TaxTMI 
TaxTMI 
2026 (3) TMI 617
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....e above cited appeal, only one issue is to be adjudicated i.e., whether the amount received by the assessee company from M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Limited (hereinafter in short "SRMUCS" or "the Society") is to be treated as bogus accommodation entry as concluded by the Ld. Assessing Officer [hereinafter in short "Ld. AO"]. The Ld. CIT(A) deleted the said addition for the reasons mentioned in his Appellate Order. Aggrieved by the deletion made by the Ld. CIT(A), the Revenue filed an appeal before the ITAT stating that the Ld. CIT(A) is not correct in deleting the addition because the Ld. AO has received information from the Investigation Wing of the Income Tax Department stating that the same is an accommodation entry. A search and seizure operation was conducted by the Investigation Wing on SRMUCS and huge cash was deposited in the bank account of SRMUCS and then the money was transferred to various parties and the present assessee is one of the beneficiary of such an entry. 4. The facts of the case are as follows, in brief: a) As mentioned above, a search and seizure operation was conducted in the case of SRMUCS where the Inves....
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....gh banking channels, i.e., credited to their bank account. The amount received from the Society was treated as sale consideration of the goods and the same was properly accounted in their audited books of accounts. Since the amount received as sale consideration, it was already offered as income, making the addition again as accommodation entry is not correct, replied the assessee. d) The assessee has filed the particulars of sale bills, GST paid, description of the goods which were sold and proof to show that the sales and sale consideration was already recorded in their books of accounts. e) Since the amount was already offered as income, making an addition again amounts to double taxation and the same is not permissible in the eyes of law, it was stated by the assessee. f) Not satisfied with the explanation of the assessee, the Ld. AO made an addition stating that the assessee did not furnish the information in the early stages of re-assessment proceedings and hence the Ld. AO was not left with the option for conducting any enquiry to verify the genuineness of the documents filed by the assessee by way of issuing any summons to the society or notices u....
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.... a) The Ld. CIT(A) has got plenary powers of the Ld. AO and he should have examined the case if Ld. AO failed to bring the sufficient material on record. In such case the obligation to conduct proper enquiry shifts to the Ld. CIT(A) and the addition cannot be simply deleted by the Ld. CIT(A) adjudicating that the Ld. AO was not able to bring sufficient material on record. From the ground of appeal, it is observed that Revenue is aggrieved because the "Society" could not explain the sources of the said deposits in their bank account. b) Another ground taken by the Revenue before the ITAT is that assessee is one of the beneficiary of the accommodation entry as per the information received from the Investigation Wing of Department. Since the explanation offered by the assessee was not satisfactory that these deposits were received from the society in the regular course of its business transactions, the action of the Ld. AO is correct and the addition should have been upheld. 7. During the proceedings before the ITAT, Ld. Departmental Representative [hereinafter in short "Ld. DR"] has argued extensively and the summary of Revenue's arguments are as follows: a) T....
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....ed to prove the sources of the money received from the society because they received the money through banking channels and the parties to whom the goods were sold, informed them that the money is being sent to them as sale proceeds for the goods sold to them. c) If the "Society" could not explain the source of the money deposited in its books of accounts, the assessee should not be punished for the same, because the "Society" from whom they received money is not under their control. d) It was argued that, assessee company is not aware of the relationship between the parties to whom the goods were sold and the "Society" which was searched by the Department. As far as they are concerned, the assessee has sold the goods and they received the money as sale consideration which was sent to them by banking channels. There was no reason to suspect the "receipt of money" because it was sale consideration and it was received through banking channels. Apart from that, the receipt is part of their total receipts admitted in their regular return of income. e) The assessee never failed in producing any document which was required by the Revenue and promptly filed all ....