DCIT, CR BUILDING V. GULSHAN POLYOLS LIMITED, LAXMI NAGAR

ITA 5549/DEL/2024

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax (OSD), Range-10, New Delhi against M/s. Gulshan Polyols Limited concerning the assessment year 2015-16. The primary issue was the addition of Rs. 1,17,35,487 as unexplained cash credit under section 68 of the Income Tax Act, 1961, which the Assessing Officer had added following a search operation. The CIT(A) reversed this addition, finding no evidence of such unaccounted sales, a decision which the Revenue challenged in the Tribunal. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal and the assessee's cross objection, which was supportive of the CIT(A)'s decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396998 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: MOHD. SHAHID
• Keywords: Unexplained cash credit; Principle of natural justice; Opportunity of cross examination; Bogus
• Section: 147; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.5549/Del/2024 Assessment Year: 2015-16 DCIT (OSD), Range-10, New Delhi Vs. M/s. Gulshan Polyols Limited, G-81, Preet Vihar, Anand Vihar S.O. Laxmi Nagar, East Delhi PAN: AABCG3954F (Appellant) (Respondent) With C.O. No. 46/Del/2025 [Arising out ITA No.5549/Del/2024] Assessment Year: 2015-16 M/s. Gulshan Polyols Limited, G-81, Preet Vihar, Anand Vihar S.O. Laxmi Nagar, East Delhi Vs. DCIT (OSD), Range-10, New Delhi PAN: AABCG3954F (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal (ITA No.5549/Del/2024) and assessee’s cross objection (C.O. No. 46/Del/2025) for assessment Assessee by Sh. Mohd. Shahid, CA Department by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of hearing 28.05.2025 Date of pronouncement 28.05.2025 ITA No.5549/Del/2024 & C.O. No. 46/Del/2025 2 | P a g e year 2015-16, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1068966016(1), dated 23.09.2024 involving proceedings under section 147 r.w.s. 144 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Heard both the parties. Case files perused. 3. Coming to the Revenue’s sole substantive ground seeking to revive section 68 unexplained cash credit addition of Rs. 1,17,35,487/- made by the Assessing Officer in his assessment framed on 18.05.2023, we note that the CIT(A) has reversed the same as under: “6.1. I carefully considered the submission of the appellant with reference to the impugned assessment order. Also perused and considered the details and documents uploaded by the appellant on ITBA portal during the appellant proceedings. Considered the case laws referred by the appellant. 6.2. During the appellate proceedings, the appellant has furnished a paper book comprising entire reply, details and documents filed by the appellant during the assessment proceedings. The appellant has filed copy of unit wise entire sale invoices (page no. 17 to 1113 of the paper book) alongwith sale registers demonstrating that no sale was made to the parties as mentioned in the statement of Sh. Ashok Kumar Gupta. Further, the appellant has also submitted copy of bank statements for all bank accounts maintained by it for the financial year under reference (page no. 1114 to 1119 of the paper book) demonstrating that no sale proceed has been received in the bank account of the appellant except actual sales made by it. The appellant has pointed out that the AO did not provide copy of material against the appellant found in the search proceedings. Further, the appellant has submitted the statement of Mr. Ashok Kumar Gupta has been ITA No.5549/Del/2024 & C.O. No. 46/Del/2025 3 | P a g e recorded behind the back of the appellant and therefore cannot be used against the assessee without cross examination of said allegation as it is against the process of natural justice. The appellant has argued strongly that the only basis of addition on account of alleged unaccounted sale is the statement given by Sh. Ashok Kumar Gupta, therefore, the appellant has right to cross examine the party but the AO did not allow the opportunity of cross examination. The appellant has referred various case laws having similar facts. 6.3. From the facts of the case it is clear that there is no documentary proof referred by the AO suggesting that the amount of Rs. 1,17,35,487/- was credited in the books of the appellant on account of alleged unaccounted sales. Further, the appellant has stated that section 68 is applicable only when any sum is found credited in the books of an assessee maintained for any previous year whereas the AO has not found the above cash credited in the any kind of books of account maintained by the appellant including its bank accounts. The AO has stated in the assessment order that the appellant company has made bogus sales to M/s Ridhi Sidhi Impex which is controlled by Sh. Ashok Kumar Gupta. After perusal of statement given by Sh. Ashok Kumar Gupta, it is noticed that M/s Ridhi Sidhi Impex maintained a bank account number 122002110621596 in Punjab National Bank wherein no payment received from M/s Ridhi Sidhi Impex through the above mentioned bank account number on account of alleged sales made by the appellant. From the copy of invoices of sales furnished by the appellant it is evident that no sale invoice has been issued by the appellant to M/s Ridhi Sidhi Impex. 6.4. It is evident from the assessment order that the AO has not made any effort to gather documentary evidences in support of the statement given by Sh. Ashok Kumar Gupta during the search operation. The AO is completely and mechanically dependent on the statement of Sh. Ashok Kumar Gupta for making the impugned addition on account of alleged accommodation entry obtained by the appellant by making fake sale to M/s Ridhi Sidhi Impex. The assessment order is absolutely silent about what other evidences were collected by the search party in support of the statement given by Sh. Ashok Kumar Gupta. 6.5 In view of the facts, I am of the considered opinion that a statement given by third party against the appellant cannot be sufficient basis to make such a huge addition. The AO has failed to bring any documentary evidence proving that alleged sale proceeds were credited in the books / bank account of the appellant. On the other hand, the appellant has proved by furnishing the copies of entire sale invoices and bank statements showing that no such sale proceeds have been credited in its books/bank account. In absence of any concrete evidence, I am not inclined to uphold the addition made by the AO. Hence, the AO is hereby directed to delete the addition of ITA No.5549/Del/2024 & C.O. No. 46/Del/2025 4 | P a g e Rs. 1,17, 35 487/- made by him u/s 68 of the Income Tax Act, 1961 on account of unaccounted sales. Accordingly, the ground no. 1 of the appeal is allowed.” 4. We have given our thoughtful consideration to the Revenue’s and assessee’s vehement respective stands against and in support of the CIT(A)’s above detailed lower appellate discussion deleting the impugned addition. We make it clear that the precise reason for the learned CIT(A)/NFAC to delete the impugned addition is that no such amount has been credited in the assessee’s books or otherwise; as the case may be, in the relevant previous year which could form subject matter of addition in its hands. This clinching factual finding has gone unrebutted from the Revenue side which could take us to a different conclusion than that recorded by the learned CIT(A). We thus conclude in this factual backdrop that there is no merit in the Revenue instant sole substantive ground which is hereby rejected in very terms. Ordered accordingly. 5. This Revenue’s appeal is dismissed. The instant assessee’s cross objection C.O. No. 46/Del/2025, being supportive, stands rendered infructuous. Dismissed accordingly. 6. To sum up, these Revenue’s appeal ITA No.5549/Del/2024 and assessee’s cross objection C.O. No. 46/Del/2025 are ITA No.5549/Del/2024 & C.O. No. 46/Del/2025 5 | P a g e dismissed. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 28th May, 2025 Sd/- (MANISH AGARWAL) Sd/- (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28th May, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "