ANKIT METAL & POWER LTD.,KOLKATA V. ACIT, CEN. CIR. 3(2), KOLKATA

ITA 796/KOL/2024

AI Insights

The case involves Ankit Metal & Power Ltd, which was subjected to reassessment proceedings under section 147 of the Income-tax Act, 1961, following information from search and seizure operations related to Sanjeev Kejriwal and his group entities. These operations revealed that certain entities controlled by Kejriwal were involved in providing bogus entries for financial transactions. The Assessing Officer (AO) found that Ankit Metal & Power Ltd had taken accommodation entries amounting to Rs.14,78,903 from these entities and issued a notice under section 148. The CIT(A) dismissed the initial appeal ex parte due to the non-appearance of the assessee, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714722 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Reassessment proceedings; Corroborative evidences; Unexplained cash credit; Principle of natural justice; Search and seizure; Accommodation entries; Bogus
• Section: 147; 148; 143(3); 142(1); 132; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘A” BENCH KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member I.T.A. No.796/Kol/2024 Assessment Year: 2015-16 Ankit Metal & Power Ltd………..……..…………………....Appellant 35, Chittaranjan Avenue, Kol-12. [PAN: AAECA5230B] vs. ACIT, Central Circle-3(2), Kolkata…..…..………………….…..... Respondent Appearances by: None appeared on behalf of the appellant. Shri Raja Sengupta, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 22, 2025 Date of pronouncing the order : August 05, 2025 आदेश / ORDER Per Sonjoy Sarma, Judicial Member: This appeal by the assessee is directed against the order dated 09.01.2024 passed by the CIT(A)-21, Kolkata [in short CIT(A)] under section 250 of the Income-tax Act, 1961. 2. Brief facts of the case are that the assessee was subjected to reassessment proceedings under section 147 of the Income-tax Act, 1961 (\"the Act\") pursuant to information gathered during search and seizure operations conducted under section 132 of the Act in the case of one Sanjeev Kejriwal and his group entities. During the course of such proceedings, it was revealed that Mr. Kejriwal was engaged in providing accommodation entries through various concerns including: M/s Rajputana General Commercial Corporation Pvt. Ltd., M/s Arvind Trading Company, and M/s Shri Krishna Trading Company. In his sworn statement, Mr. Kejriwal admitted that these entities were non- Printed from counselvise.com I.T.A. No.796/Kol/2024 Ankit Metal & Power Ltd 2 genuine concerns under his control and were engaged solely in issuing bogus entries for commission ranging from 0.25% to 0.5%. The assessing authority examined the bank statements and other records of these concerns and concluded that no real business was being carried out by them. Based on the financial analysis, the AO observed that during the Financial Year 2014-15 (relevant to A.Y. 2015-16), the assessee, M/s Ankit Metal & Power Ltd., had taken accommodation entries to the extent of Rs.14,78,903 from the above-mentioned group companies. Further, based on suspicious bogus billing transactions involving other entities like M/s Rani Sati Metal Industries, M/S Rani Sati Industries Ltd., and M/S TIF Casting Ltd. amounting to Rs.1,10,00,000/- notice under section 148 was issued to the assessee. Subsequently, notices under sections 143(2) and 142(1) were issued, seeking explanation and supporting evidence regarding the source and nature of the alleged credits. The assessee submitted certain replies but raised preliminary objections against reopening under section 147 without providing substantive documentary evidence to support its contentions. The Assessing Officer, not being satisfied with the explanation, treated Rs.1,24,78,903 (Rs.14,78,903 + Rs.1,10,00,000) as unexplained cash credit under section 68 and passed the assessment order under section 143(3) read with section 147 of the Act, determining the total income at Rs.1,60,11,87,083. 3. Aggrieved by the above, the assessee filed an appeal before the ld. CIT(A). However, despite notices issued on seven consecutive occasions, the assessee failed to represent the case. Consequently, the CIT(A) dismissed the appeal ex parte, confirming the order of the Assessing Officer. Printed from counselvise.com I.T.A. No.796/Kol/2024 Ankit Metal & Power Ltd 3 4. Dissatisfied with the above order the assessee is now in appeal before the Tribunal, raising multiple grounds including the validity of reassessment proceedings and merits of addition. At the time of hearing, despite issuance of notices, no one appeared on behalf of the assessee. However, it is seen from the record that the assessee had filed Form 36 along with Vakalatnama containing the name set of advocates were mentioned as authorised representative. Nevertheless, on repeated calls, no one appeared. 5. On the other hand, the learned DR submitted that since the assessee had consistently failed to comply with notices before the ld. CIT(A) and has also remained unrepresented before the Tribunal, the appeal deserves to be dismissed. 6. We have heard the learned DR and carefully gone through the records. It is evident that the ld. CIT(A) passed an ex parte order due to the assessee's non-appearance. However, considering the large quantum of addition and the principle of natural justice, we are of the view that the assessee deserves one final opportunity to substantiate its case before the ld. CIT(A). In terms of the above the impugned order of the ld. CIT(A) is hereby set aside, and the matter is restored to the file of the ld. CIT(A) with a direction to decide the appeal afresh after giving adequate opportunity to the assessee to present its case. The assessee is also directed to ensure compliance with the notices issued by the CIT(A) and cooperate with the proceedings without fail. We also observe that there is a delay of 37 days in filing the present appeal before the Tribunal. The assessee has filed a condonation petition, which we have considered. In the interest of justice, the delay of 37 days in filing the appeal is condoned. Printed from counselvise.com I.T.A. No.796/Kol/2024 Ankit Metal & Power Ltd 4 7. In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 5th August, 2025. Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 05.08.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "