Solitary ground of appeal that the ld CIT(A) has incorrectly deleted the addition u/s 68 of the I.T. Act

Last updated: 11 August 2021

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The Income Tax Appellate Tribunal (ITAT) Delhi Bench has allowed an appeal filed by the Income Tax Officer (ITO) concerning the deletion of an addition made under Section 68 of the Income Tax Act. The Assessing Officer (AO) had added Rs. 3 crores for unexplained share capital and Rs. 3 lakhs for commission, which the Commissioner of Income Tax (Appeals) had deleted. The ITAT found that the CIT(A) had not adequately addressed the AO's observations and has set aside the order, remanding the case back to the CIT(A) for a fresh decision.

Court :
ITAT Delhi

Brief :
This appeal is filed by the ld AO against the order of the ld CIT(A)-4, New Delhi dated 29.04.2016 for Assessment Year 2009-10.

Citation :
ITA No. 3849/Del/2016

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (Through Video Conferencing) ITA No. 3849/Del/2016 (Assessment Year: 2009-10)

ITO, Ward-10(1), New Delhi

(Appellant)

Garg Alumino Pvt. Ltd, B-79, New Moti Nagar, New Delhi PAN: AAACY1003G

(Respondent)

Revenue by : Shri Gaurav Pundir, Sr. DR
Assessee by: None
Date of Hearing :27/7/2021
Date of pronouncemen:t27/07/2021
O R D E R

1. This appeal is filed by the ld AO against the order of the ld CIT(A)-4, New Delhi dated 29.04.2016 for Assessment Year 2009-10. The ld AO has raised the solitary ground of appeal that the ld CIT(A) has incorrectly deleted the addition u/s 68 of the Act of Rs. 3 crores where the Assessee has failed to produce the parties before the ld AO and further deletion of Rs. 3 lakhs on account of commission for obtaining the accommodation entries. This is the solitary issues in this appeal.

2. The ld DR supported the order of the ld AO and stated that the ld CIT(A) has deleted the addition without any cogent reason.

3.The Assessee preferred an appeal before the ld CIT(A) who passed an order on 29.04.2016 deleting the above addition as per page No. 26 to 29 of his order.

4. As the ld CIT(A) has failed to answer the several observationof the ld AO as stated above, we set aside the both the grounds of appeal of the ld AO back to the file of ld CIT(A) with a direction to the Assessee to produce the share holders before him, which either ld CIT(A) may examine himself or direct the ld AO to examine them and decide the issue afresh after giving proper opportunity of hearing to the Assessee considering the above two judgments of the Hon’ble Supreme Court and Hon’ble Delhi High Court. In view of this, the appeal of the ld AO/revenue is allowed for statistical purposes.

5. Order pronounced in the open court on conclusion of hearing on 27/07/2021.

Please find attached the enclosed file for the full judgement

FAQ :

The appeal concerned the deletion by the CIT(A) of an addition of Rs. 3 crores made by the AO under Section 68 of the Income Tax Act, where the assessee failed to produce parties, and a further deletion of Rs. 3 lakhs for commission.

The AO contended that the CIT(A) incorrectly deleted the addition without cogent reasons, as the assessee failed to produce the relevant parties.

The ITAT allowed the appeal for statistical purposes and set aside the CIT(A)'s order.

The ITAT directed the case to be remanded back to the CIT(A) for a fresh decision, with instructions for the assessee to produce shareholders for examination by either the CIT(A) or the AO.

Section 68 of the Income Tax Act deals with the 'cash credits' and requires assessees to explain the nature and source of any sums credited to their books.