RAM PRAKASH BHATIA,NEW DELHI vs. ACIT CENTRAL CIRCLE- 05, NEW DELHI

Since, the issues involved in all these appeals are identical, they were heard together and being adjudicated by a common order.

In following grounds have been raised by the assessee: to 189/Del/2020

A survey u/s 133A of the Income Tax Act, 1961 was carried out on the assessee on 08.08.2014. During the survey, the statement of the assessee has been recorded u/s 131(1A) of the Act wherein the assessee has confessed that he has been operating various proprietary concerns and firms which are used to give accommodation entries to various entities. The total amount of entries given are as under:

During the statement, the assessee has submitted the list of proprietary concerns and firms through which the accommodation entries have been given to various concerns which are as under:

Delhi Traders 2. Jai Bharat Foods 3. Rishabh Foods 4. Mohit Trading 5. Chaudhary & Company (My wife’s concern) to 189/Del/2020 4 Ram Prakash Bhatia 6. Chaudhary Traders 7. Ganesh Trading Company 8. Rama Traders 9. Ram Prakash Enterprises 10. Ram Prakash Bhatia 11. Neha Enterprises 12. Prakash Food 13. Shri Bajrang Food 14. Punjab Food 15. Bajrang Corporation 16. Shiva Store 17. Pankaj Market Ltd.

The entire modus operandi has been explained by the assessee and also examined by the Income Tax Department, the details of which are part of the Assessment Order which are reproduced in this order.

The Revenue authorities issued notice u/s 148 which has been duly complied by the assessee. The assessee has disclosed commission of 0.15% i.e. @ Rs.150 per one lakh of accommodation entry provided. The revenue authorities have accepted the percentage of commission and determined the commission @ 0.15% on all the credits appearing in the bank accounts through which the entries have been routed multiple times. For the sake of ready reference, the Assessment Order containing the statement of the assessee, the entities involved and the modus operandi is reproduced below:

The main grievance of the assessee before us are that the contra entries have not been considered and certain accounts which do not belong to the assessee have also been considered for calculation of the commission amount.

None appeared on behalf of the assessee.

The ld. DR has argued that the commission of 0.15% has been determined after taking into consideration, the multiple entries of the same amount routed through different accounts. It was argued that otherwise the normal commission rate determined by the Tribunals and High Courts in a number of cases ranged from 1.5% to 3% on the accommodation entries provided.

We have gone through the statement of the assessee recorded u/s 131(1A), the bank accounts operated by him which are in his own name and which are in the name of others. Keeping in view, the entirety of the accommodation entries, we do not hesitate to hold that the commission earned by the assessee by using the bank accounts in the name of other persons also liable to be taxed in the hands of the assessee only as the assessee is the operator and the beneficiary of to 189/Del/2020 18 Ram Prakash Bhatia these accounts and these accounts standing in the name of other persons have also been undoubtedly used for giving accommodation entries. Thus, the plea of the assessee that the commission cannot be charged pertaining to the accounts doesn’t belong to the assessee is hereby dismissed. With regard to multiple routing of the amounts among various accounts, we are of the opinion that the percentage of commission charged @ 0.15% instead of the normal 1.5% takes care of such multiple routing of entries upto 10 times.

Keeping in view, the entire facts of the case, we hereby hold that the appeals of the assessee on this ground are liable to be dismissed.

In the result, the appeals of the assessee are dismissed. Order Pronounced in the Open Court on 13/07/2022.