2021 (8) TMI 1284 - AT - Income Tax

Addition u/s 68 - genuineness of the transactions - stark difference between the amount mentioned by the assessee in his books and that shown in the books of M/s. Basant Marketing - HELD THAT - The assessee has furnished copy of audited accounts, balance sheet and P L account along with annexure, copy of ledger of Basant Marketing P. Ltd. And during the course of assessment proceedings, Basant Marketing P. Ltd. categorically confirmed the entry of ₹ 2,43,00,000/- with copy of bank accounts reflecting the transaction therein. And M/s. Basant Marketing P. Ltd. has confirmed amount outstanding in the account of assessee company is only ₹ 1,93,00,000/- which has been repaid during F.Y. 2014-15. And so far remaining amount 50,00,000/- is concerned, assessee filed separate proof of payment to the A.O. and again filed before the Ld. CIT(A) and it was at Calcutta conducted detailed enquiry of Basant Marketing P. Ltd. wherein it is mentioned that Basant Marketing is not a fake company and its activities are genuine. Assessee has filed an order of ITAT Mumbai Benches 2019 (6) TMI 1606 - ITAT MUMBAI wherein one person namely Shri Harsh Dalmia was the beneficiary to the tune of ₹ 1,14,85,500/- from the group companies namely Basant Marketing P. Ltd. who was assessed to tax with them who provided accommodation entry and Department issued notice and Ld. A.O. made addition in the case of Harsh Dalmia. Thereafter in appeal before the Ld. CIT(A) relief was granted to the assessee and thereafter Department appeal was dismissed by the ITAT holding that activities of Basant Marketing are found to be genuine. And thereafter no appeal was filed by the Department against the order of the ITAT Mumbai Benches. So considering above all these facts, we are of the opinion that order of Ld. CIT(A) is detailed and reasoned and same does not require any kind of interference at our end. - Decided against revenue.

Summary

Issues:
1. Admitting fresh evidence in violation of Rule 46A of IT Rules.
2. Deletion of addition made under section 68 of the IT Act.
3. Failure to prove genuineness of transactions under section 68 of the Act.
4. Precedent value of orders from different CIT (A).

Analysis:
Issue 1: Admitting fresh evidence in violation of Rule 46A of IT Rules
The appeal by the Revenue challenged the Ld. CIT(A)'s order, alleging a violation of Rule 46A of the IT Rules due to the admission of fresh evidence. The Revenue contended that this action was improper. However, the Tribunal did not find merit in this ground of appeal as per the judgment.

Issue 2: Deletion of addition made under section 68 of the IT Act
The Ld. CIT(A) had deleted an addition of ?2,43,00,000 made under section 68 of the IT Act. The Revenue disputed this deletion, claiming an error in law and facts. The Tribunal examined the facts, including the discrepancy between the amounts in the assessee's books and those in Basant Marketing's books. Ultimately, the Tribunal upheld the decision of the Ld. CIT(A) in this regard.

Issue 3: Failure to prove genuineness of transactions under section 68 of the Act
The Revenue argued that the genuineness of transactions under section 68 of the Act was not adequately proved by the assessee. The Tribunal reviewed the confirmation provided by Basant Marketing P. Ltd. and the subsequent clarifications regarding the outstanding balance. Based on the evidence presented, including the confirmation accounts and ledger copies, the Tribunal found the transactions to be genuine and upheld the Ld. CIT(A)'s decision.

Issue 4: Precedent value of orders from different CIT (A)
The Revenue contended that the orders of different CIT (A) in various cases should not serve as precedents. However, the Tribunal noted that the Ld. CIT(A) had thoroughly examined the activities of Basant Marketing P. Ltd. and found them to be genuine. Additionally, the Tribunal referenced a similar case from ITAT Mumbai Benches where the activities of Basant Marketing were deemed genuine, further supporting the decision of the Ld. CIT(A).

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the detailed and reasoned order of the Ld. CIT(A) based on the evidence presented and the findings regarding the genuineness of the transactions involving Basant Marketing P. Ltd.