 1,92,60,860 /- u/s 147 read with section 144B of the Act on 30.03.2022 by making an addition of Rs.1,70,04,498/- u/s 68 of the Act as unexplained cash credit and Rs. 85,022/- u/s 69C of the Act as an unexplained expenditure.

Aggrieved, the assessee went in appeal before the ld. CIT(A) who allowed the appeal of the assessee. The Revenue, now aggrieved, is before us. 11. The ld. DR relied on the orders of the authorities below. 12. Per contra, the ld. counsel for the assessee relied on the orders of the ld. CIT(A). 13. We have heard the rival submissions and have perused the relevant material on record. In the instant case, we find that the assessee has attempted to prove the entire source of payments made to Multiblizz Traders as advance for purchase of empty old glass & packing boxes. Although the assessee, prima facie, appears to have discharged its onus of explaining source of payments, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO found that the dealing with Anil Singhal involved bogus accommodation entries who charged 25 to 50 paisa per ton in case of Iron and Steel Trading and 10 paisa per meter in case of cloth trading. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the payments, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition of ₹ 5 lakh only would be just and proper to cover the issues of ITA Nos. 3732 and 3755/DEL/2024 Agya Imports [A.Ys 2014-15 & 2015-16]