Saraswati Education Sansthan Vs ITO (Exemption) (ITAT Ahmedabad)
Addition for Alleged Accommodation Entry of Rs. 15.50 Lakh Deleted – AO Cannot Rely Solely on Investigation Report- ITAT Ahmedabad
Ahmedabad Tribunal in deleted addition of Rs.15,50,450/- made on account of alleged accommodation entry, holding that AO failed to carry out independent verification & made addition only on basis of Investigation Wing information.
Assessee, an educational trust, was alleged to have received accommodation entry of Rs.15.50 lakhs from Mehta Group, unearthed during a search in 2018. AO reopened assessment u/s 147 & made addition based on report that Mehta Group was engaged in providing bogus loans. Assessee explained that it had a running account with Mehta Group, availed genuine loans through banking channels, paid interest with TDS deduction, & repaid loans within the same year. Ledger account evidencing these transactions was furnished.
AO, however, ignored the ledger & details, & proceeded to treat Rs.15.50 lakhs as unexplained accommodation entry. CIT(A) confirmed the addition.
Tribunal observed that while information from Investigation Wing could trigger enquiry, AO was duty-bound to examine Assessee’s ledger & identify specific bogus entries. Instead, AO mechanically made addition without pointing out which transaction was accommodation entry. Tribunal held such action unsustainable when Assessee had furnished complete accounts.
