SURAJNATH BHIMNATH SIDH,SURAT vs. DCIT, CENTRAL CIRCLE-1, SURAT

ITA 1211/SRT/2025Status: DisposedITAT Surat07 April 2026AY 2018-193 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that a commission of 0.35% would justify the profit earned by the assessee in the business of cheque discounting. The AO was directed to determine the profit at 0.35% on the cash deposit amount.

What were the facts?

The assessee's appeal concerned an addition of Rs. 17,53,885/- made by the Assessing Officer (AO) on alleged huge profit from cheque discounting. The assessee admitted to providing accommodation entries by accepting cheques and giving cash.

What were the issues?

The primary issue was the quantum of profit to be considered on accommodation entry services involving cheque discounting. The assessee argued for a lower commission rate than what was assumed by the AO.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT

Before: DR. BRR Kumar & Ms. Suchitra Kamble

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT “SMC” BENCH, SURAT Before: DR. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member

ITA No: 1211/SRT/2025 Assessment Year: 2018-19 Surajnath Bhimnath Sidh The DCIT 1036, Jash Market, Central Circle-1, Ring Road Vs Surat Surat-395002 PAN: ACMPS5547A (Appellant) (Respondent) Assessee Represented: Shri Kiran K Shah, CA Revenue Represented: Shri Ashish Kumar, Sr. D.R.

Date of hearing : 23-01-2026 Date of pronouncement : 07-04-2026 आदेश/ORDER PER : SUCHITRA KAMBLE, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (hereinafter referred to as ‘CIT(A)’), dated 03-09-2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2018-19.

The assessee has raised the following grounds of appeal:

I.T.A No. 1211/Srt/2025 A.Y. 2018-19 2 Surajnath Bhimnath SidhVs. DCIT

1 The Ld. CIT(A) grossly erred in confirming addition of Rs.17,53,885/- (22,40,565 – 4,86,680) in respect of alleged huge profit on commission of draft/cheques discounting on discussed in para 6.4 of the appeal order.. 2 The appellant reserve right to add, alter and withdraw any grounds of appeal.

The Ld. A.R. pointed out that the ld. A.O. made addition of Rs.17.53 lakhs on the deposits found in the bank account being the 1% of the turnover, the assessee has duly accepted that the assessee was providing accommodation entry and accepting cheques from various persons by handing over the cash. It is prayed that in the business of cheque discounting, the amount of the commission charged is 0.25% to 0.5%. Hence it is prayed that the amount charged by the A.O. may be reduced to 0.25%.

We have gone through the record before us and as per the various precedents held that commission @ 0.35% would justify the profit by the assessee. Hence, keeping in view the facts, we determine the total profit @ 0.35% . Accordingly, the A.O. is directed to determine the profit @ 0.35% on the amount of cash deposit of Rs.17,53,885/-.

In the result, the appeal of the Assessee is partly allowed.

Order pronounced in the open court on 07-04-2026

Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) VICE PRESIDENT True Copy JUDICIAL MEMBER Ahmedabad : Dated 07/04/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue

I.T.A No. 1211/Srt/2025 A.Y. 2018-19 3 Surajnath Bhimnath SidhVs. DCIT 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत

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