Shikha Gupta vs Income Tax Officer, Ward 36(1)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 26.11.2025, for Assessment Year 2018-19.

The solitary issue assailed by the Id. AR of the assessee in present appeal is addition of Rs.11,00,000/- made u/s.69A r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on account of alleged accommodation entry obtained by the assessee from M/s. Kamal Enterprises during Financial Year 2017-18.

Shri Arun Jain, appearing on behalf of the assessee submits that during the period relevant to assessment year under appeal, the assessee jointly with her husband Shri Shailesh Gupta had purchased immovable property for a total consideration of Rs.48,50,000/- vide Registered Sale Deed in 08.06.2017. For acquiring said immovable property, the assessee had taken loan of Rs.51,00,000/-from ICICI Bank. The bank loan account statement and loan sanction letter are at page 51 and 52 of the paper book. The ld. AR further submits that after purchase of aforesaid property the renovation and repair work was carried out for which payment of Rs.11,00,000/- was made to M/s. Kamal Enterprises. The payment was made through banking channel. A copy of bank statement through which payment was made to M/s. Kamal Enterprises on 13.06.2017 is at page 55 of the paper book. The assessee categorically denied before the Assessing Officer (AO) of having bogus and fictitious transactions with M/s. Kamal Enterprises. The AO without considering submissions of the assessee invoked the provisions of section 144 of the Act and made addition of Rs.11,00,000/- on account alleged accommodation entry in the form of bogus/fictitious purchases from M/s. Kamal Enterprises. The ld. AR further pointed that the property was purchased in joined names of the assessee and her husband. In the case of assessee’s husband no addition was made on account of alleged bogus transaction. The ld. AR furnished copy of the assessment order dated 05.03.2024 for AY 2018-19 passed u/s.147 r.w.s. 144B of the Act at page 59 to 65 of the paper book in the case of Shailesh Gupta.

The ld. AR pointed that the First Appellate proceedings, the CIT(A) confirmed the addition. Hence, present appeal by the assessee.

Per contra, Shri Manoj Kumar, representing the department vehemently supported findings of the CIT(A) and prayed for dismissing appeal of the assessee. The ld. DR submits that neither before the AO, nor before the CIT(A) the assessee produced any documentary evidence in the form of bills, invoices, etc. to show that the assessee had hired services of M/s. Kamal Enterprise Contractor for construction, interior fixtures and renovation with material of the property purchased by the assessee.

Both sides heard, orders of the authorities below examined. The short issue in present appeal is with regard to addition of Rs.11,00,000/-, the amount paid by the assessee to M/s. Kamal Enterprises for renovation of property purchased by the assessee. It is an undisputed fact that the assessee in joint name with her husband had purchased immovable property vide Registered Sale Deed in 08.06.2017 for Rs.48,50,000/-. The assessee has been able to substantiate that for the purchase of property, the assessee had taken loan of Rs.51,00,000/- from ICICI Bank. The assessee had further incurred expenditure of Rs.11,00,000/- for renovation of the property purchased. The said payment was made to M/s. Kamal Enterprises on 13.06.2017 through bank RTGS. The Revenue has raised doubt over genuineness of the payment made to M/s. Kamal Enterprises. Though, the assessee has not been able to produce any documentary evidence to show that the payment was made to M/s. Kamal Enterprises for renovation but the proximity of date of purchase of property and payment made to M/s. Kamal Enterprises for carrying out renovation work gives some credence to the stand of the assessee. After purchase of immovable property no other amount has been claimed towards repairs, renovation and interior works. Considering peculiar facts of the case, the addition of Rs.11,00,000/- is directed to be deleted.

Before parting with the order, I may hasten to add that this appeal has been decided in peculiar facts of the case, hence, does not set any precedence for further references.

In the result, the impugned order is set aside appeal of the assessee is allowed.