The case ITA 1585/DEL/2020 was filed by Prem Chand Jain, New Delhi against ITO WARD – 63(2), New Delhi concerning the assessment year 2007-08. The appeal arises out of the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)]-18, New Delhi, dated 31/08/2020, which confirmed the reassessment order made by the Assessing Officer (AO) under section 143(3) of the Income Tax Act, 1961.
The appellant, Prem Chand Jain, initially filed a return of income on 29/10/2007 declaring nil income, which was processed under section 143(1) of the Act. The reassessment was initiated based on information received from the Chief Commissioner of Income Tax, Delhi-I, regarding accommodation entries provided by certain parties, leading to the issuance of a notice under section 148 of the Act.
On examining the details, the AO noticed that the appellant had taken accommodation entries amounting to Rs. 37,00,928/- from parties like M/s Sh. Bankey Bihari Trading Co. and M/s Om Agencies. The AO added this amount under section 69C of the Act, considering it as unexplained expenditure. The CIT(A) upheld this addition, leading to the current appeal.
The appellant raised several grounds of appeal, including:
The tribunal, comprising Sh. N. K. Billaiya (Accountant Member), heard the appeal through video conferencing. The appellant was represented by Sh. Salil Aggarwal and Sh. Shailesh Gupta, Advocates, while the respondent was represented by Sh. Vipul Kashyap, Senior Departmental Representative (DR).
The tribunal considered the arguments from both sides, the case record, and relevant decisions. It noted that the reassessment was initiated based on information about accommodation entries, and the AO added Rs. 37,00,928/- to the appellant’s income under section 69C of the Act. The CIT(A) upheld this addition.
During the hearing, the appellant’s counsel argued that the reassessment was based on insufficient evidence and that the additions made were unjustified. They referred to several decisions of coordinate benches on similar facts, where reassessment orders were quashed.
The DR supported the findings of the lower authorities and argued that the reassessment and additions were justified.
The tribunal gave thoughtful consideration to the orders of the lower authorities and reviewed the decisions of coordinate benches. It found that the reassessment was not based on proper jurisdiction and the additions made under section 69C had no strong foundation. Consequently, the tribunal quashed the reassessment order and allowed the appeal filed by the appellant.
In light of the foregoing, the appeal under ITA No. 1585/DEL/2020 was allowed. This order was pronounced in the open court on 30/09/2021.
This order was pronounced in the open court on 30/09/2021, in the presence of representatives of both sides.
Signed:
(N. K. BILLAIYA)
ACCOUNTANT MEMBER
Dated: 30/09/2021
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