MAHANIVESH STOCK AND SHARES PVT. LTD.,NEW DELHI vs. ITO, WARD- 16(1), NEW DELHI

The grievance of the revenue read as under :-

The grievance of the assessee read as under :-

The conspectus reading of grounds of both the appeals show that the underlying facts in the issues are identical, therefore, both the appeals are disposed of by this common order for the sake of convenience and brevity.

As per information available the AO came to know that the Bank account of the assessee in Axis Bank reflects huge deposits amounting to Rs.33.47 crores are made. On analysis of the deposits the AO noticed that the account in Axis Bank was opened on 14.11.2009 and the assessee has following deposits during the period under consideration :-

Invoking the provisions of section 68 of the Act and drawing support from various judicial decisions discussed in the assessment order the AO made addition of Rs.313650000/- u/s. 68 of the Act.

Assessee agitated the matter before the CIT(A) it was strongly contended that the assessee is in the business of providing accommodation entries and, therefore, only commission earned from providing accommodation entries should be added.

Strong reliance was placed in a group of cases which included Bhawani Portfolio Private Limited in and 6350/2016. The CIT(A) was convinced with the reliance on the decision of this Tribunal (supra) and held as under :-

We find that the aforesaid order of this Tribunal was challenged by the revenue before the Hon’ble High Court of Delhi and the Hon’ble High Court of Delhi in ITA 158/2020 and CM APPL. 7946/2020 and ITA 163/2020 and CM APPL. 8018/2020 has considered the challenge of the revenue as under :-

Respectfully following the decision of the Hon’ble High Court of Delhi (supra) we decline to interfere with the findings of the CIT(A). The appeal of the revenue is accordingly dismissed.

In so far as the appeal of the assessee is concerned we are of the considered opinion that in line with the decision of this Tribunal (supra) we direct the AO to restrict the addition in respect of commission income @ 0.5% on the amount of accommodation entry given to parties outside the group after due verification and after affording a reasonable opportunity of being heard to the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purpose and that of the revenue is dismissed.

Decision announced in the open court on 03.08.2022.