Income Tax Appellate Tribunal - Delhi
Income Tax Officer, Meerut vs Deepak Mittal, Meerut on 8 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, E: NEW DELHI
BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER
AND
SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER
ITA No.- 5269/Del/2025
[Assessment Year: 2022-23]
Income Tax Officer, Deepak Mittal,
Aayakar Bhawan, Bhainsali Khajoori Darwaja, Kila
Ground, Vs Parikshitgarh, Meerut,
Meerut, Uttar Pradesh-250001. Uttar Pradesh-250001.
PAN- BHTPK3898M
Revenue Assessee
Revenue by Shri Ravi Kant Choudhary, Sr. DR
Assessee by None
Date of Hearing 18.03.2026
Date of Pronouncement 08.04.2026
ORDER
PER BRAJESH KUMAR SINGH, AM,
This appeal by the Revenue is directed against the order of National Faceless Appeal Centre (NFAC) [hereinafter referred to as the 'Ld. CIT(A)] order dated 30.06.2025 arising out of the Assessment Order dated 11.03.2024 passed under section 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as 1 ITA No.- 5269/Del/2025 Deepak Mi al the 'the Act') by the Assessment Unit, (hereinafter referred to as the 'AO') pertaining to Assessment Year (A.Y.) 2022-23.
2. At the time of hearing before us, none appeared on behalf of the assessee. This appeal was heard after hearing the Ld. Sr. DR and on the basis of material available on record.
3. The Revenue has raised the following grounds of appeal:
" 1. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions of Rs. 11,70,560/-as unexplained credit u/s 68 & Rs. 1,28,761/- as unexplained expenditure U/s 69C made by the AO overlooking the fact that M/s Zhongmao International Project Pvt. Ltd is bogus entity as verified by the Investigation Wing of the Department.
2. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions of Rs. 11,70,560/- as unexplained credit u/s 68 & Rs. 1,28,761/- as unexplained expenditure U/s 69C made by the AO overlooking the fact that from the Investigation report, it is evident that Shri Avinash Jha,. Director of M/s Zhongmao International Project Pvt. Ltd has used this entity to provide bogus entries/accommodation entries which is duly supported by evidences and therefore, sales made to this company by the assesseee, has been rightly held as bogus
3. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions of Rs. 11,70,560/-as unexplained credit u/s 68 & Rs. 1,28,761/- as unexplained expenditure U/s 69C made by the AO without appreciating the fact that in the Tax Audit Report, it is clearly mentioned by Tax Rs. Auditors that "Proper stock records are not maintained by the assessee & furthermore in Tax Audit Report in clause 35(a), no quantitative details of principle items of goods traded have been added.
4. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the sales as genuine accepting the contention of the assessee that the transportation of goods was by truck and tractor owned by the assessee ignoring the fact that freight bills were in the name of Jai Nirvana Road carrier and other entities and further overlooked the fact that no truck or tractor has been declared by the assessee in schedule of fixed assets 2 ITA No.- 5269/Del/2025 Deepak Mi al
5. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the contention of the assesseee that cement has been stated to be sold by assesssce to "ZIPPL" ignoring the fact that business code in Tax Audit Report & ITR of ZIPPL has been shown as 09027 & 09028 & same is not pertaining to cement OR construction material.
6. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in appreciating that the "the amount reported by as having been involved in accommodation entry is Rs. 18.29,000/- whereas the amount assessed by the AO is Rs. 11,70,560/-ignoring part of the bogus sales booked in preceding assessment year.
7. That the appellant craves leave to add, modify, amend OR DLEETE any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. "
3. Brief facts of the case: The AO noted that during the course of search in the case of Oppo Group it was noticed that the assessee was a beneficiary of accommodation entry of bogus sales of Rs. 18,29,000/- from one of the concerns of Shri Avinash Jha, i.e. Zhongmao International Project Pvt. Ltd (hereinafter referred to as ZIPPL). Upon perusal of details filed by the assessee, the AO noted that total sales during the year to ZIPPL was to the tune of Rs. 11,70,560/- and not Rs.
18,29,000/- as per initial information with the AO.
3.1 The AO in view of the facts as noted in the assessment order was of the view that the amount of Rs. 11,70,560/- reported as payment received from ZIPPL for sale consideration are bogus transactions and unexplained credit u/s 68 of the Act.
Accordingly, the AO issued a show-cause notice dated 15.02.2024.
3.2 The assessee submitted its reply as under:
3ITA No.- 5269/Del/2025 Deepak Mi al " That the assessee had made the sale of cement to the said party namely M/s ZHONGMAO INTERNATIONAL PROJECT PVT LTD and the material was delivered to the party through the sale invoices along with the e-way bill generated at the time of sale. All the aforesaid documents is in the possession of the assessee and the same are enclosed herewith as Annexure-1 The payment is also being received in advance from the said party through banking channel. Photocopy of the relevant portion of bank statement is also enclosed herewith as Annexure-2 Therefore claim of department for accommodation entry is inappropriate The assessee has not paid any commission as alleged by your good-self and therefore the proposed addition of Rs.1,28,761/- as unexplained expenditure is illegal & unwarranted.
In view of above, it is submitted that the proposed addition of Rs 12.99.321/-as unexplained credit and as of unexplained expenditure in the hands of the assessee is totally illegal and unwarranted and therefore the same may kindly be worked out after considering the submission of the assessee and documents on record.
If your good-self is not agreed with the documents and submission of the assessee, it is humbly requested your good-self to kindly provide us the information/documents/statements in your possession for rebuttal the same, on which your good-office has relied that the assessee is indulge in providing accommodation entries."
3.3 The AO did not accept the above explanation of the assessee and added a sum of Rs. 11,70,500/- u/s 68 r.w.s. 115BE of the Act. Further, the AO added a sum of Rs. 1,28,761/- u/s 69C being the commission paid for the said entry of Rs.
11,70,560/-. The relevant extract of the assessment order is reproduced as under:
"4.5 Point wise rebuttal of reply of the assessee including analysis of any case law relied upon:
4.5.1 The submission made against the show cause notice and the documents furnished with it perused and duly considered but found unacceptable for the reasons mentioned below. The assessee requested to treat the sale made to parties mentioned above genuine on the basis of purchase/sale bills, payment from banking channels etc. This part of reply cannot be accepted as it is well established that the transaction made with these parties are not genuine and the documents viz. purchase/sale bills, stock register, use of banking channel are all part of modus operandi mentioned above. 4.5.2 The reply of the assesse is not accepted. The search and seizure action was carried out on the M/s Oppo Mobiles India Pvt. Ltd. M/s Mobitech Creations Pvt. Ltd., M/s PacetelSystem Pvt. Ltd and Shri Mohinnder Singh Malik & Super distributors of M/s 4 ITA No.- 5269/Del/2025 Deepak Mi al Mobiel India Pvt. Ltd., and its suppliers parties including M/s Genome Optech Ltd and M/s Kiunsham Micreolectronices India Pvt. Ltd.
During the course of the search proceedings, the residential premises of Shri Avinash Kumar, Director M/s Genomne Optech Pvt. Ltd. Was covered at C-84, 2nd Floor, C- Block, Section 33, Near NTPC Society, Noida.
From the analysis of the digital evidence from the mobile of Mr. Avinash Kumar, Several incriminating evidences were found that indicated that he was an entry provider that facilitated accommodation entries to various beneficiary companies through the fictitious entities controlled by him like M/s Saaransh Associates Pvt. Ltd., M/s Zhongmo Interenatioal Projects Private Ltd. Incriminating documents related to unaccounted cash transactions have been found that reflet that Mr. Avinash along with his related persons engaged in ahwala transactions and giving entries from shell companies as bogus purchases on which commissioner was earned by Mr. Avinash Jha. During the search several incriminating documents were found on the basis of which it was established that M/s Zhongmao International Projects Pvt. Ltd. is a shell company. Shri Avinash Jah in his statements accepted the modus operandi. M/s Zhongmao International Projects Pvt. Ltd. Was providing accommodation entries of bogus sales to M/s CCTEB India. Pvt. Ltd. In the report of the Investigation Unit it is established the scheme of accommodation entries beyond doubt, hence there was not need to further investigate the matter.
The assesse Shri Deepak has confirmed the sale transaction to M/s Zhongmao International, who is only a papery company.
4.6.1 Considering the facts and circumstance of the case, material available on record the amount of Rs. 11,70,560 reported as payment received for sale to M/s Zhongmao International are treated bogus transactions.
4.6.2 Therefore, Rs. 11,70,560/- is added to the total income of the assessee u/s 68 of the Income-tax Act, 1961 as unexplained credit. Tax is also charged u/s 115BBE of the Income-tax Act, 1961.
Penalty proceedings under section 271AAC of the Income Tax Act, 1961, are also initiated separately.
4.6.3 Further as per the Investigation Report commission @ 9.25% to 11% is being charged for providing accommodation entries. Therefore, Rs. 1,28,761/- being commission @ 11% on the accommodation entry of Rs. 11,70,560/- is being added to his total income as unexplained expenditure u/s 69C of the IT Act, 1961. Therefore, the commission paid for getting entry of bogus sales is Rs. 1,28,761/-(11% of 11,70,560) and is also being proposed to be added back in total income of the assessee as unexplained expenditure u/s 69C r.w.s. 115BBE of the IT Act. Penalty proceedings under section 271AAC of the Income Tax Act, 1961, are also initiated separately."
5ITA No.- 5269/Del/2025 Deepak Mi al
4. Aggrieved with the said order, the AO filed an appeal before the Ld. CIT(A).
5. The Ld. CIT(A) deleted the both additions. The relevant extracts of the order of the Ld. CIT(A) are reproduced as under:
"6.5 The AO has completely relied on the report of the Investigation Wing. I have perused the report of the DDIT. In the statement of Avinash Jha quoted in the investigation report, there is no mention of the appellant. In any case, assessment has to independently establish the information that may be contained in the investigation report. Merely stating that "In the report of the Investigation Unit it is established the scheme of accommodation entries beyond doubt, hence there was not need to further investigate the matter"; cannot be the basis for addition. It is also significant that the amount reported by as having been involved in accommodation entry is Rs. 18,29,000 whereas the amount assessed by the AO is Rs. 11,70,560. Grounds 3 to 7 are allowed.
6.6 The AO has assessed u/s 69C, commission paid by the appellant to the accommodation entry operator on the basis of the assumption that such accommodation entry was taken. The remarks of the AO is reproduced below:
"Further, as per the investigation report commission at the rate of 9.25% to 11% is being charged for providing accommodation entries. Therefore, Rs.1,28,761 being commission at 11% on the accommodation entry of Rs.11,70,560 is being added to his total income unexplained expenditure under section 69C of the IT Act.
6.7 The AO has completely gone by the report of the Investigation report without bringing any evidence on record. Not even the statement of any witness is mentioned. Such an addition is purely based on presumption and is not sustainable. Further, I have deleted the addition based on accommodation entry. Therefore, this addition is also deleted. Ground 8 is allowed."
6. The ld. Sr. DR supported the order of the AO and the grounds of appeal.
7. We have heard rival submissions and perused the material available on record.
In this regard, the statement of facts and the basis of authorities of appeal by the Ld. PCIT, Ghaziabad is reproduced as under:
" The facts of the care are that the assessee individual Deepak Kumar proprietor of M/s Deepak Traders has filed his ITR for the A.Y. 2022-23 on 25.10.2022 declaring total 6 ITA No.- 5269/Del/2025 Deepak Mi al income at Rs. 13,59,560/. This case was selected for scrutiny on the basis of following information:
During the course of search in the case of Oppo Group it was noticed that the assesee is beneficiary of accommodation entry of bogus sales of Rs. 18,29,000/- was ascertained that. Avinash Jha is managing and controlling multiple companies and concerns, which were not carrying out any geuine business activity. These concerns were involved into activity of providing accommodation entries of various kinds such as purchase entries and sale entries etc. The Assessee Shri Deepak Kumar is one of the beneficiaries who has taken bogus sales entries of Rs. 18,29,000/- to one of the concerns of Shri Avinash Jha i.e. Zhongmao International Project Pvt. Ltd.
The assessment was completed u/s 143(3) read with section 144B of the Income Tax Act on 11.03.2024 at total income of Rs 26,58,681/- after making addition of Rs. 11,70,560/ as unexplained credit u/s 68 of the I.T. Act, 1961 and addition of Rs. 1,28,761/ on account of unexplained expenditure u/s 69C of the I.T. Act, 1961.
Being aggrieved, the assessee filed appeal before NFAC and vide order having DIN & Order No: ITBA/NFAC/S/250/2025-26/1078006420(1) dated 30.06.2022, the appeal of the assessee is allowed deleting addition of Rs 11,70,560/-and addition of Rs 1,28,761/- by holding as under:
"The AO has completely relied on the report of the Investigation Wing. I have perused the report of the DDIT. In the statement of Avinash Jha quoted in the investigation report, there is no mention of the appellant. In any case, assessment has to independently establish the information that may be contained in the investigation report. Merely stating that "In the report of the Investigation Unit it is established the scheme of accommodation entries beyond doubt, hence there was not need to further investigate the matter"; cannot be the basis for addition it is also significant that the amount reported by as having been involved in accommodation entry is Rs. 18,29,000/- whereas the amount assessed by the AO is Rs 11.70.560."
The decision of the learned First Appellate Authority (FAA) is not acceptable in view of followings causes:
a) In view of the comprehensive and well reasoned report buttressed with ample evidences of the investigation Wing, wherein, it has been clearly held that M/s Zhongmao International Project Pvt. Ltd (hereinafter referred to as "ZIPPL) has been found to be a bogus entity. For reference, extract of the said report of Investigation Wing is placed as under:
It is pertinent to mention here that M/s Zhongmao International Projects Pvt Ltd., a company in which Sh. Avanish Jha is a Director was investigated during the post search proceedings on M/s CCTEB India Private Limited, (D.0.5 07.10.2020) and found to be bogus 7 ITA No.- 5269/Del/2025 Deepak Mi al Furthermore, in the said report, it has been clearly mentioned that Shri Avinash Jha, Director of ZIPPL has used the same to provide bogus entries/accommodation entries supported by evidences and accordingly, after properly appreciating the same, sales as made to this company by assessee under consideration has been rightly held as bogus.
b) The contention of assessee before the FAA of furnishing quantitative details of stock items, is to be discarded as in Tax Audit Report, it is clearly mentioned by Tax Auditors that 'Proper stock records are not maintained by the assessee. The relevant part of Tax Audit Report of AY 2022-23 is produced as under:
Furthermore in Tax Audit Report in clause 35ja), no quantitative details of principal items of goods traded have been added. The relevant part of the Tax Audit Report is placed as under:
c) In invoices raised by assessee to ZIPPL significantly, therein there is no mention of brand of cement and quantitative details of goods traded This amply shows the unrealness of the said invoices. For reference, relevant part of one of the invoices is placed as under:8
ITA No.- 5269/Del/2025 Deepak Mi al
d) In so called e-way bills there is no mention of transporter id or name. The relevant part of one of the e-way bills is placed as under:
e) Despite specific request in respect of transactions with ZIPPL' not a single freight bill has been furnished, though for other transactions, certain freight bills have been furnished but the same does not justify specific transactions of assessee with ZIPPL.
f) The stand of assessee is contradictory as vide reply dated 29.11.2023, during the assessment proceedings, it has been submitted that goods were transported by truck and tractors owned by assessee and whereas freight bills as submitted were mainly in the name of M/s Jai Nirvana Road Carriers and other entities which are not owned by assessee.
g) Significantly, for alleged transactions with ZIPPL' it has been stated that cement was transported by truck and tractors owned by the sole proprietorship firm of assessee, it has observed that, no truck or tractors have been declared in Tax Audit Report as owned by assessee's sole proprietorship firm.
h) It has been verified from Vahann app that vehicles numbers mentioned on e-way bills are agricultural tractors and to transport the alleged cement bags to about 90 kilometre away on agricultural tractors is improbable particularly in the absence of delivery challans, weighing bridge receipts etc. as specifically called for.9
ITA No.- 5269/Del/2025 Deepak Mi al
i) It is seen in the invoices there is no mention of receipt of goods or payment of freight etc.
j) Allegedly cement has been stated to be sold by assessee to 'ZIPPL, however, business code in Tax Audit Report & ITR has been shown as 09027 & 09028 & same is not pertaining to cement or construction material.
k) Assessee has made reliance on generation of e-way bills. Here, it is mentioned that its mere existence does not validate a transaction, especially in the case of a bogus billing. It is well known that bogus billing (also known as fake invoicing or circular trading) involves issuing invoices without the actual supply of goods or services. In such cases, e- way bills might be generated to create a false impression of genuine transactions and to facilitate fraudulent Input Tax Credit (ITC) claims. In the report received in this case there is mention of all these things. Various Hon'ble Courts and Tax authorities have repeatedly held that merely possessing an e-way bill, tax invoice, or even proof of payment through banking channels is insufficient to prove the actual physical movement of goods and the genuineness of a transaction. The emphasis is on proving the actual receipt of goods or services. This is crucial for claiming Input Tax Credit (ITC) under Section 16 of the CGST Act, 2017. It is worth mentioning that in cases where the genuineness of transactions is doubted, authorities and courts expect taxpayers to provide additional evidence beyond just the e-way bill and invoice. This can include a) Proof of freight charges paid b) Acknowledgement of taking delivery of goods c) Toll receipts d) Evidence of warehousing e) Verification of the vehicle used for transport. All of these aspects are missing in this case.
l) It is significant to mention that Jurisdictional Hon'ble Allahabad High Court in the case of M/s Anil Rice Mill Versus State of U.P. And 2 Others in writ Tax No 886 of 2023 on 14.08.2024 has held that the tax invoices, e-way bills are not enough to avail Input Tax Credit (ITC) under Goods and Service Tax (GST) The bench of Lordship Justice Piyush Agrawal has observed that the petitioner in that case has only brought on record the tax invoices, e-way bills, and payment through banking channel, but no such details such as payment of freight charges, acknowledgement of taking delivery of goods, toll receipts and payment thereof has been provided. Thus, in the absence of these documents, the actual physical movement of goods and genuineness of transportation as well as transaction cannot be established. The Hon'ble Jurisdictional High Court while dismissing the petition held that primarily burden of proof for claiming the input tax credit is upon the dealer to furnish the details of selling dealer, vehicle number, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. to prove and establish the actual physical movement of the goods. Submitting a tax invoice, e-way bill, payment details is not sufficient.
m) The impugned transactions in itself shows that the same have not been taken place in normal course of business as lump sum amount of Rs 20 lacs have been shown to be received as early as on 29.01.2021 and part of cement shown to be supplied to said company on 31.01.2021 and thereafter after a lag of more than 4 months in June 2021 between period of 12.06.2021 to 25.06.2021. There is no other transaction with such a lag during the year under consideration. Cement is not a scarce commodity for which an entity would give advance of Rs 20 lacs and then would wait for such a long period for 10 ITA No.- 5269/Del/2025 Deepak Mi al goods to be supplied from such a far-flung distance of about 90 kms away, when such a commodity is available in Noida at competitive prices. It clearly appears that accommodation entry has been received in round figure of Rs 20 lacs and then bogus sales have been debited squaring of such accommodation entry to last paisa spreading the same to two financial years.
n) The FAA has given the impression in its order that the AO has merely relied on the report of Investigation Wing. It is to be appreciated that in Income Tax Department, Investigation Wing' has been assigned task to detect organized tax evasion like of extending/receiving accommodation entries and if an AO with an independent mind after going through records as in the case is concurring with findings of Investigation Wing it cannot be termed as merely reliance on the Wing's report rather at the best, it is to be treated as sharing of satisfaction with Investigation Wing. Respectfully, it is submitted for appreciation at the end of the appellate authorities & Hon'ble Court that for an AO particularly in faceless regime and otherwise too, it is really hard and almost impossible to detect an organized tax evasion like of extending/receiving accommodation entries at his end with concrete findings as for busting these sorts of tax evasion & economic crimes, considerable amount of investigation is required and mandate and resources for doing the same is with Investigation Wing. It is submitted with anguish that for the kind consideration of Hon'ble Courts that as a great detriment to the cause of revenue as soon as the report of investigation report of Wing comes into scene, disregarding its meticulousness, there come the cut and dried salvo of 'borrowed satisfaction' invariably from the learned counsels of assessee's to undo the entire assessment(s). In case, the AO has applied his mind to said report and finding the same as more than credible held that tax has been evaded as in the case under consideration then it is great injustice to delete additions on venial and flimsy grounds of reliance on report of Investigation Wing, particularly in a case where assessee failed to provide requisite documents as discussed and other material findings as pointed out. However, it is worth mentioning that in many cases, Hon'ble Courts have held reliance on investigation reports of Investigation Wing as valid for instance sake in case Priya Blue Industries (P.) Ltd Vs ACIT [2021] 130 taxmann.com 492 (Gujarat), Hon'ble High Court, Gujarat has laid down that where Assessing Officer had reason to believe that income chargeable to tax had escaped assessment as assessee was beneficiary of accommodation entries and basis for formation of such belief were several inquiries and investigation by Investigation Wing that there had been escapement of income of assessee, reopening and addition was justified. Notably, SLP against this order is also dismissed [2022]138 Taxmann.com 69(SC).
o) The FAA has not appreciated the facts properly in observing that the 'the amount reported by as having been involved in accommodation entry is Rs. 18,29,000/- whereas the amount assessed by the AO is Rs. 11,70,560.' as part of the bogus sales booked in preceding assessment year.
The order of NFAC is not acceptable due to the facts and legal aspects narrated above. Although the tax effect involved in this case of Rs. 10,13,470/-, which is below the monetary limit prescribed by the CBDT's Circular No. 09/2024 dated 17.09.2024 for 11 ITA No.- 5269/Del/2025 Deepak Mi al filing appeal before Hon'ble ITAT, further appeal in this case is recommended as the instant case is covered by exception clause(h) of para 3.1.of CBDT's circular 05/2024 dated 15.03.2024.
(emphasis supplied by us) 7.1 The facts as brought on record by the PCIT, especially the duly highlighted by us has not been examined by the Ld. CIT(A), while passing his order and deleting the additions made by the AO. Examination of these facts are necessary to arrive at the conclusion regarding the genuineness of the claim of the assessee regarding its purchase of cement amounting to Rs. 11,70,560/- from ZIPPL and the alleged payment of commission of Rs. 1,28,761/- by the AO for the above bogus purchase.
We, therefore, set aside the order of the Ld. CIT(A) and restore the matter to his file to adjudicate the issue afresh keeping in view of the facts brought on record by the Ld. PCIT, Ghaziabad as referred above, after giving a reasonable opportunity of being heard to the assessee and in accordance with law.
7.2 Further, the assessee will also be at liberty to furnish any details / evidence in support of his claim.
8. In the result, the appeal of the Revenue is allowed for statistical purposes.
Order pronounced in the open court on 08.04.2026.
Sd/- Sd/- [RAJ KUMAR CHAUHAN] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 08.04.2026. Pooja. 12 ITA No.- 5269/Del/2025 Deepak Mi al Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, 13