Anjali Textile Mills Vs DCIT (ITAT Ahmedabad)
Section 68 Addition Cannot Rest on Phantom Credits: Revenue Must First Prove That the Disputed Amount Was Actually Credited
The Ahmedabad ITAT deleted additions made u/s 68 & 69C, holding that an addition cannot be sustained merely on the basis of third-party information describing transactions as accommodation entries when the bank statements and account confirmations reveal an entirely different factual position.
The assessment for AY 2013-14 was reopened u/s 147 on information that the assessee had allegedly received accommodation entries aggregating to ₹17,66,155 from M/s Shambhu Tax Fab and M/s Krishna Enterprises. The AO treated the amount as unexplained cash credit u/s 68 and further added ₹35,323 u/s 69C towards the alleged commission paid for obtaining the entries.
The assessee consistently maintained that the information relied upon by the AO was factually incorrect. It explained that the transactions of ₹7,50,000 each appearing in the bank account were debit entries, representing repayment to M/s Shambhu Tax Fab, and not amounts received by the assessee. Similarly, the amount of ₹16,155 received from M/s Krishna Enterprises represented consideration for sales made to that party. The assessee categorically denied having received the alleged amount of ₹10 lakh from M/s Krishna Enterprises.
