DCIT Vs Apoorva Leasing Finance and Investment Company Ltd. (ITAT Delhi)
Shell Company Tag Fails Again: ITAT Rejects ₹1 Cr Accommodation Entry Addition- No Evidence, Only Suspicion: Reopened Assessment Collapses
In DCIT Vs. Apoorva Leasing Finance & Investment Co. Ltd., ITA No.635/Del/2025 & CO No.179/Del/2025, AY 2011-12, order dated 31.12.2025, Delhi ITAT dismissed Revenue’s appeal & upheld deletion of addition of ₹1.00 crore alleged as commission income for providing accommodation entries.
Assessee’s return was originally processed u/s 143(1) & later assessed u/s 143(3) pursuant to proceedings u/s 153C arising from search in S.K. Jain Group on 14.09.2010, wherein no adverse finding was recorded against Assessee. Despite this, AO reopened assessment u/s 147 & treated advances/investments of about ₹57.48 crore as accommodation entries, estimating commission @1.75% & making addition of ₹1.00 crore.
CIT(A) deleted addition holding that AO relied solely on Investigation Wing report & SFIO/MCA material without any independent incriminating evidence for AY 2011-12. Tribunal noted that NCLT, NCLAT & Supreme Court had already rejected MCA’s allegation that Assessee was a shell company, & such findings had attained finality. Further, Assessee had consistently declared substantial profits & paid taxes in subsequent years, negating shell-entity allegation. ITAT held that mere suspicion, borrowed satisfaction & surmises cannot justify reopening or addition, especially when earlier 153C assessments accepted returned income. Accordingly, Revenue’s appeal was dismissed & Assessee’s cross-objection (not pressed) was also dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal filed by the Department and the Cross Objections filed by the assessee are against the order dated 28.11.2024 of the ld. Commissioner of Income-tax (Appeals), Delhi-23 [hereinafter referred to as the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the assessment order dated 26.12.2018 of the ld. AO/Ld. DCIT, Circle-3(1), New Delhi, (hereinafter referred to as ‘the ld. AO’) u/s 147 r.w.s. 144 of the Act for Assessment Year 2011-12.
