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ITO, Ward 47(1), Room No.188, CR Building, IP Estate, New Delhi. Vs. Bhagwati Builders,E-315, Basement, Greater Kailash Part-1, New Delhi.
October, 09th 2014
                  DELHI BENCHES : A : NEW DELHI


                         ITA No.4221/Del/2009
                       Assessment Year : 2001-02

ITO,                              Vs.   Bhagwati Builders,
Ward 47(1), Room No.188,                E-315, Basement,
CR Building, IP Estate,                 Greater Kailash Part-1,
New Delhi.                              New Delhi.

                                        PAN : AAAFB3037G

     (Appellant)                           (Respondent)

              Assessee By     :    Shri N.K. Gupta, CA
              Department By   :    Ms Kakkar, Sr.DR



       This appeal by the Revenue is directed against the order passed

by the CIT (A) on 31.8.09 in relation to the assessment year 2001-02.

2.     All the grounds raised in this appeal are against the deletion of

addition of ` 20 lac made by the AO u/s 68 of the Act.

3.     Briefly stated, the facts of the case are that the AO received a

report from the Investigation Wing revealing that the assessee had
                                                       ITA No.4221/Del/2009

taken entry of ` 20 lac from M/s P.S Daxelor after paying commission

@ 1% to the entry provider. After issuing notice u/s 148, the assessee

was called upon to explain its position on this entry. The assessee's

representative appeared contending that the firm was not doing any

business for the last 9-10 years and it was dissolved long back. The

authorized representative further submitted that how the transaction

of ` 20 lac could take place when the business itself was closed long

back. The AO observed that at the time of search at the premises of

M/s P.S. Daxelor, the Investigation Wing came to know that the

assessee, namely, M/s Bhagwati Builders, had received ` 20 lac as

accommodation entry. In the absence of any details furnished by the

assessee, the AO made addition u/s 68 of this sum. The ld. CIT(A) got

convinced with the submissions advanced on behalf of the assessee

and ordered for the deletion of addition. The Revenue is aggrieved

against such deletion.

4.   We have heard the rival submissions and perused the relevant

material on record. It can be seen from the submissions advanced by

the assessee before the AO as well as the ld. CIT(A), which have not

been refuted with any cogent material, that the assessee's business

was closed for the last 9-10 years and the firm itself was dissolved

                                                        ITA No.4221/Del/2009

long back. The only basis on which such addition was made by the AO

is the information received from the Investigation Wing.     When the

assessee categorically stated before the AO that no such entry was

ever received, we fail to appreciate as to how any addition u/s 68

could have been made without first controverting the assessee's

contention in this regard. It is trite law that a particular contention

raised by the assessee has to be taken as correct unless proved

otherwise. It is impermissible on the part of the AO to set aside the

contention made by assessee and proceed on a presumption contrary

to such contention without any thing further.     It is just basic that

section 68 can be invoked only if some credit is appearing in the

books of the assessee. In the absence of any such credit, there can be

no question of taking recourse to section 68. When we advert to the

facts of the instant case, it is noticed that there is no mention

whatsoever in the assessment order about the fact that any such

entry appeared in the books of account of the assessee.         Another

factor which merits mention is that the assessee had only one bank

account with Vijaya Bank which stood closed on 7.7.99. The previous

year relevant to the assessment year under consideration runs from

1.4.2000 to 31.3.2001.   When the assessee did not have any bank

                                                             ITA No.4221/Del/2009

account at the material time and further the business stood closed,

we fail to appreciate as to how the AO could make addition simply on

the basis of some report of the Investigation Wing. Before making any

such addition, the minimum required from the AO was to first confront

the details of such investigation report to the assessee and then prove

that this amount was credited in the books of the assessee which was

unexplained within the meaning of section 68 of the Act. Nothing of

this sort has been done in the instant case. Considering the totality of

the facts and circumstances prevailing in the instant case, we are of

the considered opinion that the ld. CIT(A) was fully justified in deleting

this addition. We, therefore, countenance the impugned order on this


5.    In the result, the appeal is dismissed.

      The order pronounced in the open court on 01.10.2014.

           Sd/-                                       Sd/-

       [A.T. VARKEY]                                [R.S. SYAL]
     JUDICIAL MEMBER                            ACCOUNTANT MEMBER

Dated, 01st October, 2014.


                               ITA No.4221/Del/2009

Copy forwarded to:

  1.   Appellant
  2.   Respondent
  3.   CIT
  4.   CIT (A)
  5.   DR, ITAT

                         AR, ITAT, NEW DELHI.


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