ITO Vs Amrat Mali (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income-tax (Appeals) [CIT(A)] deleting an addition of ₹26,08,000 made under Section 68 of the Income-tax Act, 1961. The addition had been made during reassessment proceedings on the basis of information received from the Investigation Wing following a search conducted under Section 132 in the cases of certain individuals. According to the information, the assessee was alleged to have received accommodation entries amounting to ₹26,08,000 through two companies controlled by the searched persons. The Assessing Officer completed the reassessment under Sections 144 read with 147 and treated the amount as unexplained cash credit under Section 68, primarily relying on the information received from the Investigation Wing.
The CIT(A), after examining the material on record, deleted the addition. It was noted that the Assessing Officer had relied solely on information received from the Investigation Wing and the assessee’s alleged non-compliance without conducting any independent enquiry or verification. The CIT(A) observed that the assessee had filed a response, stated that the alleged companies were unlisted companies, and submitted details of capital gains, which did not show any transactions with those companies. The assessee had also declared business income under Section 44AD and stated that there were no debtors or creditors. The assessee specifically denied having any dealings with the alleged accommodation entry providers and requested the Assessing Officer to furnish details and break-up of the alleged transactions to enable an appropriate response. According to the CIT(A), the Assessing Officer did not provide such details or undertake any further enquiry.
