TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1052
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....the assessee under the guise of certain purchase/sales. The Assessing Officer observed that the accommodation entries were provided by the following three entities controlled by Shri Ashok Kumar Gupta:- * Umesh Kumar Vivek Kumar (prop. vivek Gupta, Nephew of Ashok Kumar Gupta) for an amount of Rs. 1,80,00,262/-. * Mahavir Prasad Suresh Kumar (Prop. Suresh Kumar servent of Ashok Kumar Gupta) for an amount of Rs. 24,74,879/- & Rs. 25,26,009/- * S A Agro Internation (Prop. Sandeep Gupta, son of Ashok Gupta) for an amount of Rs. 1,75,71,650/-. 4. As noticed above, Learned CIT(A) set aside the above assessment order with directions to the Assessing Officer to make fresh assessment. Feeling aggrieved by the said directions contained in the impugned order, the assessee appellant is before this Appellate Tribunal. 5. Arguments heard. File perused. 6. When the assessee was before Learned CIT(A), by way of challenge to the above said assessment order, in para 4 of the impugned order, Learned CIT(A) observed that the Assessing Officer passed an ex-parte order u/s 147 r.w.s 144 of the Act. Learned Counsel for the appellant has submitted that the assessment order could not be termed t....
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....ncial year 2016-17 and to the tune of Rs. 4,05,71,650/-, through dummy/paper concerns namely, M/s Umesh Kumar Vivek Kumar, SA Agro International and Mahaveer Prasad Suresh Kumar, which were controlled and managed by the above said Shri Ashok Kumar Gupta. 12. Admittedly, notice u/s 148 of the Act was issued to the assessee on 26.07.2022. Thereupon, the assessee furnished his return of income. Thereafter, notice u/s 143(2) of the Act was issued to the assessee on 09.01.2023, but the assessee did not submit any response thereto. However, when notice u/s 142(1) of the Act was issued to the assessee on 30.01.2023, the assessee furnished his response that he had actually made transactions through said entities and that payments were made through banking channels. The assessee also submitted balance sheet of M/s Uma Traders, Proprietorship of Shri Vinod Kumar Gupta-the assessee, bank statement of account maintained by HDFC Bank, for the period from 01.04.2016 to 31.03.2016, audit report, acknowledgment of return of income with computation of income details of purchase and sales during financial year 2016-17, and statement of his own account with State Bank of India. 13. The Assessing ....
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....een submitted by the assessee before the Assessing Officer. That is why, Learned CIT(A) was of the opinion that the issues raised by the appellant required extensive enquiry and verification, which was not possible during appellate proceedings. Accordingly, in order to provide another chance to the appellant to present his case, Learned CIT(A) remitted the matter to the Assessing Officer for fresh assessment. 17. It may be mentioned here that before Learned CIT(A), the assessee appellant raised additional grounds i.e. jurisdiction for issuance of notice u/s 148 of the Act, and that the approval for re-opening was obtained from the Pr. Commissioner of Income Tax instead of Pr. Chief Commissioner of Income Tax. Both these were raised as ground Nos. 1 and 2 in Form No. 36 presented before Appellate Tribunal. 18. It may also be mentioned here that even though initially in the course of arguments, Learned counsel for the appellant touched the two additional grounds raised before Learned CIT(A), but faced with certain submissions put forth from the side Ld. DR for the department, learned counsel for the appellant opted not to press any of the said two grounds before us. Accordingly, ....
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.... or Deposit from the said creditors and not even the amount of purchases is found credited in the books of the assessee; that on the contrary, the amount of purchases is a debit in the books of the Assessee and thus, the provisions of section 68 are not applicable for the purpose of allowability and disallowability of any deduction, as section 68, which is a deeming provision, is applicable only when any sum is found credited in the books of the assessee and the assessee is not able to explain the nature and source of such credit. We rely upon: * Hon'ble Allahabad High Court in CIT v. Pancham Dass Jain (205 CTR 444, has held that the provisions of section 68 of the I.T. Act are not attracted to the amounts representing purchases made on credit. * Hon'ble Allahabad High Court in CIT v. Jagdish Prasad Tewari (220 Taxman 141, has held that where the assessee had made payments to the creditors through cheques, merely because some creditors had not confirmed the receipts, no addition as cash credit could be made to the assessee's income. * Hon'ble Gujarat High Court in the case of CIT v. Nangalia Fabrics Pvt. Ltd. 40 taxmann.com 206 has held: We have considered the....
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....g purchase, no addition could be made under Section 68 inasmuch as it is not in dispute that the creditors outstanding related to purchases and the trading results were accepted by the AO. We are, therefore, of the opinion that no substantial question of law arises for consideration in this case. The appeal is accordingly dismissed." 16. The Ld D.R placed his reliance on the decision rendered by the Bangalore bench of ITAT in the case of Suresh Kumar T. Jain (supra), which was also confirmed by Hon'ble Karnataka High Court, vide its order dated 20-11-2018 passed in ITA No.160 of 2010. The Ld D.R contended that the outstanding trade creditors could be added u/s 68 of the Act. We have gone through the above said decision and notice that the facts prevailing in that case were different. In the above said case, most of the creditors confirmed the outstanding balances as per their books of accounts, which were much lesser than the outstanding balances disclosed by the assessee before the High Court. Copies of confirmation letters received from the creditors were also furnished to the assessee, but he did not offer any explanation. Hence, it was considered to be a case of either pa....
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....n rejection of books of accounts HELD THAT: opinion of the assessing officer is required to be formed objectively with reference to the material available on record. Hence, application of mind is sine qua non for forming the opinion. The only reason placed by the Id. AO in his order that the full name, address or/and PAN of the customer to whom goods were sold in cash during the course of business below to the prescribed limit has not been given. It is voluntary to the customer to provide their personal information to the assessee while goods being sold and even the law does not mandate to the assessee up to an amount of Rs. 2 lac. The action of the Id. AO making an addition u/s 68 as unexplained cash deposit without rejecting the books of account is unwarranted. Even the Id.AO has not find any defects in the details submitted by the assessee and audited books were considered and accepted while finalizing the assessment. As relying on SHRI CHANDRA SURANA [2022 (12) TMI 750-ITAT JAIPUR] case we vacate the addition made under section 68 of the Act as the same cannot be made without rejecting the books of account of the assessee regularly maintained by the assessee and the said cash d....
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....Profit & Loss Account, provisions of section 68 of the Act cannot be attracted as regards said income from the sales. 23. However, in the end, Learned counsel submitted that in the given facts and circumstances, having regard to the sales by the assessee, which were not doubted by the department, addition to the tune of about Rs. 12,50,000/-shall meet the ends of justice, as against addition of Rs. 4,05,71,650/-, Learned DR has also submitted that this is a case where purchases were made by the assessee out of books of accounts, and in this way, the assessee routed unaccounted income on the basis of accommodation entries regarding purchases and sales, and further that there is no merit in the contentions raised on behalf of the appellant. 24. It is correct that sales having been reflected by the assessee in the books of accounts maintained by the assessee, the amount of sales already disclosed, cannot be part of such an addition. In case, sales reflected in the books of accounts are also made part of the addition under section 68 of the Act, it would amount to double taxation, as rightly submitted on behalf of the appellant. However, it is significant to observe here that when,....