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Judgment
O R D E R
Per Kavitha Rajagopal, JM:
This appeal is filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Appeals) -30 Delhi [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2020-21.
The assessee has raised the following grounds of appeal:-
“1.0That on the facts and in the circumstances of the case, the disallowance, imposition of tax and interest with reference thereto, the quantification of taxable income and the tax liability, has been grossly unjustified, erroneous and unsustainable and necessary direction be given to the Ld. AO to give appropriate relief in accordance with law.
2.0That on the facts and in the circumstances of the case, the order passed by Ld. AO is illegal and bad in law on various judicial and technical grounds.
3.0That the assessment framed u/s 144 of the Act is bad in law as the appellant had duly complied with the notices issued and the books of account were never rejected under section 145(3), rendering the best judgment assessment invalid.
3.1That on the facts and circumstances of the case, the Ld. CIT (A) has erred in confirming the action of the Ld. AO in issuing notice u/s 148 of the Act on the basis of borrowed satisfaction.
4.0That on the facts and circumstances of the case, that the Ld. CIT(A) has erred in confirming the action of the Ld. AO in making additions without providing the incriminating material relied upon, the statement recorded u/s 132(4) of the Act and without granting an opportunity to cross-examine the alleged entry provider, on whose statement adverse inference has been drawn against the appellant, vitiating the assessment.
5.0That on the facts and circumstances of the case, the Ld. AO erred in law in issuing notice u/s 148 without complying with the mandatory provisions of section 148A of the Act, despite the case not falling under any exceptional category, rendering the assessment proceedings void ab initio.
6.0That on the facts and in the circumstances of the case, the Ld. AO has erred in completing the assessment without appreciating the fact that no show cause notice has been issued u/s 127 of the Act before transferring the case.
7.0That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in confirming the action of the Ld.AO in making addition u/s 68 of the Act, despite the appellant having duly discharged the onus laid upon it by establishing the identity, creditworthiness and genuineness of the transaction.
8.0That on the facts and circumstance of the case, the Ld. CIT (A) has erred in confirming the action of the Ld.AO in making addition u/s 69C of the Act towards alleged commission at the rate of 3% on loan transactions, which was made merely on the basis of assumptions and presumptions.
9.0That on the facts and circumstances of the case, that the Ld. CIT(A) has erred in confirming the action of the Ld. AO in holding that the approval granted u/s 151 of the Act was valid, despite the fact that such approval was accorded mechanically and without application of mind.”
Brief facts of the case are that, the assessee is a Private Limited Company and had filed its return of income for the year under consideration declaring loss at Rs.5000/-. Pursuant to the search u/s 132 of the Act conducted on 17/11/2021 in the Galaxy Group, Shri Pradeep Indra Prasad Agrawal, Shri Deepak Agarwal and Shri Himanshu Verma.
The assessese’s case was reopened u/s 147 based on the seized documents and information that the assessee was one of the beneficiaries of accommodation entry provided by the said entities amounting to Rs. 1,83,00,000/-. The Ld. A.O. passed the assessment order u/s 147 r.w. Section 144 of the Act dated 04/03/2026 determining total income at Rs. 51,50,000/- after making an addition of Rs. 50,00,000/- u/s 68 of the Act and Rs. 1,50,000/- u/s 69C of the Act.
Aggrieved, the assessee was in appeal before the first appellate authority who vide order dated 14/11/2025 upheld the addition made by the Ld. A.O. on the ground that the assessee has failed to establish the creditworthiness of the creditors and the genuineness of the transaction.
The assessee is an appeal before us challenging the order of the Ld. CIT(A).
We have heard the rival submission and perused the material available on record. It is observed that the assessee has received loan of Rs. 1,83,00,000/- from M/s LVS Financial Services Private Limited which are managed and controlled by the entities which were alleged to be providing accommodation entries without any genuine business activities. The Lower Authorities held that the assessee has failed to establish the creditworthiness of the said party and the genuineness of the transaction, thereby making an addition on the same as unexplained credit and addition towards commission @ 3% on the said amounts as unexplained expenditure. On perusal of the impugned order of the Ld. CIT(A), it is observed that the Ld. CIT(A) has held that the assessee has furnished no evidences or submission inspite of various opportunities provided to the assessee.
The Ld. Authorized Representative (in short “Ld. AR)” before us contended that though the assessee has furnished all relevant documentary evidences the same were not considered by the Ld. CIT(A) and prayed that the assessee be given one more opportunity to present its case before the first appellate authority. On the basis of the principles of natural justice and in the interest of justice dispensation, we deem it fit to remand all these issues back to the file of the Ld. CIT(A) for de-novo adjudication on the merits of the case after duly considering the submission of the assessee along with the documentary evidences, if any, filed by the assessee. Hence, the grounds of appeal raised by the assessee are hereby allowed for statistical purpose.
In the result, the appeal of the assessee is hereby allowed for statistical purpose.