Genuine sale consideration: Tribunal deleted Section 68 addition where receipts were banked, invoiced and offered to tax.

Whether receipts of Rs. 2,00,38,060 were accommodation entries or genuine sale consideration was decided by ITAT, which found Revenue failed to discharge its burden to negate contemporaneous documentary evidence. The assessee produced invoices, GST/VAT records, dispatch proofs, bank credits and confirmations showing inclusion in audited returns; Revenue made additions without independent enquiries or summons to the cooperative society. The Tribunal held the receipts were genuine sale consideration, not accommodation entries, and deleted the addition under section 68.

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Issues: Whether the amount of Rs. 2,00,38,060/- received by the assessee from M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Limited is an accommodation entry liable to be added under section 68 of the Income-tax Act, 1961, or is genuine sale consideration already offered to tax.

Analysis: The Department reopened assessment under section 148 and treated the receipt as an accommodation entry based on information from the Investigation Wing about widespread cash deposits and transfers through the Society. The assessee furnished contemporaneous records including sales invoices, GST/VAT documentation, proof of goods dispatched, banking credits, and confirmations showing the amounts were recorded as sale proceeds in audited books and returned income. The assessing officer disbelieved the documents and made additions without conducting independent enquiries to verify the genuineness of the sales or issuing summons to the Society; the first appellate authority accepted the documentary evidence and noted absence of enquiries by the Revenue. The Tribunal examined whether the Revenue discharged the onus of proving that receipts were not genuine sale consideration and found that the Revenue did not negate the evidence filed by the assessee nor establish the receipts to be accommodation entries; the assessee was not required to prove sources of the Society's funds which was outside its control, and making an addition when the receipt is through banking channels and already offered to tax would amount to double taxation.

Conclusion: The receipt of Rs. 2,00,38,060/- is not an accommodation entry and is to be treated as genuine sale consideration; the addition under section 68 is deleted in favour of the assessee.

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