Nirman Vs DCIT (ITAT Ahmedabad)
₹1 Cr Penny Stock / Accommodation Entry Addition u/s 69A Deleted – Reopening Held Based on Borrowed Satisfaction & No Assessee-Specific Evidence – ITAT Ahmedabad
The AO reopened assessment alleging that the assessee received ₹1 crore accommodation entry linked to search proceedings against alleged entry operators. Addition u/s 69A was made based largely on investigation reports and general modus operandi without identifying specific transaction trail or material linking the assessee. CIT(A) mechanically confirmed the addition.
ITAT held that reopening was based on vague and non-specific information amounting to borrowed satisfaction, as no cheque details, bank entries, seized material or ownership of unexplained money were established. The AO’s shifting stand (loan → penny stock → LTCG) showed lack of independent application of mind. Further, reliance on third-party statements without providing copies or cross-examination violated natural justice. Since essential conditions of s.69A were not satisfied and no evidence connected the assessee to alleged entries, the Tribunal deleted the entire addition and allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order dated 30.06.2025 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)” for short), under Section 250 of the Income-tax Act, 1961 (“the Act” for short) for Assessment Year 2014-15.
