INCOME TAX OFFICER, WARD-6(1)(1), AHMEDABAD, AHMEDABAD V. NIMIT AGARWAL, AHMEDABAD

ITA 1410/AHD/2024

AI Insights

The case involves an appeal by the Income Tax Officer against Nimit Agarwal concerning the reassessment order for the Assessment Year 2013-14. The reassessment was based on information from the Investigation Wing about alleged accommodation entries provided to the assessee by entities controlled by Sanjay Tibrewal. The initial reassessment added Rs.3,62,60,000 to the assessee's income, which was contested and later deleted by the CIT(A). The Tribunal's decision focused on the lack of evidence from the Revenue to substantiate the claims of accommodation entries, leading to the dismissal of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711464 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH M ISHRA
• Assessee Lawyers: ASTHA MANIAR
• Keywords: Set aside; Unexplained cash credit; Peak credit; Reopening of assessment; Accommodation entries
• Section: 147

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT ANNAPURNA GUPTA, ACCOUNTANT MEMBER And SHRI T.R SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No.1410/Ahd/2024 (Assessment Year: 2013-14) The Income Tax Officer, Ward-6(1)(1), Ahmedabad. Vs. Nimit Agarwal, 401, Hash Apartment, Nr. Himali Tower, Kenyug Char Rasta, Satellite, Ahmedabad-380015. [PAN No. AFRPA5517J] (Appellant) .. (Respondent) Appellant by : Shri Yogesh Mishra, Sr.DR Respondent by: Ms. Astha Maniar, AR Date of Hearing 08.05.2025 Date of Pronouncement 23.07.2025 O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the Revenue as against the appellate order dated 28.05.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre(NFAC), Delhi, arising out of the reassessment order passed under section 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] relating to the Asst. Year 2013-14. Printed from counselvise.com ITA No.1410/Ahd/2024 ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 2– 2. Brief facts of the case are that assessee is an individual and proprietor of Nimit Fabrication. The assessee filed his return of income for the Assessment Year 2013-14 dated 30.01.2014 declaring total income of Rs.2,12,000/-. Assessment was reopened on the grounds that information received from the Investigation Wing, based on the search action u/s.132 of the Act, undertaken on 12.04.2019 in the case of Sanjay Govindram Agrawal (also known as Sanjay Tibrewal) that various entities not carrying out any genuine business activity but run, controlled and managed by him are engaged in providing accommodation entries to various beneficiaries. Thus, accommodation entries amounting to Rs.3,62,60,000/- were made to the assessee. Hence, the assessment was re-opened by issuing notice u/s.148 of the Act on 24.11.2021. During the re-assessment proceedings, various notices were issued to the assessee which were duly complied by the assessee. The assessee submitted that there is no loan or deposits either in the name of Sanjay Tibrewal or his concerned aggregating to Rs. 3,62,60,000/-. In the absence of any details of the above amount, the assessee was unable to furnish necessary explanation on the same. However, the assessee admitted that he was in short term Sharafi transactions with M/s. Radhe Corporation and the closing balance was Rs.9,50,000/- only. The Assessing Officer was not satisfied with the above explanation offered by the assessee, thereby, made an addition of Rs.3,62,60,000/- Printed from counselvise.com ITA No.1410/Ahd/2024 ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 3– u/s.69A of the Act and charged the tax u/s.115BBE of the Act and demanded tax thereon. 3. Aggrieved against the addition, the assessee filed an appeal before the Ld.CIT(A), who deleted the addition of Rs.3,62,60,000/- by observing that it is incorrect to state that the assessee received accommodation loans from Shri Sanjay Tibrewal as follows: “…I have considered the facts of the ground, material available on record, contention of the appellant and impugned assessment order. It is seen that an addition to the tune of Rs.3,62,60,000/- has been made by the AO u/s.68 of the IT Act. The AO has alleged that the appellant was beneficiary of accommodation entry from Shri Sanjay Tibrewal as he was involved in providing accommodation entries through various entities controlled and managed by Shri Sanjay Tibrewal. The AO has also relied upon various documents and statement of Shri Sanajy Tibrewal and Shri Harish M Purohit, who have admittedly accepted their role in providing accommodation entries to various beneficiaries. I have meticulously gone through the impugned assessment order of the AO and argument put forth by the appellant. In my considered view, since the addition has been made to the tune of Rs.3.62,60,000/- has been made by the AO, the said amount must be reflecting in the bank account of the appellant. However, on minute or detailed perusal of the bank statement furnished by the appellant, the total entry to the credit side of the appellant's bank account stands at Rs.1,02,75,351/- and the entire debit side is Rs.96,84,950/-. Even if the total amount of both the sides is taken cumulatively, then the total figure is way below than Rs.3,62,60,000/-, which is alleged to have been received by the appellant as being beneficiary of accommodation entries being provided by Sh. Sanjay Tibrewal. Hence, I am in agreement with the contention of the appellant, that Rs.3,62,60,000/- as alleged to have been received by the appellant appears to be incorrect prima facie. Therefore, in such circumstances, the plea of the appellant is liable to be accepted…” Printed from counselvise.com ITA No.1410/Ahd/2024 ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 4– 4. Aggrieved against the appellate order, the Revenue is in appeal before us, raising the following Grounds of Appeal. 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.3,62,60,000/-made u/s 69A of the Act on account of unexplained credits being in the nature of accommodation entries in the order passed u/s 147 r.w.s.1448 of the Act, without appreciating the facts of the case.\" 2. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary.\" 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored. 5. The Ld. Sr. DR appearing for the Revenue, in support of the grounds of appeal, relied upon the order passed by the Assessing Officer and requested to sustain the addition. 6. Per Contra, the Ld. AR appearing for the assessee submitted that it is undisputed fact that the assessee has never received any loans from Shri Sanjay Tibrewal by way of accommodation entries. The Ld.CIT(A) on detailed perusal of the bank account found the credit entries in the account stand at Rs.1,02,75,351/- and debit entries at Rs.96,84,950/. The total amount of both the sides is taken cumulatively is still below Rs.3,62,60,000/- as alleged by the Assessing Officer. Thus, he deleted the addition, however, the Ld.CIT(A) made addition on account of Sharafi transactions made with M/s. Radhe Corporation by applying peak credit of Printed from counselvise.com ITA No.1410/Ahd/2024 ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 5– Rs.15,40,000/- as unexplained income of the assessee. Thus, the findings arrived by the Ld.CIT(A) does not require any interference. 7. We have given our thoughtful consideration and perused the materials available on record. The Ld.CIT(A), after perusal of the bank statements, made a clear observation that there is no loan transaction of Rs.3,62,60,000/- by way of accommodation entries from Shri Sanjay Tibrewal. Thus, the very basis of reopening of Assessment itself is invalid in Law. Further, the Revenue could not place on record the alleged accommodation entries availed by the assessee from Shri Sanjay Tibrewal with necessary evidences. Thus, we do not find any infirmity in the order passed by the Ld.CIT(A) by deleting the addition made u/s.69A of the Act. Thus, the grounds raised by the Revenue are devoid of any merit and is hereby dismissed. 8. In the result, the appeal filed by the Revenue is dismissed. The order is pronounced in the open Court on 23.07.2025 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER (True Copy) Ahmedabad; Dated 23.07.2025 Manish, Sr. PS TRUE COPY Printed from counselvise.com ITA No.1410/Ahd/2024 ITO Vs. Nimit Agarwal Asst.Year –2013-14 - 6– आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Surat/Ahmedabad 6. गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad/Surat Printed from counselvise.com "