DCIT, JHANDEWALAN EXTENTION V. JAY ENN INFOTECH PVT. LTD., DELHI

ITA 2541/DEL/2023

AI Insights

The case involves the Revenue's appeal against the order of the Commissioner of Income Tax (Appeals)-29, New Delhi, which had deleted protective and substantive additions made to Jay Enn Infotech Pvt. Ltd. concerning commission earned from providing accommodation entries. The Tribunal referenced a similar case (ITA No.196/Del/2022) where it was directed that the CIT(A) must ensure that the ultimate beneficiaries of the entries have been assessed and the tax realized on such entries. The Tribunal found that the CIT(A) had not adequately addressed this crucial aspect and thus remanded the case for a fresh adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471790 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Other Referred Cases: ITA No.196/Del/2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Keywords: Set aside; Opportunity of being heard; Accommodation entries; Bogus
• Section: 68; 153C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘C’: NEW DELHI) BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No:- 2541/Del/2023 (Assessment Year- 2012-13) DCIT, Jhandewalan Extention, Delhi. Vs. Jay Enn Infotech Pvt. Ltd., Delhi. PAN No: AAACJ9991N APPELLANT RESPONDENT Revenue by : Shri Dayainder Singh Sidhu, CIT(DR) Assessee by : None Date of Hearing : 04.03.2025 Date of Pronouncement : 05.03.2025 ORDER PER AMITABH SHUKLA, AM: This appeal by Revenue is directed against the order of Commissioner of Income Tax (Appeals)-29, New Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 30.06.2023 for Assessment Year 2012-13. 2. The only issue contested by the Revenue through its grounds of appeal is regarding the action of Ld. CIT(A) deleting protective and substantive addition made in the hands of the assesse company on ITA No.-2541/Del/2023 Jay Enn Infotech Pvt. Ltd. Page 2 of 5 account of commission earned by providing accommodation entries. At the outset, Ld. DR invited our attention to the order of this Tribunal in ITA No.196/Del/2022, wherein, on identical facts the Hon’ble Co-ordinate Bench had set aside the order of the Ld. CIT(A), directing him to re-adjudicate the appeal de novo. The Ld. Counsel for the assesse vehemently argued in favour of the correctness of the decision of Ld. CIT(A). 3. We have heard rival submission, in the light of material available on record. We have noted the order of this Tribunal in ITA No.196/Del/2022, wherein Hon’ble Co-ordinate Bench has observed as under: “… 11. We have heard carefully the rival submissions in the group of bunch of appeals. As it emerges from the record the additions have been made under s. 68 by the AO in the assessment order passed under s. 153C on protective basis on the premise that the respondent-companies herein above are conduit companies and merely a entry providers. The Ld. CIT(A) has granted relief to the assessee on the premise that the additions under s. 68 in the hands of the respondent company are not sustainable on the ground that in the absence of ownership of the entries giving rise to the additions, the additions cannot be countenanced. Likewise commission income held to be chargeable in the hands of the assessee company by the AO is also not sustainable since the commission income hasalready been assessed in the hands of Shri Anand Kumar Jain & Shri Naresh Kumar Jain who are stated to be controlling the respondent companies. 12. On perusal of first appellate order and the assessment order, it clearly emerges that additions in question arises from entries which have landed up in the bank account in the respective respondent assessee. This being so, the onus is always on the assessee to discharge the burden placed under s. 68 of the Act. ITA No.-2541/Del/2023 Jay Enn Infotech Pvt. Ltd. Page 3 of 5 While returning the finding by the Ld. CIT(A) that the ownership of the entries do not belong to the assessee, it was incumbent upon the Ld. CIT(A) to satisfy himself that the ultimate so-called beneficiaries have been assessed on substantive basis and the tax has been realized on such bogus entries. The Ld. CIT(A) has dealt with the issue without consideration of this vital fact. The onus lays on the assessee companies to establish that entries routed through the bank account of such companies are not owned by them. The corporate veil cannot be lifted cursorily. The onus has not been discharged by the assessee at all. In the absence of any finding on the taxability of entries in the hands of beneficiaries, we are not in a position to either sustain the action of the Ld.CIT(A) or dislodge the action of the Ld. CIT(A). It will thus equitable to restore the appeal to the file of the Ld. CIT(A) for adjudication afresh in accordance with law. It shall be open to the assessee to place arguments and adduce evidences as may be considered expedient to defend the stand of the assessee on the subject matter of dispute…” 4. We have noted that the facts of the controversy at hand are identical to the matters decided by the Hon’ble Coordinate Bench of this Tribunal (supra). The Ld. Counsel for the assessee could not make out a case for any distinguishment of the facts of the cases. Accordingly, in respectful compliance to the decision (supra), as well as for the purposes of consistency, we set aside the order of CIT(A) and direct him for fresh adjudication, in accordance with law and after giving due opportunity of being heard to the assesse. All the grounds of raised by the Revenue are allowed for statistical purposes. ITA No.-2541/Del/2023 Jay Enn Infotech Pvt. Ltd. Page 4 of 5 5. In the result, appeal of the Revenue is allowed for statistical purposes. Order pronounced in the Open Court on 5.03.2025 Sd/- Sd/- (ANUBHAV SHARMA) (AMITABH SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 05/03/2025. Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA No.-2541/Del/2023 Jay Enn Infotech Pvt. Ltd. Page 5 of 5 1. Date of dictation of Tribunal order 5.3.25 Direct 2. Date on which the typed draft Tribunal Order is placed before the Dictating Member 5.3.25 3. Date on which the typed draft Tribunal order is placed before the other Member 4. Date on which the approved draft Tribunal order comes to the Sr. PS/PS 5. Date on which the fair Tribunal order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr.PS/PS 7. Date on which the final Tribunal order is uploaded by the Sr.PS/PS on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal order 9 Date of killing off the disposed of files on the judisis Portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the order "