Sanjeev Kumar Vs ACIT (ITAT Delhi)
Delhi ITAT Deletes ₹15.90 Lakh Addition: Genuine Sale Cannot Be Treated as Bogus Merely Because Buyer Is an Alleged Accommodation Entry Provider
The Delhi ITAT deleted an addition of ₹15.90 lakh made under section 68, holding that where the assessee had produced audited books of account, stock records, GST returns, GST invoices and bank receipts, the sale could not be treated as bogus merely because the purchaser was alleged to be an accommodation entry provider.
The reassessment was initiated based on information that M/s Sonu Monu Telecom Centre Pvt. Ltd. was engaged in providing accommodation entries and that the assessee was one of its beneficiaries. During reassessment, the Assessing Officer treated the assessee’s sale of ₹15.90 lakh to the said party as unexplained and added the amount under section 68. The CIT(A) confirmed the addition.
Before the Tribunal, the assessee submitted that the proceedings themselves were initiated on incorrect facts. The notice under section 148A(b) alleged bogus purchases, whereas the transaction in question was actually a sale. On merits, the assessee demonstrated that the transaction was duly recorded in the audited accounts, reflected in the GST returns, supported by GST invoices, the stock register evidenced outward movement of goods, and the sale consideration had been received through normal banking channels. It was also pointed out that a confirmation had been furnished in response to the notice under section 133(6).
The Tribunal held that the assessee had produced good and sufficient evidence to establish the genuineness of the transaction. It observed that there is a practical limit to the nature of evidence an assessee can reasonably be expected to preserve and produce. Once the assessee had discharged this burden by furnishing comprehensive documentary evidence, the addition could not be sustained merely because the Revenue suspected the purchaser. Accordingly, the addition was deleted. Since the assessee succeeded on merits, the Tribunal did not adjudicate the legal grounds challenging the validity of the reassessment proceedings.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal arises from order dated 29.01.2026, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC, Delhi.
