ITAT Directs Fresh Examination of Alleged Accommodation Entry Addition Based on Investigation Wing Inputs [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a matter back to the Assessing Officer, holding that an addition made solely on the basis of uncorroborated information received from the Investigation Wing cannot be sustained without granting the assessee a proper opportunity of hearing.

The appeal was filed by Oracle Granito Ltd. against an order passed by the National Faceless Appeal Centre. The order had confirmed an addition of ₹2,00,184, treating the amount as an accommodation entry allegedly received from a third party. The assessment for the relevant year was reopened under Section 147 of the Income Tax Act, 1961.

During the assessment proceedings, the assessee denied receiving any accommodation entry. The Assessing Officer referred to three credit entries appearing in the bank account of the assessee, amounting to ₹2,75,518, ₹2,87,619 and ₹12,173, received through cheque. However, no material could establish receipt of the alleged accommodation entry amount.

The Tribunal observed that the entire addition had been confirmed without complete details of the alleged transactions. It was further noted that the assessee claimed the credited amounts to be business receipts arising out of sales and not unexplained accommodation entries.

Holding that principles of natural justice were not complied with, the Tribunal directed the Assessing Officer to furnish all relevant information relied upon. This included details and nature of the alleged accommodation entry.

Thereafter, the assessee was allowed to submit explanations and supporting evidence. The Assessing Officer was directed to decide the issue afresh after providing due opportunity of hearing.

Accordingly, the appeal was allowed.

The decision, pronounced on 27 January 2026, was rendered by the Bench comprising Sanjay Garg (Judicial Member) and Annapurna Gupta (Accountant Member).

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