ACIT Vs Ambarnuj Finance and Investments Pvt Ltd. (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeals and upheld the deletion of protective additions made under Section 68 of the Income-tax Act for Assessment Years 2015–16 and 2016–17.
The dispute concerned additions of ₹7.35 crore and ₹27.06 crore, respectively, treated by the Assessing Officer as unexplained cash credits. These additions were made on a “protective” basis, with the allegation that the assessee was part of an accommodation entry network controlled by certain operators. The Assessing Officer considered the transactions as part of a structured arrangement for providing entries to various parties.
The Commissioner of Income Tax (Appeals) deleted the additions, holding that unless it is established that the assessee is the actual beneficiary or owner of the cash credits, such additions cannot be sustained in its hands. It was also noted that the Department had already made substantive additions in the cases of the alleged entry operators.
The Tribunal observed that the additions in the present case were admittedly protective in nature. It further noted that in similar matters arising from the same search action, earlier Tribunal decisions had upheld deletion of such protective additions. Following the principle of judicial consistency, the Tribunal upheld the findings of the Commissioner (Appeals).
