ITO Vs Shah Nawaz Rana (ITAT Delhi)
Revenue appealed against order of NFAC which deleted addition of Rs.11,21,91,653/- made by AO u/s 68 on account of alleged accommodation entries & bogus purchases.
Assessee, an individual deriving income from MLA pension, rent & legal consultancy, had no business activity in AY 2016-17. AO reopened assessment based on survey findings in the case of entry operators Yash Pal Gupta & Rani Sharma, concluding that Assessee was beneficiary of accommodation entries routed through UP Bone Mills Pvt. Ltd. AO held that cash deposits in controlled entities were transferred through layering & finally reached beneficiaries, including Assessee. Accordingly, Rs.11.21 Cr was added as unexplained income.
Before CIT(A), Assessee produced ROC record showing that he had resigned from UP Bone Mills Pvt. Ltd. five years before relevant year, & was not connected with its affairs. He argued that he was not engaged in any business requiring purchase/sales bills & bank statements also showed no such transactions. CIT(A) found that only link between Assessee & alleged entries was PAN, while name in information was of UP Bone Mills Pvt. Ltd., a separate company. Since Assessee was not carrying on any business, there was no rationale for treating him as beneficiary. Addition was deleted.
