PRINCIPLE COMMISSIONER OF INCOME TAX-3, AHMEDABAD vs OASIS JEWELS PRIVATE LIMITED
- Court
- Gujarat High Court
C/TAXAP/17/2025 JUDGMENT DATED: 21/10/2026
(GJHC240772402024)
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 17 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRZAR S. DESAI
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Approved for Reporting Yes No
✓
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PRINCIPLE COMMISSIONER OF INCOME TAX-3, AHMEDABAD
Versus
OASIS JEWELS PRIVATE LIMITED
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Appearance:
AADITYA D BHATT(8580) for the Appellant(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRZAR S. DESAI
Date : 21/10/2026
JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned Senior Standing Counsel Mr.Aaditya Bhatt
for the appellant.
2. This appeal is filed under Section 260A of the Income
Tax Act, 1961 (for short, "the Act") by the appellant-Revenue
proposing the following substantial questions of law arising out
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of the order dated 28.06.2024 passed by the Income Tax
Appellate Tribunal, Ahmedabad 'SMC' Bench, Ahmedabad (for
short, "the Tribunal") in ITA No. 302/AHD/2022 for A.Y. 2012-
13;
“(i) Whether on the facts and circumstances of the case
and in law, the ITAT erred in deleting the addition of
Rs. 12,50,000/- made by the AO on account of
accommodation entry received from M/s. Growth Capital
controlled by Dilip Shah ?
(ii) Whether on the facts and circumstances of the case
and in law, the ITAT erred in deleting the addition of
Rs. 12,500/- made by the AO on account of unexplained
commission expenses u/s 69C of the IT Act ?”
3. The brief facts of the case are that the assessee company
is engaged in the business of bullion trading and ornaments
manufacture. It filed return of income for A.Y. 2012-13 on
30.09.2012 declaring total income of Rs.13,42,000/-.
Thereafter, the case was selected for scrutiny and assessment
was finalized under Section 143(3) of the Act determining total
income at Rs. 13,78,000/- after disallowing ROC filing fees of
Rs. 36,000/-.
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4. It appears that the case was reopened under Section 147
of the Act after recording reasons and after obtaining approval
of the competent authority. The assessee filed e-return of
income on 05.08.2019 declaring total income at Rs.
13,42,000/-. Thereafter, notices under Section 143(2) and
142(1) were issued by the Assessing Officer. The Assessing
Officer passed the assessment order under Section 143(3) read
with Section 147 of the Act by making an addition of Rs.
12,50,000/- under Section 68 of the Act on the ground that
the same represents accommodation entry being unexplained,
and the Assessing Officer also made disallowance of
unexplained expense of commission at 10% of the said amount.
5. The CIT(Appeals) dismissed the appeal of the assessee.
The assessee preferred an appeal before the Tribunal
contending, inter alia, that the assessee had carried out the
transaction with Growth Capital receiving Rs. 12,50,000/- and
the reopening was made on the ground that the same was not
disclosed in the books of accounts. However, the receipt from
Growth Capital was an amount towards the sales receipt which
was recorded in the books of accounts and the same were
reflected in the accounts held with Karur Vysya Bank. The
Tribunal, therefore, after considering the fact that the receipt
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of Rs. 12,50,000/- was against the sales in the normal course
of business and the same was duly accounted for in the
audited books of accounts and considering the details provided
by the assessee, allowed the appeal filed by the assessee by
observing as under;
“ 7. Heard both the partiers and perused all the relevant
material available on record. It is pertinent to note that
the reasons recorded through the assessee's contention is
that it is vague, scanty and non-specific, yet from the
perusal of the the reasons, it can be seen that it has
given details as relates to which third party was
providing accommodation entries and which party was
associated with the transaction with assessee especially
that of Growth Capital which was not reflected in the
disclosed bank accounts and, therefore, the Assessing
Officer has rightly reopened the proceedings under
Section 147 of the Act. Thus, ground no. 1 of the
assessee's appeal is dismissed.
8. As regard to ground no.2 relating to sustaining
additions of Rs.12,50,000/-on the ground of unexplained
cash credit, the Id. AR submitted that once the
underlying amount forms part of sale duly accounted for
in the books of account and such income has been
accepted by the Assessing Officer, the very same amount
cannot be again added under Section 68 of the Act as it
will tantamount to double taxation. The Ld. AR submitted
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that all the documentary evidences related to names and
address of customers, bill numbers, dates, description of
product, weight, rate & amount, VAT and total amount
including that of confirmation of customers has been
given by the assessee during the assessment proceedings
and the same establishes that the assessee has in fact
explained the sales and the Assessing Officer has accepted
the same.
9. The Ld. DR submitted that there was cash deposits
and thus the 97% amount received was without paying
any tax. Therefore, the CIT(A) has rightly upheld the
addition related to the source of credit entries
aggregating to Rs. 12,50,000/-.
10. Heard both the partiers and perused all the relevant
material available on record. It is pertinent to note that
the amount on which the Assessing Officer has made
addition under Section 68 of the Act has been duly
explained by the assessee which forms part of sales
accounted in the books of account of the assessee which
was not disputed at any juncture by the Assessing
Officer. In fact, the Assessing Officer has accepted such
income and, therefore, the contention of the Id. AR that
the same amount cannot be again added under Section
68 of the Act is justifiable as the assessee has given
details related to sales, profit element in such receipts
has already been offered to tax and income declared by
the assessee was accepted by the Assessing Officer. Thus,
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the amount cannot be treated as unexplained cash
credits. In fact, the Assessing Officer has not doubted the
corresponding purchase/quantitative details and, therefore,
the addition made by the Assessing Officer is not
justifiable. Thus, ground no.2 is allowed.”
6. The Tribunal has also allowed the appeal of the assessee
so far as the 10% of the amount of Rs.12,50,000/- added by
the Assessing Officer under Section 69C of the Act by
observing as under;
“11. As relates to ground no.3, the Ld. AR submitted
that the commission paid for SO called accommodation
entry will not be suffice as the addition under Section 68
allegedly made by the Assessing Officer has been very
well explained by the assessee through documentary
evidences and, therefore, the question of commission does
not arise in the present case. In alternate, the Ld. AR
submitted that the total turnover of the assessee is
Rs.520,64,77,230/- and the assessee would not take entry
of Rs 12,50,000/-, i.e. 0.02% of total turnover. Thus,
even in view of material concept, the impugned addition
is not justified and commission expense at 0.10% under
Section 69C will not be justifiable.
12. The Ld. DR relied upon the Assessment Order and
the order of the CIT(A).
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13. Heard both the partiers and perused all the relevant
material available on record. It is pertinent to note that
the very addition of Rs.12,50,000/- under Section 68 of
the Act does not survive as per the findings given
hereinabove and, therefore, the question of commission
expenses will also be not arisen at this juncture. Hence,
ground no.3 is allowed.”
7. In view of the above finding of facts recorded by the
Tribunal, and more particularly when the Tribunal has
observed on the basis of facts that the Assessing Officer has
made addition under Section 68 of the Act of Rs.12,50,000/-
which has been duly explained by the assessee forming part of
the sales accounted in the books of account of the assessee,
and the same was never disputed by the Assessing Officer. The
Tribunal, therefore, has rightly concluded that the amount of
sales which is already accepted as income by the Assessing
Officer could not have been added under Section 68 of the
Act, as the assessee has furnished details related to sales profit
element in such receipts which have been offered to tax.
8. In view of the above findings of fact, we are of the
opinion that there is no legal infirmity in the impugned order
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of the Tribunal, no question of law, much less any substantial
question of law, arises from the order of the Tribunal.
Therefore, the appeal is accordingly dismissed.
(BHARGAV D. KARIA, J)
(NIRZAR S. DESAI,J)
BHAVIN MEHTA
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