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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
The instant appeal filed by the Revenue is directed against the order dated 07.01.2026 passed by the ld. Commissioner of Income-tax (Appeals)-3, Noida [hereinafter referred to as the ‘Ld. CIT(A)’] arising from the assessment order under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 dated 30.12.2017 passed by the DCIT, Central Circle-1, Noida for the Assessment Year 2015-16.
None appeared on behalf of the assessee. We heard the ld. DR at length who assisted us with the facts of the case. Case records carefully perused and considered.
Revenue filed the following grounds of appeal as under:
“1.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs.53,01,850/- made by the Assessing Officer under section 68 of the Income-tax Act, 1961 without properly appreciating the facts of the case that the assessee belongs to a group where search proceedings had revealed involvement in obtaining accommodation entries through non-existing paper companies and therefore the assessee was required to establish the genuineness of the transactions with cogent evidence.
2.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in admitting and relying upon additional evidences filed by the assessee during the appellate proceedings without providing a reasonable and effective opportunity to the Assessing Officer to examine such evidences and submit a remand report, thereby violating the provisions of Rule 46A of the Income-tax Rules, 1962.
3.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in granting relief to the assessee despite the fact that the assessee had failed to furnish confirmations, bank statements, financial statements and other documentary evidences during the assessment proceedings to establish the identity, creditworthiness and genuineness of the creditors as required under section 68 of the Income-tax Act, 1961.
4.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the additions made by the Assessing Officer on account of credit entries found in the bank account of the assessee without proper verification of the supporting evidences and without establishing the genuineness of the transactions.
5.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that mere filing of ITR, bank statements or confirmations does not discharge the onus cast upon the assessee under section 68 of the Income-tax Act, 1961 unless the assessee proves the identity of the creditor, the creditworthiness of the creditor and the genuineness of the transaction as stated by the Hon'ble Delhi High Court in the case of CIT Vs. N.R. Portfolio Pvt Ltd (2014).
6.Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate the facts that the assessee is a part of accommodation entry providing group and is indulge in accommodation entry providing activities and even then, allowed the appeal of the assessee without submission of proper confirmations from the parties satisfying the conditions of section 68 of the Act.
7.On the facts and in the circumstances of the case and in law, the appeal is maintainable notwithstanding that the tax effect is below the prescribed monetary limit, as the case falls under the exception provided in para 3.1(h) of CBDT Circular No. 09/2024 dated 17.09.2024, being a case involving organized tax evasion/accommodation entry.
8.The appellant craves leave to add, amend, alter or withdraw any ground(s) of appeal at the time of hearing.”
Brief facts of the case are that in this case a search action u/s 132 was conducted on 30.09.2015 on the Airwill Group of cases. As per AO, during the search and post search enquiry, it was observed that companies of this group are involved in taking bogus unsecured loans from non-existing companies and passing it on to the main entity of the group. Further as per AO, ITI personally visited the addresses of some selected lenders of the Airwill Group but the said entities were found non-existent. Further as per AO, perusal of the bank account of the assessee company reveals total credit of Rs.53,04,137/-. The details of the credits have been tabulated in the assessment order as under:
| Credits | Amount |
|---|---|
| BOB | 30,00,000/- |
| CAB | 10,00,000/- |
| CAB | 10,00,000/- |
| RTGS | 3,00,000/- |
The AO has further stated that the assessee only submitted the ITR and audit report with respect to various lenders from whom money has been received. The AO accordingly treated the total credits of Rs.53,04,137/- as unexplained under section 68 of the Act.
It was informed by the learned DR that in the instant case addition of Rs.53,01,850/- was made under section 68 of the Act. It was submitted that the assessee was part of entry operator group and had provided entry of the said amount. Learned DR relied on the order of the AO.
We have heard the learned DR and perused the material available on record. We find from assessment order as well as ground 6 of the Revenue that the assessee is part of accommodation entry provider group and has indulged to providing accommodation entry of the aforesaid amount which has been added under section 68 of the Act. We are of the view that the assessee, being accommodation entry provider, the entire amount cannot be added and only the commission element embedded in the entries provided, may be considered as income of the assessee. We accordingly, estimate a commission of 5% of the entries provided of Rs.53,01,850/- as income of the assessee. The appeal of the Revenue is decided on the aforesaid terms.
In the result, appeal filed by the Revenue in ITA No.3365/Del/2026 is partly allowed.