ITO Vs Top-Tech Cables Pvt. Ltd. (ITAT Delhi)
U/s 68/69A – 32-Day Loan Comes & Goes Through Bank; AO’s Accommodation-Entry Theory Fails When Evidence & Cross-Examination Go Missing
Summary: The Delhi ITAT dealt with an addition of ₹39 lakh, alleged by the Revenue to represent an accommodation entry, together with an estimated 5% commission of ₹1.95 lakh. The controversy arose from information received from the Investigation Wing following search proceedings against an alleged entry provider. The Tribunal ultimately found that the AO had substantially proceeded on a third-party statement, despite the assessee producing documentary evidence regarding the loan transaction & its repayment, while simultaneously denying the assessee an effective opportunity of cross-examination.
Facts
The assessee filed its return for AY 2017-18 declaring income of ₹13,99,600. It had no business activity during the year & its disclosed income consisted of interest income. The case was reopened u/s 147 on information received from the Investigation Wing that the assessee had allegedly received an accommodation entry of ₹39 lakh from M/s Saloni Buildtech Pvt. Ltd.
The information had its genesis in a search conducted on Shri Joginder Pal Gupta on 23.12.2019, during which he stated u/s 132(4) that he was an entry provider operating through various paper companies. However, the assessee pointed out that Shri Gupta was not a director of Saloni Buildtech during the relevant year & had not specifically stated that he had provided any accommodation entry to the assessee.
