Case of Double Addition under the Income Tax Act

This Income Tax Appellate Tribunal case involved an assessee company, M/s Varrenyam Securities Pvt. Ltd., whose income was assessed on a protective basis by the AO. The assessment arose from alleged collusion between the assessee's CA and an entry operator to arrange accommodation entries. However, the Tribunal allowed the assessee's appeal, referencing a similar case where an addition was deleted because the funds were determined to be loans from the assessee that had been repaid.

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘A’, NEW DELHI
Before Sh. Amit Shukla, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 875/Del/2016 : Asstt. Year: 2012-13

M/s Varrenyam Securities Pvt. Ltd.,
2442/10, 1st Floor, Beadonpura,
New Delhi-110005

(APPELLANT)

PAN No. AADCV6176G

vs

DCIT,
Central Circle-20,
New Delhi-110055

(RESPONDENT)

Assessee by : Sh. P. Roy Chaudhary, Adv.
Revenue by : Sh. Satpal Gulati, CIT DR
Date of Hearing: 14.07.2021 Date of Pronouncement: 24.08.2021
ORDER

The present appeal has been f i led by the assessee against  the orders of ld. CIT (A)-27, New Delhi dated 30.12.2015.

2. The assessee is an India Private Limited company. The assessee has filed its return of income declaring an income of Rs.1,33,04,450/- u/s 139(1) electronically on 19.10.2012. The AO assessed the total income of the assessee at Rs.25,11,04,450/- on protective basis.

3. Perusal of various statement of Shri Atul Khandelwal, CA which were recorded during the survey proceedings unambiguously indicates that Sh. Atul Khandelwal had col luded with Mr. Himanshu Verma, an entry operator and was instrumental at arranging the accommodation entries for M/s Varrenyam Securities Pvt. Ltd. from various shell companies owned and control led by the Himanshu Verma Group in lieu of commission.

4. From the order of the Co-ordinate Bench of the ITAT in the case of DCIT Vs. M/s Sidhvandan Enterprises Pvt. Ltd. in ITA No. 1177/Del/2016 vide order dated 12.12.2019, we find that the addition made in the hands of M/s Sidhvandan Enterprises Pvt. Ltd. of the same amount has been deleted after considering the fact that the appeal of the assessee has been dismissed by the Tribunal after considering the fact that M/s Sidhvandan Enterprises Pvt. Ltd. has received loan from the assessee and the loan repayment has been made leading to an indisputable conclusion that the amount originally belongs to the assessee.

5. In the result, the appeal of the assessee is allowed for statistical purpose.
Order Pronounced in the Open Court on 24/08/2021.

Please find attached the enclosed file for the full judgement.