Accommodation Entry Addition Unsustainable Without Evidence: ITAT Delhi

Virender Verma Vs DCIT (ITAT Delhi)

Accommodation entry allegation without supporting material & seized ledger not belonging to assessee, addition unsustainable: ITAT Delhi

Assessee has filed the original return of income u/s 139. A search & seizure operation u/s. 132 was conducted in the case of JBL Group & during the course of the search, digital data maintained in a software called Hazir Johri (HJ) , was seized at the residential cum business premise of promoter of JBL. The digital data clearly showed that JBL had been systematically engaged in cash transactions with a number of entities, mostly bullion traders & jewellers. The JBL books of accounts as maintained in the HJ software, contained both cash transactions of JBL as well as its transactions through banking channels. The transactions through banking channels are reflected in the Tally books of accounts of JBL whereas the cash transactions are not reflected in the same. The returns of income have been filed by JBL on the basis of books of accounts maintained on Tally software.

AO observed that ledger account was found with code name(s) “Titu” wherein some cash / bank transactions pertained to Assessee. On perusal of seized data, among others, the ledger account found with code “Titu”  allegedly pertaining to Assessee was found.  AO of the searched person has recorded the satisfaction u/s 153C  against the assessee that assessee has made some cash/bank transaction mentioned in ledger namely ‘Titu’ belonged to Assessee. Accordingly, notice u/s 153C  was issued & in the response no return of income was filed by Assessee. Again, notice u/s 142(1)  along with questionnaire were issued but  Assessee did not comply with questionnaire & show cause notice. AO assessed the income of  Assessee u/s 144  & made the addition of Rs. 2,18,615/- as the 2% commission of the accommodation entry.