APPROVA EXPORT PVT. LTD.,KOLKATA V. .I.T.O.,WARD-2(2), KOLKATA

ITA 678/KOL/2019

AI Insights

The case involves Approva Export Pvt. Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals)-10, Kolkata, confirming an addition of \\u20b960 lacs to the assessee's income under section 68 of the Income Tax Act. The AO had initially added this amount, suspecting it to be from bogus accommodation entries used for laundering black money. The CIT (A) upheld this addition, referencing decisions in CIT vs. Durga Prasad More and Sumit Dayal Vs. CIT. However, the Tribunal found inconsistencies in the findings of the AO and the CIT (A), particularly regarding the nature of the entries and the basis for the full addition of the amount to the income. Consequently, the Tribunal set aside the matter for a de novo adjudication by the AO.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25050 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC), Sumit Dayal Vs. CIT (1995) 80 Taxman 89 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRABHAKAR PRAKASH RANJAN
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Set aside; Accommodation entries; Bogus
• Section: 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.678/KOL/2019 (Assessment Year: 2012-13) Approva Export Pvt. Ltd. 2, Ganesh Chandra Avenue, 2 nd Floor, Room No.5, Kolkata-700013, West Bengal Vs. ITO, Ward 2(2) Aaykar Bhavan, P-7, Chowringhee, Kolkata-700069 (Appellant) (Respondent) PAN No. AAGCA3489A Assessee by : Shri Miraj D. Shah, AR Revenue by : Shri Prabhakar Prakash Ranjan, DR Date of hearing: 04.12.2024 Date of pronouncement : 16.12.2024 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals)-10, Kolkata (hereinafter referred to as the “Ld. CIT(A)”] dated 28.02.2019 for the AY 2012-13. 02. The only issue raised by the assessee against the confirmation of addition of ₹60 lacs by the ld. CIT (A) as made u/s 68 of the Act by the ld. AO. 03. The ld AR at the outset submitted that the AO in last para at page no.1 of the assessment order stated that the assessee is engaged in bogus /accommodation entries provider and also layering for transfer of black money to beneficiary companies. Similar on page no.3 of the assessment order , the ld. AO again noted that the Page | 2 ITA No.678/KOL/2019 Approva Export Pvt. Ltd; A.Y. 2012-13 assessee is engaged in providing accommodation entries to various beneficiaries and on page no.4 again the ld. AO vide letter dated 05.03.2015, asked to explain the source of money and stated that no reply was received and thereafter again noted that assessee is providing bogus accommodation entries, however, finally the ld. AO added the entire amount of ₹60 lacs to total income of the assessee. The ld. AR stated that in view of the findings given by the ld. AO the entire amount cannot be added to the income of the assessee and only some reasonable percentage towards commission has to be applied. Similarly, the ld. CIT (A) after following the decision CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC), and Sumit Dayal Vs. CIT (1995) 80 Taxman 89 (SC), affirmed he order passed by the ld. AO thereby confirming the addition made. The ld. AR therefore, submitted that in view of the conflicting findings given by the AO as well as CIT (A), the issue may be set aside to the file of the lower authorities for denovo adjudication. 04. The ld. DR relied on the order of lower authorities. 05. After herring the rival contentions and perusing the materials available on record, we find that the ld. AO in the assessment order at several places given finding that the assessee is a accommodation entry provider thereby converting the black money into white money and passing on to various beneficiaries and entities. However, the addition made was in contraction to the conclusion drawn by the AO in the assessment order. Similarly the ld. CIT (A) affirmed the order by relying various case laws which is again in contraction to the finding given by the ld. AO that the assessee is an accommodation entry provider. Considering these facts and circumstances, in our opinion it would be reasonable to restore the appeal to the file of the ld. AO for Page | 3 ITA No.678/KOL/2019 Approva Export Pvt. Ltd; A.Y. 2012-13 fresh adjudication after examination and verification of the issues and adjudicating accordingly after offering reasonable opportunity of hearing to the assessee. We also simultaneously direct the assessee to co-operate in the set aside assessment proceedings. The appeal of the assessee is allowed for statistical purposes. 06. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 16.12.2024. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 16.12.2024 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "