ASSISTANT COMMISSIONER OF INCOME TAX, DELHI V. TECXPERT SOFTWARE PRIVATE LIMITED, DELHI

ITA 3079/DEL/2025

AI Insights

The case revolves around an appeal by the ACIT against Tecxpert Software Pvt. Ltd. concerning an addition of Rs.1,90,00,000 made by the Assessing Officer (AO) under the belief that the assessee received an accommodation entry from M/s MKD Construction Pvt. Ltd., a company identified as a sham by the DDIT(Inv). The AO's addition was based on the investigation report and subsequent reassessment proceedings. However, the CIT(A) found that the assessee had actually advanced the same amount to M/s MKD Construction Pvt. Ltd., contrary to the AO's conclusion. The Tribunal agreed with the CIT(A)'s decision, noting that the AO had not correctly interpreted the evidence and had relied on a borrowed satisfaction from the Investigation Wing's report without proper verification.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784881 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 08-05-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: RAVI PRATAP MALL
• Keywords: Capital asset; Reassessment proceedings; Reason to believe; Borrowed satisfaction; Bogus
• Section: 148; 142(1); 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘C’: NEW DELHI. BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No.3079/Del/2025 (Assessment Year: 2012-13) ACIT, vs. Tecxpert Software Pvt. Ltd., Delhi. D – 132, Surajmal Vihar, Delhi – 110 092. (PAN : AADCT0813E) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ravi Pratap Mall, Advocate REVENUE BY : Shri Om Prakash, Sr. DR Date of Hearing : 17.09.2025 Date of Order : 12.11.2025 ORDER PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. The assessee has filed appeal against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 04.03.2025for the Assessment Year 2012-13. 2. Brief facts of the case are, the AO received an information from DDIT(Inv) Unit-1(3), New Delhi vide letter dated 27.03.2019, wherein it was informed that in the case of M/s MKD Construction Pvt. Ltd., it has shown nominal sales/income as compared to the high volume of Printed from counselvise.com 2 ITA No.3079/Del/2025 cheques/cash transactions made in its bank account. It has also not shown any trade receivable, short term loans and advances, inventories, investment, capital assets or long term borrowing/short term borrowings in its Balance Sheet. He further noted that from the bank statement of M/s MKD Constructions Pvt Ltd, it revealed that transaction in the accounts is mostly in round/whole amount indicating that it might not be in regular business transaction. Therefore, M/s MKD Construction Pvt Ltd is a dummy/shell company. Based on the above information, the AO mostly relied on the findings of DDIT (Inv.) and inferred that M/s MKD Construction Pvt. Ltd. is dummy/sham company. From the list of inventories for the AY 2012-13, he observed that name of the assessee was appearing at Sl. No.3 wherein assessee has received accommodation entry to the extent of Rs.1,90,00,000/- from M/s MKD Construction Pvt. Ltd.. Accordingly, he issued notice u/s 148 of the Income-tax Act, 1961 (for short ‘the Act’) dated 31.03.2019 by recording the above reason to believe after getting prior approval from competent authorities. He also issued notice u/s 142(1) of the Act along with questionnaire therein assessee is directed to furnish financial statements and account details and various financial details. In response, assessee has submitted informations during assessment proceedings. Further AO issued specific notice u/s 142(1) to the assessee to furnish the detailed note of the Printed from counselvise.com 3 ITA No.3079/Del/2025 business activities of the assessee company and also state the business transactions/purposes with M/s MKD Construction Pvt. Ltd. as reflected in assessee’s Balance Sheet, complete party-wise details along with address and other communication details and various Individual Transaction Statement (ITS). Since assessee has filed certain informations and asked for adjournments, the AO observed at para 9 of the assessment order that assessee is intentionally, willfully and deliberately avoiding filing of required details by way of seeking adjournment without mentioning any specific reason for non-submission of details particularly latest postal orders of M/s MKD Construction Pvt. Ltd. with whom it has entered into financial transactions by way of receiving financials/loans reflecting in its audited Balance Sheet. Based on the above informations, he proceeded to make addition of Rs.1,90,00,000/- with observation that assessee has taken accommodation entry in form of purchase/investment/advance to a company which has no worth to investment. 3. Aggrieved with the above order, assessee preferred an appeal before the NFAC, Delhi and filed detailed submissions. After considering the detailed submissions of the assessee, ld. CIT (A) observed that the AO has made the addition based on the investigation report that purchase/ investigation/advance from a company which has no worth to invest such Printed from counselvise.com 4 ITA No.3079/Del/2025 huge amount. Further AO has given a finding that assessee’s own money earned from the undisclosed source and clandestinely introduced in its business by way of accommodation entry. He observed that the assessee has submitted all the relevant information vide letter dated 13.08.2019 before the AO and with reference to Note 10 part of the tax audit report which deals with short term loans/advance, the assessee has advanced a loan or advance of Rs.1,90,00,000/- as on 31.03.2012 to M/s MKD Construction Pvt. Ltd. He observed that the AO has reopened the assessment on the basis that same amount of Rs.1,90,00,000/- was received by the assessee whereas the assessee has given the exact same amount as the advance to M/s MKD Construction Pvt. Ltd.. Since the AO himself has recorded that assessee has filed tax audit report before him and he extracted the relevant communications by the assessee with the AO at pages 39 to 45 of the impugned order and deleted the addition made by the AO with the following observations :- “6.1.10 The assessing officer in this case has added an amount of □ 1.9 crores as accommodation entry received by the appellant from M/s MKD Constructions Private Limited. During the assessment proceedings the appellant has submitted various details including tax audit report, income tax competition, details of all unsecured loans, share capital of the company, bank statements held by the appellant. The only issue to be decided in this case is whether the appellant was beneficiary of accommodation entry from M/s MKD Constructions Private Limited or not. Even in the reasons of reopening and also in the assessment order, it is very clear that assessing officer has assess this amount on the belief that the appellant has received J 1.9 crores from M/s MKD Constructions Private Limited into Vijaya bank account. The Vijaya bank account which was submitted by the appellant before the assessing officer and also which is submitted during the present proceedings, Printed from counselvise.com 5 ITA No.3079/Del/2025 on verification of the said bank accounts, there is a debit entry appearing in the name of M/s MKD Constructions Private Limited. It is pertinent here to note that in tax audit report, in note 10 part of the report which deals with short- term loans and advances, in M/s MKD Constructions Private Limited has been advanced a loan or advance of Rs. 1.9 crore at 31 March 2012 as against nil amount on 31 March 2011. Based on this document, assessing officer could have come to conclusion that the appellant has advanced the loan or advance to M/s MKD Constructions Private Limited and also as per the debit entry in the Bank statement. It is interesting to note that the exact amount of □ 1.9 crores has been advanced to M/s MKD Constructions Private Limited as against what was the basis of reopening by the assessing officer that on the belief that the said amount was received by the appellant company. 6.1.11 In view of the clear documentary evidence based on the bank statement and also details are available in the balance sheet and tax audit report which are also filed to the assessing officer during the assessment proceedings, the addition done 1.9 crore in the hands of the appellant as accommodation entry received from M/s MKD Constructions Private Limited is not correct. The addition made by the assessing officer on account of amount purportedly received from M/s MKD Constructions Private Limited is deleted. The grounds of appeal filed by the appellant hereby allowed.” 7. Aggrieved with the above order, Revenue is in appeal before us raising following ground of appeal :- “Whether on facts and circumstances of the case, the Ld. CIT (A) has erred in deleting the addition of Rs.1,90,00,000/- on account of unexplained money received from M/s. MKD Construction Pvt. Ltd. u/s 69 of the Act without considering the fact that the assessee has taken accommodation entry of Rs.1,90,00,000/-.” 8. At the time of hearing, ld. DR of the Revenue brought to our notice page 1 of the assessment order wherein AO has reproduced the detailed findings of the DDIT (Inv.) wherein it was found that M/s MKD Construction Pvt. Ltd. is a sham and bogus entity and made lot of bank transactions received and paid round about amounts and has declared only nominal income. It clearly indicates that M/s MKD Construction Printed from counselvise.com 6 ITA No.3079/Del/2025 Pvt. Ltd. is a sham company. Since assessee has dealt with the abovesaid company the transaction can only be treated as sham and he supported the findings of the AO. 9. On the other hand, ld. AR of the assessee brought to our notice page 46 of the impugned order and relied on the detailed findings of the ld. CIT(A). 10. Considered the rival submissions and material available on record. We observe that AO has received information from the Investigation Wing that M/s MKD Construction Pvt. Ltd. is an accommodation entry provider based on the investigation. The AO has borrowed the above findings of the Investigation Wing and observed that the assessee has dealt with certain transactions with M/s MKD Construction Pvt. Ltd. and without making proper verification, he has proceeded to record the reasons to reopen the assessment and also proceeded to complete the reassessment proceedings insisting on the assessee to supply the recent address and communication address of M/s MKD Construction Pvt. Ltd. even though the main purpose of reopening the assessment is only on the basis of investigation wing report on the same party. This itself shows that the AO has proceeded to reopen the assessment with the borrowed satisfaction. 11. Further we observe that as per the Balance Sheet and information supplied by the assessee to AO as well as to First Appellate Authority, it Printed from counselvise.com 7 ITA No.3079/Del/2025 clearly shows that assessee has advanced the alleged amount to M/s MKD Construction Pvt. Ltd. and not as per the conclusion of the AO that assessee has received loan/accommodation entry from them. The above facts were rightly appreciated by ld. CIT (A) and we observed that all the abovesaid information is already supplied before Assessing Officer, he has not appreciated the relevant information available on record, proceeded to make the addition with the wrong understanding of the facts that assessee had received loan/accommodation entry from M/s. MKD Construction Pvt. Ltd.. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A). 12. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on this 12th day of November, 2025. Sd/- sd/- (YOGESH KUMAR U.S.) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12.11.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "