Loading judgment…
Facts
A search action revealed an entry operator providing accommodation entries to various entities. The Assessing Officer (AO) re-opened the case and made an addition based on these entries. The assessee challenged this before the Commissioner (Appeals).
Held
The Tribunal observed that the notice to the assessee was returned undelivered and proceeded ex-parte. The Tribunal found that the Commissioner (Appeals) had correctly re-computed the accommodation entries and affirmed the reduced addition.
Key Issues
Whether the Commissioner (Appeals) correctly re-computed the quantum of accommodation entries and the resultant addition when the initial notice to the assessee was returned.
Sections Cited
132, 132(4), 148, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Revenue Department against the order dated 27.09.2024, impugned herein, passed by the Ld. Addl./Joint Commissioner of Income Tax (Appeals) (in short “Ld. Addl./Joint Commissioner”) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2013-14.
At the outset, it is observed that the notice sent to the Assessee has been returned back by the Postal Department with the remarks “no such person in the address”, meaning thereby the Assessee is not situated at the address mentioned in form no.36, hence, this Court is inclined to decide this appeal as ex-parte.
Coming to the merits of the case, it is observed that a search action u/s 132 of the Act was conducted on dated 9/2/2016 in the case of Shri Vipul Vidhur Bhat who in his statement u/s 132(4) of the Act has accepted himself as an entry operator providing accommodation entries to various entities managed and controlled by him for a cash commission @1% to 4% on the amount of accommodation entries providing to various beneficiaries.
Shri Vipul Vidhur Bhat also clarified in his statement that he used to provide the accommodation entries to the Assessee as well.
3.1 Considering the aforesaid facts, reasons for reopening of the case were recorded and case was reopened for reassessment by issuing a notice u/s 148 of the Act to the Assessee. In response to such notice, the Assessee filed his return of income and provided part details such as bank statement maintained with the Bank of Baroda. On perusing said details, the Assessing Officer (in short “the AO”) found the total transactions between group entities controlled by Shri Vipul Vidhur Bhat to the tune of Rs.1,99,75,811/- (Rs.99,87,061/- in debit side and Rs.99,88,750/- in credit side) after netting of interest income and bank charges etc. and consequently, show caused the Assessee. The Assessee in response filed its reply as well as additional evidence. The AO, by considering the overall case of the Assessee, ultimately made the addition of Rs.2,05,530/- (being 2% of Rs.1,02,76,485/- alleged bogus entries) and added the same in the income of the Assessee.
The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner and filed the relevant documents. The Ld. Commissioner by considering the relevant documents, determined the accommodation entries to the tune of Rs.99,87,061/- instead of Rs.1,02,76,485/- as determined by the AO and ultimately affirmed the addition of Rs.19,97,741/- @ 2% on such amount of Rs.9987061/- and eventually, reduced the addition by Rs.5788/-.
The Revenue Department, being aggrieved, is in appeal before this Court.
Heard the Ld. D.R. and perused the material available on record. The Revenue Department has not controverted the fact that the accommodation entries were of Rs.99,87,061/- as determined the Ld. Commissioner but not of Rs.1,02,76,485/- as determined by the AO and therefore this Court is of the considered view that the Ld. Commissioner has correctly re-computed the accommodation entries and taxed the same @ 2% thereof and accordingly reduced the amount of addition by Rs.5788/-. The decision of the Ld. Commissioner is based on the consideration of the material facts and calculations and therefore need no interference of this Court.
In the result, the appeal filed by the revenue department stands dismissed.
Order pronounced in the open court on 30.01.2025.