ITO Vs Shweta Manish Jain (ITAT Ahmedabad)
Bogus entry theory collapses: Unsigned data, no cross-examination, no evidence — ITAT Ahmedabad upholds deletion of u/s 69C addition
Ahmedabad Tribunal dismissed Revenue appeal & upheld deletion of addition of ₹10,00,059 made u/s 69C on allegation of accommodation entries. Tribunal noted that reassessment was triggered merely on generic Investigation Wing information alleging bogus entries from a third party, without any primary evidence, bank trail, statement or document linking Assessee with alleged entry provider. AO neither confronted Assessee with adverse material nor allowed cross-examination, rendering addition legally unsustainable. Tribunal concurred with CIT(A) that unsigned third-party data, loose sheets or uncorroborated digital information have no evidentiary value in absence of independent evidence. Since Assessee had furnished bank statements, GST returns, invoices, ledgers & reconciliations which were not found to be false, addition based purely on assumptions & presumptions was rightly deleted. Revenue appeal was accordingly dismissed
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Department against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 25.07.2025 passed for A.Y. 2018-19.
2. The Department has raised the following grounds of appeal:
“1. Whether on facts and circumstances and in law, the Ld. CIT(A) has erred in deleting addition of Rs. 10,00,059/- u/s 69C of the I.T. Act, when the assessee could not substantiate with documentary evidences that the funds transferred to the Bank account of the entity was not for layering of funds in lieu of entries?
2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that the assessee is a beneficiary of accommodation entries under the guise of bogus purchases from Shri Kirit D. Patel during the year under consideration?
3. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary.
4. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored.”
3. The brief facts of the case are that the assessee, Smt. Shweta Manish Jain, a proprietor engaged in trading activities, filed her return of income on 21.09.2018 declaring business income. Based on information received from the Investigation Wing asserting that she had received accommodation entries from Shri Kirit D. Patel, the Assessing Officer reopened the assessment under section 147 and completed the reassessment under section 147 r.w.s. 144B of the Act vide order dated 21.03.2023. During reassessment, the Assessing Officer held that the assessee had allegedly received bogus accommodation entries amounting to Rs. 10,00,059/- from the said party and held that the assessee failed to furnish corroborative proof to rebut the allegation.
