Section 68 Addition Deleted as Investigation Wing Failed to Prove Receipt: ITAT Kolkata

ITO Vs Kamala Nayan Vala (ITAT Kolkata)

Section 68 addition cannot survive when alleged accommodation entry is neither reflected in assessee’s bank account nor supported by transaction details: Kolkata ITAT

Summary: The Kolkata Bench of the Income Tax Appellate Tribunal has upheld the deletion of an addition of ₹14.01 lakh under Section 68, holding that information received from the Investigation Wing cannot, by itself, establish that the assessee received an accommodation entry when the Department failed to produce the relevant bank transaction or any evidence showing the credit in the assessee’s account.

The Tribunal noted that the assessee had specifically denied having any transaction with the alleged entry provider and had asked the AO to furnish the transaction details. Despite this, neither the AO nor the Revenue before the Tribunal produced any document connecting the assessee with the alleged entry.

Reassessment based on Investigation Wing information

The assessee’s case was reopened on the basis of information received from the DDI (Investigation), Unit 4(2), Kolkata.

According to the information, M/s Bhawani Enterprises, a proprietary concern of Shri Raju Bharti, was not filing income-tax returns but was operating bank accounts through which cash was deposited and accommodation entries were thereafter provided by cheque.