DCIT Vs Kamadgiri Exports Pvt. Ltd. (ITAT Delhi)
An Entry Operator’s Reputation Cannot Turn Every Repaid Loan into Bogus Income: Delhi ITAT
Search Information Led to Reassessment
In DCIT v. Kamadgiri Exports Private Ltd. (ITA Nos. 4117 and 4118/Del/2026), the Delhi Income Tax Appellate Tribunal considered whether an unsecured loan could be added under section 68 because the lender was allegedly controlled by a known accommodation entry operator. The Revenue’s appeals concerned assessment years 2019–20 and 2020–21.
A search conducted on 17 November 2021 in the Galaxy Group and entry operator cases led the Department to information suggesting that Kamadgiri Exports had received an accommodation entry from Albatross Homes Private Ltd. For AY 2019–20, the transaction under examination was a ₹2 crore unsecured loan. The Assessing Officer treated the loan as unexplained, relying substantially on material concerning Himanshu Verma, who was said to control the lender and had been identified as an entry provider in earlier proceedings.
The Assessing Officer also added ₹6 lakh as presumed commission for obtaining the alleged entry, calculated at 3% of the loan, and ₹61,274 relating to interest paid to the lender. The CIT(A) deleted these additions. The Revenue carried the matter to the Tribunal.
