ACIT, CC 32, NEW DELHI, JHANDEWALAN V. BETSY GROWTH FINANCE LTD, NEW DELHI

ITA 1031/DEL/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals)-29, New Delhi, which had deleted the additions made by the Assessing Officer (AO) under section 147 of the Income Tax Act, 1961, for the Assessment Year 2013-14. The AO had made additions to the income of Betsy Growth Finance Ltd., alleging that the company had received accommodation entries and had paid unaccounted commission. The CIT(A) found that the AO had not conducted a proper inquiry and that the additions were not substantiated by any tangible evidence. The Revenue's appeal contested the CIT(A)'s findings, but the Tribunal upheld the CIT(A)'s decision, agreeing that the additions were not supported by sufficient evidence.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840209 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 22-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Keywords: Corroborative evidences; Accommodation entries; Share purchase agreement; Tangible material; Bogus
• Section: 147; 148; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER ITA No.1031/DEL/2025 [Assessment Year: 2013-14] ACIT, Central Circle-32, Room No.359, 3rd Floor, ARA Centre, Jhandewalan, Delhi-110055 Vs Betsy Growth Finance Ltd., Shop No.5, A-32/33, Ground Floor, Raju Park, Bali Pehlwan Apartment, Devali Road, Delhi-110062 PAN-AAACB3524B Appellant Respondent Assessee by None Revenue by Ms. Ankush Kalra, Sr. DR Date of Hearing 05.01.2026 Date of Pronouncement 27.02.2026 ORDER PER AMITABH SHUKLA, AM, This appeal filed by the Revenue is against order dated 27.11.2024 of learned Commissioner of Income Tax(Appeals)-29, New Delhi, [hereinafter referred to as ‘ld. CIT(A)] arising out of assessment order dated 26.03.2022 passed u/s 147 of the Income Tax Act, 1961 pertaining to Assessment Year 2013-14. The word ‘Act’ herein this order would mean Income Tax Act, 1961. 2. The Revenue has raised following grounds of appeal:- Printed from counselvise.com ITA No.1031/Del/2025 Page 2 of 6 (i) Whether on the facts & in the circumstances of the case, the Ld. CIT(A) erred in law & on facts in not appreciating the fact that enquiry was made by the A subsequent to receipt of information from INSIGHT portal from the assessee to verify whether the transactions undertaken by the assessee were genuine or not. (ii) Whether on the facts & in the circumstances of the case, the Ld. CIT(A) erred in law & on facts in not appreciating the fact that there is reference made by the AO as to how the assessee was linked to Sh. Himanshu Verma. (iii) Whether on the facts & in the circumstances of the case, the Ld. CIT(A) erred in law & on facts in not appreciating the fact that the addition made by the AO is supported with evidences to conclude that the assessee has taken accommodation entries and the transaction was not genuine. (iv) Whether on the facts & in the circumstances of the case, the Ld. CIT(A) erred in law & on facts in not appreciating the fact that the addition made by the AO on account of Commission paid is not without basis or justification. 3. The assessee was called absent in the case. 4. The Ld. DR took us through the brief factual matrix of the case. The Ld.CIT(A) through his order dated 27.11.2024 deleted the addition made by the Ld. AO qua the merits of the addition. The Ld. DR argued in favour of the order of AO. It was contended that the order has been made after carefully considering the varied facts of this case in the light of material available on records. 5. We have considered the arguments of the Ld. DR in the light of material available on records. We have examined the order of Ld. First Appellate Authority and are of the considered view that the order passed by the Ld. Printed from counselvise.com ITA No.1031/Del/2025 Page 3 of 6 CIT(A) 27.11.2024 which has been assailed by the Revenue, has been passed after carefully considering the facts of the case and correct interpretation of law. We have noted that the ld. CIT(A) has while according relief to the assessee made following observations:- “….6. Ground Nos. 1 to 5: The brief facts of this case are that the case was re- opened u/s 147 of the Act on the basis of information received on the Insight Portal that the appellant had taken accommodation entry from an entry provider Sh. Himanshu Verma. In the assessment order, AO has reproduced the information available on Insight Portal. An addition at Rs. 7 er. was made u/s 68 of the Act on the basis of the above information. An expenditure @2% as commission was also added to the income by the AO. 6.1 In the grounds of appeal under reference, appellant has contested that the assumption of jurisdiction u/s 147 is bad in law as the reasons to believe and the approval of higher authorities were never furnished to the appellant. No opportunity was granted to the appellant to peruse the reasons to believe and submit its objections thereon. Appellant has also contested strongly that the copy of material including copy of statement of Sh. Himanshu Verma which were relied upon by the AO were not provided to the appellant for confrontation. The submission of appellant is that the addition was made solely on the basis of information on Insight Portal without conducting any enquiry and without producing any cogent evidence that the amounts received were accommodation entries. 6.1.1 During the appellate proceedings, appellant has reproduced a copy of letters addressed to the AO requesting him to provide a copy of reasons recorded on the basis of which the case has been re-opened u/s 147 of the Act. However, a copy of reasons to believe alongwith the tangible materials were not provided by the AO to the appellant. Another grievance of the appellant is that notice u/s 143(2) dated 21.03.2022 was issued by the AO along with show cause notice which was required to be responded within a very short period of 3 days i.e. by 24.03.2022. The aforesaid notice u/s 143(2) and show cause notice did not contain any documents, except one annexure wherein it was alleged that the appellant had taken accommodation entries aggregating to Rs. 3,00,00,000/- from M/s Abhimaan Industries Pyt. Ltd. on various dates during the year. Further the show cause also did not contain any reasons or finding but only contain one para which is reproduced below:- \"Please Show Cause as to why the addition of Rs. 3,00,00,000/ should not be made, as per reason provided to you, as you have failed to furnish the particulars in this regard.\" 6.1.2 No other details, reasoning, finding, documents or tangible material was provided as contested by the appellant, based on which the said transaction was alleged to be of the nature of accommodation entries. Appellant has contested that the allegation in the said show cause notice was totally wrong as the appellant had not entered into any transaction of loan, share capital, share application, capital gain etc. with the above-mentioned party but sold 60,000 equity shares of Rs. 10/- each of Ujiwal Microfinance Pvt. Ltd. to the above-mentioned party for a total Printed from counselvise.com ITA No.1031/Del/2025 Page 4 of 6 consideration of Rs. 3,00,00,000/-, which were acquired by it in the carlier years and disclosed in the financial statements and TR. The appellant submitted copy of Sale Bill of shares and confirmation from M/s Abhimaan Industries Pvt. Ltd. along with PAN to prove the genuineness of the transaction. It was further stated that the said transaction was entered into in the normal course of the business and the appellant had delivered the share certificates along with duly signed transfer deeds at the time of its sale to the above-mentioned party and these shares were also transferred in the name of the above-mentioned parties in the records of M/s Ujjwal Microfinance Pvt. Ltd. The transactions of the sale were backed by the delivery and the same was also disclosed in the audited financial statements and income tax return by the appellant. It was further requested that if the AO was in possession of any such evidence the same may kindly be provided to the appellant for confrontation before taking any adverse view on this matter. It was also requested that if the said allegation was based on the Statement of any person, copy of the same should also be provided to the appellant. The AO considered the aforesaid reply and documents and stated in its order that replies/details/documents/information furnished by the appellant vide reply dated 24.03.2022 were carefully examined, considered and found to be in order. However, A rejected the explanation/documents/ evidences submitted by the appellant by just stating that Sh. Himanshu Verma was found to be engaged in the business of providing accommodation entries by the Investigation Wings and passed order u/s 147 by making addition of Rs. 3,00,00,000/- and of Rs. 4,00,00,000/- u/s 68 of the Act alleging that the appellant had received accommodation entries from M/s Abhimaan Industries Pvt. Ltd., M/s Green Power Marketing and Advertisement Pvt. Ltd. and also added Rs. 14,00,000/- of alleged commission paid to the entry operator. At the time of issue of notice u/s 148 and show cause notice dated 21.03.2022, the information with regards of the transactions of Rs. 3,00,000,000/- with M/s Abhimaan Industries Pvt. Ltd. was only available on the portal and based on which the show cause notice was issued wherein the aforesaid transactions were only mentioned. The alleged transactions of Rs. 4,00,00,000/- entered with M/s Green Power Marketing and Advertisement Pvt, Ltd. came into the knowledge of AO after issue of show cause notice only. The AO had not made any enquiry before the issue of notice 148. Further the AO had also not made any enquiry or collected any evidence to substantiate the allegation that the appellant had taken accommodation entries of Rs. 3,00,00,000/ - from M/s Abhimaan Industries Pvt. Ltd. and of Rs. 4,00,00,000/- from M/s Green Power Marketing and Advertisement Pvt. Ltd. 6.2 I have perused the above submissions of the appellant and the assessment order. It is seen that the AO had made reference to information available on Insight Portal which has also been reproduced by it in the assessment order. AO has mentioned in the assessment order that a show cause notice dated 21.03.2022 was issued, in response to which appellant had furnished its reply dated 24.08.2022 alongwith the details which were considered and found to be in order. However, subsequently he makes the following observations: In response to the same, the assessee has furnished its reply on 24.03.2022 vide its reply. the assessee has furnished the details/ documents/information, which were carefully examined. considered and found to be in order. The details/response furnished by the assessee company has been examined and considered but not acceptable: In this connection, it is submitted that a Search operation u/s 132(4) of Income Tax Act, 1961, was Printed from counselvise.com ITA No.1031/Del/2025 Page 5 of 6 conducted on 13.04.2017 on Sh. Himanshu Yerma Group, during the search and post search proceedings followed by centralized search proceedings it is found that Sh. Himanshu Verma was indulged in providing bogus accommodation entries through various shell companies operated or controlled by him or dummy directors. Sh. Himanshu Verma has been managing and controlling a number of companies/ firs sole proprietorship concerns and a number of bank accounts in the name of these entities. in different banks. All the entities mange and controlled by Sh. Himanshu Verma were paper entities. The sole purpose of all the entities manage and controlled by Sh. Himanshu Verma was to provide accommodation entries to various outside entities/ persons. There was no actual business activities in any of the entity manage and controlled by Himanshu Verma. Sh. Himanshu Verma was doing business of providing bogus accommodation entries in the shape of share application money, capital gain on shares, expenditure entries in lieu of certain commission charged from the beneficiary parties and to convert the unaccounted black money into white. Sh. Himanshu Verma is managing and controlling a number of paper companies, firms and sole proprietary concerns. The entities manage and controlled by Sh. Himanshu Verma are not doing any actual business activities. He is also managing a number of bank accounts in the name of these paper companies, firms and sole proprietorship concerns in different banks. The assessee has obtained accommodation entry of Rs. 7.00.00.000/- and for obtaining the entry the assessee has incurred expenditure @2% as commission paid to entry operator. The amount works out to Rs. 14.00.000/- which has been paid by the assessee out of books and the same is added to the income of the assessee. (Addition Rs. 14.00,000(-). With the above remarks total income of the assessee Company is computed as under: 6.3 However, no further details are provided in the assessment order as how the entities with which the appellant had transacted were related to the entry operator Sh. Himanshu Verma. No evidences, seized materials, findings and observations during the course of search or even statements of Sh. Himanshu Verma or the Directors of concerns, M/s Abhimaan Industries Pvt. Ltd. and M/s Green Power Marketing and Advertisement Pvt. Ltd. find place in the assessment order. There is no reference whatsoever by the AO as to how the concerns under reference were linked to Sh. Himanshu Verma. It also appears that no enquiry whatsoever was made by the AO subsequent to receipt of information from Insight Portal from the concerns under reference to verify whether the transactions undertaken by the appellant were genuine or not. Appellant has on the hand contested that the requisite details were provided before the A which has also been noted by the AO and found to be satisfactory. Appellant has also contested that several requests were made to the AO to provide any such evidence forming basis for adverse view in the matter for confrontation and clarification. I find that such details are even not made a part of the assessment order to create prima facie evidence that appellant had taken accommodation entry from the Sh. Himanshu Verma. Under those circumstances, I find that the addition made by AO is not supported with any evidences to conclude that the appellant had taken accommodation entries from the two concerns under reference and the transaction was not a genuine transaction. The addition was made by AO without any basic supporting evidences Printed from counselvise.com ITA No.1031/Del/2025 Page 6 of 6 to even frame a prima facie linkage of the two concerns with Sh. Himanshu Verma and is therefore not sustainable on merits, Similarly, the addition made by AO on account of alleged commission @ 2% paid to Sh. Himanshu Verma is without any basis or justification and is also consequential to the addition made on account of accommodation entry. Under these circumstances, the additions made by AO are directed to be deleted. 7. In the result, the appeal of the appellant is hereby allowed.…..” 6. Upon consideration of the above, we are of the considered view that the conclusions drawn by the ld. CIT(A) is based upon correct understanding of the facts of the case and therefore does not require any intervention at this stage. The order of the ld. CIT(A) is confirmed and the appeal raised by the Revenue is therefore dismissed. 7. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 27th February, 2026. Sd/- Sd/- [SATBEER SINGH GODARA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27.02.2026 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, Printed from counselvise.com "