TaxTMI 
TaxTMI 
2025 (8) TMI 1374
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....Rani Sharma and Sh. Mrityunjay Singh entity operator 2 The L.d. CIT(A) erred in entirely disregarding the finding of the AO that Yashpal Gupta and his associates who categorically accepted that entities controlled and managed by them M/s S.K. Agencies involved in providing accommodation entities 3 Whether on the facts and circumstances of the case the L.d. CIT(A) was justified in deleting the addition and ignoring the finding of AO that the assessee failed to submit any confirmation from the party or any third party document to prove the transactions genuine 4 Whether on the facts and circumstances of the case the L.d. CTT(A) was justified by deleting the addition made us 69C of Rs. 1,70.19.475/-and ignoring the decision of Hon'ble Supreme Court in case of N.K. Protiens Ltd. vs DCIT dated 16.01.2017 SLP(C) 963/20172 5. That the department craves to add or amend the grounds of appeal before Hon'ble ITAT is finally heard or disposed off. 3. The assessee, a company has filed return of income under section 139(1) of the Act for the A.Y. 2018-19 on 31.10.2018 declaring a total income of Rs. 40,87,550/-. The assessee M/s. My Paper Merchants Pvt.....
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.... Shri Yashpal Gupta and his associates were recorded on oath wherein they accepted that entities controlled by them are involved in providing accommodation entries in lieu of cash provided by beneficiary. It was also found that these entitles were regularly receiving credits from certain entities whereas there was no stock with these entities and they were not doing regular business. In the statement recorded on 27.08.2018, Shri Yashpal Gupta has clearly stated the modus operandi of his business of fake billing. 5. The aforementioned facts lead to the irresistible conclusion that the assessee did undertake the sale activity and, therefore, made the corresponding purchases. However, the claim of purchases from the suppliers identified by the assessee, cannot be accepted due to reasons mentioned above. In other words, while the impugned purchases were not made from bogus parties, the purchases per se did happen. The assessee has not furnished any evidence to show comparables supported by purchase of similar items from other parties to establish that the transactions were at arm's length. Accordingly, additional gross profit needs to be estimated on the purchases claimed to be ....
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....on the merits of the case and filed certain evidences such as Stock register, confirmation from the transporter of the goods, proof of delivery/bilties, etc. UM It is quite clear that the Ld. AO did give cognizance to this evidence but failed to detail or controvert the submissions of the assessee in the assessment order, despite the fact that the assessment order had been passed after good 5 days from the date of such response. Coming to the merits of the case, it is seen that the basis/reason of addition made by the AO are as under: -. 1. Merely showing that payments were made from banking channels does not prove the genuineness of the purchase transaction. 2. Trend of purchase and payment with M/s SK Agencies is different from other parties. 3. No confirmation has been filed from the vendor or any third party. 4. Sh. Yashpal Gupta, controller and manager of M/s SK Agencies has accepted that this entity is involved in providing accommodation entries. In response, the Appellant has submitted that: 1. The purchase made from M/s S.K Agencies are genuine, relying on the following pieces of evidence: - 1.....
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....en place physically as well. As for the statement of Sh. Yashpal Gupta, the Ld. AO states that he is the controller of impugned vendor and admitted for having provided accommodation entries through this entity. The initial onus to disprove the statement of Sh. Yashpal Gupta and prove the genuineness of the purchase transaction was on the Appellant The Appellant duly discharged its onus by producing the invoices, transportation bills, stock register and transporter's confirmation. Thus, the onus now shifted to the AO for disproving the evidence filed by the Appellant or by bringing any new material on record. The AO has grossly failed to point out any discrepancy or infirmities in the evidence produced. Also, despite repeated requests, the Ld. AO should have shared the statement of Sh. Yashpal Gupta with the Appellant in consonance with the principles of natural justice. In respect of facts of the case reliance is placed on the judgment of Hon'ble Supreme Court in the case of Commissioner of Income Tax-7, New Delhi Vs. Odeon Builder Pvt. Limited as reported in (2019) 418 ITR 315 (SC) wherein it has been opined by the Apex Court that :- "Where asses....