TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 1199
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....d in all the appeals of Revenue is against the deletion of addition by the ld. CIT (A) as made by the ld. AO u/s 68 of the Income-tax Act, 1961 (the Act). As the facts and circumstances are exactly identical in all the three appeals hence, we will take first ITA No.1454/KOL/2025 for A.Y. 2014-15 as lead case and decide the issue accordingly. A.Y. 2014-15 ITA No. 1454/KOL/2025 4. The facts in brief are that the assessee filed the return of income on 30.09.2014, declaring total income at Rs.3,280/-. Thereafter, the case of the assessee was reopened by issuing notice u/s 148 of the Income-tax Act, 1961 (the Act) on 28.07.2022, after following the procedure laid down under the Act by passing order u/s 148A(d) of the Act on 28.07.2022, recording the reasons that assessee has received Rs.67 lacs from certain entities which has escaped assessment. Accordingly, notice u/s 143(2) and 142(1) along with questionnaire were issued and assessee replied such questionnaire by filing all the details and evidences before the ld. AO. The ld. AO noted that the assessee has received money from other companies and passed on the funds to the beneficiaries, Khetan Tracon P. Ltd. of Rs.17,00,000/-....
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....d, but debited on account of receipt of sale proceeds of shares. Subsequently, when the appellant company returned the advance through banking channel, only debit entry was made in the name of creditor. Thus, the whole exercise of making addition u/s 68 was a misnomer since no party account was credited in these transactions. Even for the sake of argument, if one considers the application of sec. 68, the three major parameters as per the decisions of various courts are to be considered viz., identity of the creditor, genuineness of transaction and creditworthiness of the party advancing funds. In this case, the appellant company sold the shares and received the sale proceeds from M/s Khetan Tracon Pvt. Ltd. (Rs. 17 lakhs out of which sum of Rs. 6 lakhs received in excess was returned) and from M/s Prateek Plastimetals Pvt. Ltd. (Rs.; 60 lakhs). Assessing Officer has not doubted the identity of these purchasers of shares, their creditworthiness and genuineness of the transactions. 5.3.2 Secondly, it is an undisputed fact that as per the balance sheet filed by appellant company with various statutory authorities, it held those shares as on 01.04.2013 and was not hol....
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....Shri Navneet Upadhyaya & Shri jay Kumar Thakur was involved in accommodation entry providing and that they were layering funds through intermediaries i.e. shell companies managed by entry operators and M/s Khetan Tracon Pvt. Ltd. & M/s Prateek Plastimetals Pvt. Ltd. were the ultimate beneficiaries. Further, the AO also relies heavily on the statement given by one Shri Devesh Upadhyaya to conclude that appellant is an entry provider. However, it is seen that AO did not attempt to afford the opportunity of cross examination of such witness in spite of a specific request to that effect from the appellant. This is clear violation of natural justice. In fact, whether name of appellant company is figuring in such statement and if so, whether appellant company is shown as intermediary or beneficiary etc. are still not clear since the statement was neither furnished to the appellant nor made part of the assessment order, even though heavy reliance was placed on it. Further, no attempt is seen to have been made by the AO to corroborate such statement of Shri Devesh Upadhyaya and hence no reliance can be placed on such dumb document. 5.3.4 Though this is the edifice of the assessmen....
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....ress and PAN of the payers. Therefore, the transactions are to be treated as genuine as held in a number of judicial decisions. However, the AO made the addition u/s 68 after merely reproducing the submission of the appellant and simply stated that the reply of the appellant has been considered and the same has not been found acceptable. AO failed to state as to why the reply of the appellant is not acceptable. This tantamount to travesty of justice. Considering the above discussions, the addition made u/s 68 is hereby deleted and the grounds of the appellant are allowed. 5.4. Ground Nos. 9 to 13: These grounds of the appellant relate to the levy of interest u/s. 234A, 234B, initiation of penalty proceedings u/s. 271(1)(c) and general grounds. As these grounds are consequential, these grounds are dismissed as infructuous. 5.5. In the result, the appeal of the appellant is partly allowed." 6. After hearing the rival contentions and perusing the materials available on record, we find that the assessee company has disposed its investments amounting to Rs.11,00,000/- to Khetan Tracon P. Ltd. and received Rs.17 from the said party during the financ....