TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 1314
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....rred in sustaining the order passed by the A.O. u/s 143(3) of the Act without appreciating that assumptions of jurisdiction u/s 148 by the A.O. was in violation of mandatory jurisdictional conditions stipulated under the Act. 3. For that the CIT (A) erred in confirming addition of Rs. 34,59,840/- u/s 69C of the Act on account of alleged bogus purchases made from M/s Sakaar Infra Nirman Pvt. Ltd. 4. For that the CIT (A) erred in not accepting that the sales made to M/s Sakaar Infra Nirman Pvt. Ltd. were merely accommodation entries and that no actual sales or purchases were ever effected. 5. For that the CIT (A) ought to have accepted that the sales made to M/s Sakaar Infra Nirman Pvt. Ltd. were only accommodation entries for earning commission @ 1%. 6. For that the CIT (A) erred in confirming addition made u/s 69C of the Act as because Sec.69C of the Act deals with unexplained expenditure which is not applicable in the instant case as because sales had been made to M/s Sakaar Infra Nirman Pvt. Ltd. 7. For that the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds." II. I.T.A. No. 1588/KOL/2024; AY ....
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....s from various entities. From investigation intelligence it has been gathered that these entities are bogus and are involved in providing bogus accommodation entry in the form of bogus sales. It has been seen from gathered documents that purchases worth Rs 34,59,840/- has been made by M/s SINPL during the FY 2016-17. The notice u/s 148 of the IT Act, 1961 was issued on 30.06.2021. . . . 3.4.2 As per your reply dated 24.02.2023, you have accepted that you have indulged into accommodation entries. Further, you have not raised or submitted any documentary evidences to prove that the above mentioned bogus entries transactions amounting to Rs. 34,59,840/- are genuine in nature. Hence, the above mentioned bogus purchase transactions amounting to Rs. 34,59,840/- should be treated as unexplained expenditure u/s 69C and added back to your income." 3.2. The Assessing Officer (hereinafter referred to as 'the ld. AO') in para 7.2 has held that since the assessee has herself accepted that she had indulged in bogus transactions whose sole purpose was to evade taxes, therefore, a sum of Rs. 34,59,840/- was added to the income of the assessee as unexplained expenditure u/s 69C of the Act ....
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.... towards service charges for providing accommodation bill, total accommodation charges received by me is Rs. 34,598/- as my income." 5.4 Since vide "his submission dated 24.02.2023' it is admitted fact that he had indulged into accommodation entries. Subsequently, did not raise or submitted any documentary evidences to prove that- the above-mentioned bogus entries transactions amounting to Rs. 34,59,840/- are genuine in nature. Further on 01.05.2023 in reply to show cause filed submission which is reproduced as under " You have in the show cause notice proposed to add bogus purchases transaction amounting to Rs. 34,59,840/- as unexplained expenditure u/s 69C of the Inc err e Tax Act, 1961. As already mentioned in the reply dated 24.02.2023 the assesses had issued accommodation bills only without there being any actual salts or delivery of goods to M/s Sakaar Infra Nirman Pvt. Ltd. amounting to Rs. 34,59,840/-. Ledger A/c copies of the same has already been submitted and as mentioned the same was merely an accommodation bill wherein no actual goods were ever sold. The assessee had earned accommodation charges of 1% on the total sales made to Sakaar Infra Nirman Pvt. Ltd. The ultim....
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....e reproduced as under: "69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income." 4.1. Therefore, the Ld. AO was incorrect in law in applying the provisions of Section 69C of the Act on the transactions shown as sales to SINPL. The result of search itself indicated that SINPL had made payments against the purchase of machinery and parts from various entities which were bogus and were involved in providing bogus accommodation entry in the form of bogus sales. Since the purchases were made by SINPL, the disallowance, if any, should have been made in the case of SINPL. There is merit in the argument of the asse....