TaxTMI 
TaxTMI 
2026 (10) TMI 607
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....who had apparently provided a transaction entry to the assessee. The assessee was seen to have entered into a transaction with this group of accommodation entry providers and, therefore, the cases were picked up for reassessment u/s 147/148 of the Act, based on the information received from the Investigation Wing. For AY 2018-19 an addition of Rs. 46,65,000/- was made u/s 68 of the Act and Rs. 466,00,000/- was made u/s 69C of the Act, respectively on account of bogus purchases and unexplained expenditure of commission for arranging the bogus purchases. For AY 2019-20 an addition of Rs. 32,73,010/- was made on account of alleged bogus accommodation entry and a further addition of Rs. 81,825/- was made on account of estimated commission paid for arranging the said bogus accommodation entry. 2.2 The assessee approached the CIT(A) for both the years and was successful in obtaining relief on the entire quantum of additions made in both the years. 2.3 The Revenue is aggrieved and has approached the ITAT with grounds challenging the deletion of the amounts added by the Ld. AO for both the years. Since there is some variation in the facts of the two cases, we may deal with the two ap....
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....the Principal Officers of these entities were returned back unserved. It was averred by the Ld. DR that on the basis of such enquiries the impugned additions were made. 3.2 Per contra, the Ld. AR relied on the order of the Ld. CIT(A) and read out from various portions of this order on pages 43 to 45 of the impugned order. It was pointed out by the Ld. AR that the assessee had transacted through banking channels and the entities with whom the said transaction had been entered into were registered with GST Authorities. It was also pointed out that an addition could not merely be sustained on the basis of third-party statements, that too obtained at the back of the assessee. 3.3 We have considered the rival submissions and have gone through the records before us. We find that while the transactions may have taken place through banking channels and the two entities with whom such transactions were purportedly undertaken with, be registered with GST Authorities, but we cannot ignore the fact that these entities are non-filers; the summons issued to them were returned back unserved; and finally the so-called ledgers and other account details purportedly presented before the Ld. AO ....
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....ction with the said Shri Daya Shankar or entities controlled by him. 4.4 The Ld. AR, on the other hand, relied on the findings given in the impugned order and stated that there was absolutely no transaction with any organization controlled by the said Shri Daya Shankar. It was the submission that the assessee had all along protested this so-called relationship but the Ld. AO insisted on relying on the information available through "insight portal" of the I.T. Department and simply declined to entertain any idea that there was absolutely no transaction as alleged. 4.5 We have considered the rival submissions and have gone through the records. We find there is a very clear finding of fact in the impugned order, which for the sake of reference deserves to be extracted suitably: "7.7 On the other hand, the appellant has consistently denied having entered into any transaction with the said party. It has been contended that no such purchases were made during the relevant financial year and that the alleged transactions are not reflected in the books of account. The appellant has placed reliance on the purchase register, GSTR-2A, and audited financial statements to demonstr....
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....en made on the basis of information that certain sales have been reported by a third party in its GST returns. However, such unilateral reporting by a third party cannot, in itself, lead to a presumption that corresponding purchases were made by the appellant, particularly when the appellant has categorically denied such transactions and the same are not reflected in its books of account. 7.12 The Assessing Officer has also not established any flow of funds from the appellant to the alleged entry operator. There is no evidence of payment, either through banking channels or otherwise, nor is there any evidence of cash withdrawal or circulation of funds linking the appellant with the alleged accommodation entry provider. In the absence of such foundational evidence, the assumption that expenditure has been incurred remains unsubstantiated. ---------- 7.14 The appellant has placed on record its purchase register, GSTR-2A, and financial statements to demonstrate that no purchases were made from the alleged entries. These documents constitute primary evidence maintained in the normal course of business and cannot be disregarded without pointing out specific de....