INCOME TAX OFFICER WARD 10-3, NEW DELHI, NEW DELHI V. GRAPE MARKETING PVT LTD, DELHI

ITA 3555/DEL/2023

AI Insights

The case involves an appeal by the Income Tax Officer (ITO) against Grape Marketing Pvt Ltd concerning the assessment year 2012-13. The Revenue challenged the order of the CIT(A), which had deleted the additions made by the Assessing Officer based on alleged bogus purchases from entities controlled by entry operators. The Revenue argued that the CIT(A) ignored crucial evidence from investigations indicating that the assessee received substantial accommodation entries. The Tribunal found that the CIT(A) erred by not calling for a remand report from the AO and not verifying the facts adequately, especially given the admission of providing accommodation entries by one of the involved parties under oath.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784015 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 08-12-2023
• Other Referred Cases: Bharat Krishi Kendra v. Union Of India [2022] 136 taxmann.com 245 (Chhattisgarh), CIT vs. Odeon Builders Pvt. Ltd. (2019) 418 ITR 315(SC), CIT vs. Fair Finvest Ltd. (2013) 357 ITR 146 (Del), Pr. CIT v. Laxman Industrial Resources Ltd., [2017] 397 ITR 106 (Del), CIT v.Vrindavan Farms (P) Ltd, ITA 71/2015, ITA 72/2015, ITA 84/2015 (del), CIT Vs M/s Rakam Money Matters Pvt. Ltd. [ITA No. 778 of 2015 Dated 13-10-2015] (del), PCIT vs. Softline Creations Pvt. Ltd (2016) 387 ITR 636 (Del), Vedic Foundation Private Limited vs. ITO, ITA 9170/Del/2019, dated 25.01.2024, ITO vs. M/s. Canton Software Pvt. Ltd. ITA No. 4776/Del/2017, CO No. 230/Del/2017
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: VS. ODEON BUILDERS PVT. LTD. ITR SC; RANO JAIN
• Keywords: Reassessment proceedings; Unexplained cash credit; Bogus purchase; Accommodation entries; Bogus
• Section: 148; 131; 133(6)

Judgement Text

"Page 1 of 9 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3555/DEL/2023 [A.Y. 2012-13] The I.T.O Vs. Grape Marketing Pvt Ltd Ward – 10(3) H-22, Khasra No. 38/4, New Delhi Shive Vihar, Shabad, Daulatpur, Delhi PAN – AAACG 3149 D (Applicant) (Respondent) Assessee By : Ms. Rano Jain, Adv Ms. Mansi Jain, CA Department By : Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing : 09.09.2025 Date of Pronouncement : 12.11.2025 ORDER PER NAVEEN CHANDRA, A.M:- This appeal by the Revenue is preferred against the order of the NFAC/ CIT(A), Delhi dated 17.10.2023 for A.Y 2012-13. 2. The grounds of appeal of Revenue is as follows: 1. The order of Ld.CIT(A) is not correct in law and on facts. Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 2 of 9 2. On the facts and circumstances of the case, the Ld.CIT(A) has ignored the facts that during the investigation carried out by DDIT(Inv.), Unit -5(1), New Delhi in the case of Shri Jitendra Kumar (Prop. Kumar Sale), it was found that M/s Grape Marketing Pvt. is one of the beneficiary who had received accommodation entries to tune of Rs. 1,64,94,841/- from M/s /- Usha Trading During F.Y. 2011-12 relevant to A. Y. 2012-13, 3. On the facts and circumstances of the case, the Ld.CIT(A) has ignored the facts that during the investigation carried out by DDIT(Inv.), Unit-1(2), Kolkata in the case of Shri Abhishek Shrivastava, it was found that M/s Grape Marketing Pvt. Ltd is one of the beneficiary who had received accommodation entries to tune of Rs. 61,31,521/-, During F.Y. 2011-12 relevant to A.Y.2012-13 from bogus entity i.e. M/s Kumar Sales. 4. On the facts and circumstances of the case, the Ld.CIT(A) has ignored the facts that during the enquiry Shri Jitendra Kumar had accepted and given Oath statement and accepted that he was not doing any business activities except engaging in the business for providing accommodation entry through the entities controlled by hirn. 5. On the facts and circumstances of the case, the Ld.CIT(A) has ignored the facts that during the assessment proceedings, neither the assessee nor the proprietor of the parties i.e. M/s Kumar Sales and M/s Usha Trading were present before the Assessing Officer for recording of statement 6. On the facts and circumstances of the case, the Ld.CIT(A) had not called any remand report in this regard, so that the assesssee may be examined on Oath. 7. That the appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid ground/(s) of the appeal either before or at the time of hearing of the appeal. 3. Brief facts of the case are that the assessee filed return of income for the A.Y under consideration on 07.11.2019 at an income of Rs. Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 3 of 9 13,03,990/- in response to notice u/s 148 of the Income-tax Act, 1961 [the Act, for short] on the basis of information from investigation wing, Kolkata. 4. The Investigation Wing informed the AO that the assessee had made purchases from two concerns, namely M/s Usha Trading and M/s Kumar Sales which were bogus and that they are being operated by entry operators Suresh Kumar Agarwal and Anuj Bukardiwala. Ultimately, the AO added the purchase made from M/s Usha Trading of Rs 1,75,94,841/- and from M/s Kumar Sales of Rs 61,30,874/- as bogus purchase and assessed the total income of the assessee at Rs 2,26,26,362/- u/s 147. 6. The assessee went in appeal before the CIT(A), who deleted the addition on the basis of the fact that the Assessing Officer had not examined the documents such bills of purchase; copies of GRs of transporters; C Forms issued by the Sales Tax Department; evidence of payment through banking channels filed by the assessee and also did not make any further verification/enquiry. 7. Aggrieved by the action of the ld. CIT(A), the Revenue is in appeal before us. 8. Before us, the ld. DR vehemently argued that the assessee had not responded to the summons u/s 131 of the Act and, therefore, the Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 4 of 9 Assessing Officer had no occasion to examine the assessee with respect to veracity of purchases made. the Assessing Officer wanted to make enquiry regarding bogus accommodation entry issue through summon proceedings u/s 131 of the Act but the same was not completed as assessee did not appear and, therefore, onus is on the assessee to prove the genuineness which he failed. 9. Further, the ld DR argued that the ld. CIT(A) only relied on the audit report, sales tax copy C Form and payment made through bank but these are only self- serving documents and, therefore, cannot be believed. The ld DR argued that the bogus accommodation entry needs to be inquired/examined by the Assessing Officer and notice u/s 131 of the Act was issued to the assessee for that purpose only and assessee failed to appear. Therefore, the ld. CIT(A) ignored this and decided the cases based on incomplete inquiry. 10. The ld. DR relied on the decision of High Court of Chhattisgarh in the case of Bharat Krishi Kendra v. Union Of India [2022] 136 taxmann.com 245 (Chhattisgarh) which held that: “Where in response to summons issued under section 131, assessee failed to satisfactorily explain source of cash deposit during demonetization period and based on said information, Assessing Officer verified PAN details of assessee and recorded reasons to Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 5 of 9 believe that cash deposit remained unexplained, reassessment proceedings were justified.” 11. Per contra, the ld. counsel for the assessee contended that the Assessing Officer made the addition only on the basis of the fact that he had some information that the assessee had done bogus purchases. The ld. counsel for the assessee emphasized that the Assessing Officer has found no fault in any of the documents filed by the assessee and preferred not to make any further verification/enquiry. Thus, when the nature of transaction is duly explained during the assessment as well as when the same is fully supported by the relevant documents and details the same could not be doubted and, therefore, no addition on the basis of the same could be made. Further, the ld. counsel for the assessee relied on case laws and judgements which hold that when the various documents which prove the genuineness of transaction are available, no addition could be made. The assessee filed various documentary evidence to prove the genuineness of purchases and also requested the adverse material collected by the Assessing Officer including the copy of statement recorded. An opportunity to cross examine was also requested. The Assessing Officer neither commented on the documents filed by the assessee nor replied to its demand for material and cross examination and made the addition. Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 6 of 9 12. The ld. counsel for the assessee further submitted that it is not a case wherein the notices were issued to the party from whom the purchases were made u/s 133(6) of the Act and they have not replied. Moreover, the assessee was never asked to produce the directors. The ld. counsel for the assessee placed reliance on the following case laws: • CIT vs. Odeon Builders Pvt. Ltd. (2019) 418 ITR 315(SC) • CIT vs. Fair Finvest Ltd. (2013) 357 ITR 146 (Del) • Pr. CIT v. Laxman Industrial Resources Ltd., [2017] 397 ITR 106 (Del) • CIT v.Vrindavan Farms (P) Ltd, ITA 71/2015, ITA 72/2015, ITA 84/2015 (del) • CIT Vs M/s Rakam Money Matters Pvt. Ltd. [ITA No. 778 of 2015 Dated 13- 10- 2015] (del) • PCIT vs. Softline Creations Pvt. Ltd (2016) 387 ITR 636 (Del) • Vedic Foundation Private Limited vs. ITO, ITA 9170/Del/2019, dated 25.01.2024 13. The ld. counsel for the assessee continued by saying that making an allegation is one thing and sustaining the addition is another and there is a wide difference between the two. On the basis of allegation, the Assessing Officer can carry out the investigation but the addition can be sustained only when there are sufficient evidences to support the allegation, in the absence of which no addition on account of unexplained credits can be made as held by ITAT Delhi in the case of ITO vs. M/s. Canton Software Pvt. Ltd. ITA No. 4776/Del/2017, CO No. 230/Del/2017. Thus, it is very clear that the Assessing Officer has failed Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 7 of 9 to discharge his liability and in order to just make an addition he has ignored the provisions of law and various judicial pronouncements in this regard and made the addition with closed eyes which is untenable in the eyes of law and thus liable to be deleted. 14. We have heard the rival submissions and have perused the relevant material on record. We find from the facts of the instant case, that the AO received an Investigation Report where it was stated that the assessee is indulging in activity of bogus purchase as the parties from whom purchases are made is being operated by the entry operators. We find from the assessment order that the AO had made several efforts to examine the veracity of the information. The AO issued notices on 30.08.2019; 11.10.2019; 05.11.2019,14.11.2019 and finally a show cause notice on 05.12.2019 along with notice u/s 131 of the Act. We also find that the assessee did not comply with the above notices and even ignored the notice u/s 131 of the Act. The assessee, instead of respecting the summons u/s 131 of the Act and joining the investigation on the serious charge of purchases being arranged from entry operators, filed the details on mail on 17.11.2019. The AO, burdened with time constraint of passing the assessment order before time barring date, passed the assessment order on the same date without examining the documents/evidences produced. The assessee has to share the Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 8 of 9 responsibility of non-examination as he did not avail several earlier opportunities given to it, as discussed above, to establish the veracity of its activities. 15. Considering the facts of the case in totality, we are of the considered view that the CIT(A) fell in error in not establishing the facts of the case by calling a remand report from the AO, especially when one of the parties, Jitendra Kumar, proprietor of M/s Kumar Sales, had admitted on oath to the fact of providing accommodation entries. In view of the discussion as above, we deem it fit to remit the issue of bogus purchases to the file of the AO to examine it and adjudicate afresh. Needless to state that the AO shall provide adequate opportunities to the assessee to present its case with documents/evidence. The Assessee is also directed to avail the opportunities and furnish documents/evidences as required. Ground of the Revenue is allowed for statistical purposes. 16. In the result, the appeal of the Revenue in ITA No. 3555/DEL/2023 is allowed for statistical purposes. The order is pronounced in the open court on 12.11.2025. Sd/- Sd/- [MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12th November, 2025. Printed from counselvise.com ITA No. 3555/DEL/2023 [A.Y. 2012-13] Grape Marketing Pvt Ltd Page 9 of 9 VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order . 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 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. P.S./P.S. 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. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. 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 for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order Printed from counselvise.com "