The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (CIT) Appeals’ decision to delete the addition under Income tax act made by the Assessing Officer (AO) due to lack of corroborative evidence.
KapilkumarAmarchand Agrawal, the appellant assessee, underwent a reassessment under Section 148 of the Income Tax Act for the Assessment Year 2010-11. Following this, notices were issued, requiring the filing of returns; the assessee filed the returns, and assessments were made accordingly, leading to an addition of Rs 19,77,500 under Section 68, which was later deleted by the CIT(A).
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The Income Tax Department reassessed assessee’s income for the Assessment Year 2010-11, adding Rs 19,77,500 under Section 68, alleging bogus transactions with RS Enterprise and Suruchi Trading. However, during the proceedings, it was revealed that the assessee had actually transacted with Joindre Commodities and Ratanlal Somani, reporting a profit of Rs 19,77,500 and a speculation profit of Rs 10,08,574, which was declared in the return. The CIT(A) deleted the addition, citing lack of evidence supporting the alleged transactions with RS Enterprise and Suruchi Trading.
The counsel representing revenue argued that the CIT(A) erred in deleting the addition of Rs 19,77,500 made under Section 68 without considering the National Multi Commodity Exchange’s confirmation of transactions with RS Enterprise and Suruchi Trading.Also the assessee allegedly used these entities for accommodation entries (bogus profit/loss).
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The counsel further argued that the assessee’s transactions with RS Enterprise and Suruchi Trading were not reflected in their books of accounts.
However, the assessee rebutted by arguing during his cross-objection that the CIT(A) correctly deleted the addition as the Revenue failed to provide evidence supporting the alleged transactions with RS Enterprise and Suruchi Trading.Further contended that revenue’s allegations are based on unverified information from the Investigation Wing.
The single-member bench comprising Dr. BRR Kumar (Vice President) examined the case and noted that although the Revenue alleged the assessee, KapilkumarAmarchand Agrawal, had transactions with RS Enterprise and Suruchi Trading, the CIT(A) found no evidence supporting these claims. Instead, the assessee’s transactions with Joindre Commodities and Ratanlal Somani, totaling Rs 9,53,933 and earning a profit of Rs 19,77,500, respectively, were verified. The CIT(A) deleted the addition of Rs 19,77,500 under Section 68, citing lack of evidence, and the Tribunal upheld this decision, dismissing the Revenue’s appeal.
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Since it was clear that the assessee has not entered into transaction with entities namely RS Enterprise and Suruchi Trading as alleged by the revenue, the Bench declined to interfere with the order of the CIT(A).
Hence, the appeal filed by the Revenue was dismissed and the cross-objection filed by the assessee is dismissed as there’s no practical effect.
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