M/S. POORN MERCANTILE PVT LTD,MUMBAI vs. WD 4(3) (1)/ AO NFAC, DELHI

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ITA 2408/MUM/2021Status: DisposedITAT Mumbai31 May 2022AY 2012-135 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found no infirmity in the lower authorities' order taxing 3% of the circular trading/accommodation entry provided by the assessee. The assessee failed to demonstrate the actual percentage of income earned.

What were the facts?

The assessee company, engaged in trading and investment, was found to be part of circular trading of funds amounting to Rs. 13 lacs. The Assessing Officer estimated commission income at 3% on this amount and made an addition of Rs. 39,000.

What were the issues?

Whether the addition of Rs. 39,000 as commission income on circular trading of funds is justified, and whether the lower authorities erred in sustaining this addition.

Which sections of the Income-tax Act were involved?

Section 68,Section 37,Section 143(1),Section 148,Section 133(6),Section 143(3),Section 147,Section 234B,Section 234C,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Respondent: Shri Himanshu Sharma, DR
Hearing: 24.05.2022Pronounced: 31.05.2022
1.

This appeal is filed by the Poorn Mercantile Pvt. Ltd. against the order passed by the Commissioner of income- tax (Appeal) [the learned CIT(A)], National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2012- 13. The assessee has raised solitary ground of sustaining an addition of Rs.39,000/-.

2.

The assessee has raised the following grounds of appeal:-

“On the facts and circumstances of the case and in law the Ld. Authorities below, has erred in sustaining an addition of Rs. 39,000 u/s 68/37 of the IT Act, which was excessive, and the reasons assigned for doing so was wholly wrong, irrelevant to the facts of 2) On the facts and circumstances of the case and in law, the A0 has erred in levying the interest u/s 234B and 234C of the IT which was wholly wrong, and against the provisions of Income Tax Act, 1961 and rules made there under.

3) On the facts and circumstances of the case and in law, the AO has erred in initiating the penalty proceedings u/s 271(1)) of the Income Tax Act, 1961 which were wholly wrong, irrelevant, and not in accordance with the facts and circumstances of the case as no income is concealed nor any inaccurate particulars were furnished.

4) The appellant craves leave to add, alter, modify and delete all or any of the aforesaid grounds of appeals on or before the date of hearing.”

3.

The fact shows that the assessee is a private limited company engaged in the business of trading and investment. The assessee filed return of income on 13th March, 2013 declaring total income of Rs.770/-. This return was processed under section 143(1) of the Act. Subsequently, information was received that certain income chargeable to tax has escaped assessment and therefore, notice under section 148 of the Act was issued on 30th March, 2019. In response to that notice, assessee

4.

Assessee preferred the appeal before the learned CIT(A) who dismissed the appeal of the assessee on merits. Therefore, now assessee is aggrieved against the order of the learned CIT(A) and has preferred appeal before us.

5.

Despite notice to the assessee, none appeared on behalf of the assessee. Therefore, the issue is decided on merits of the case.

6.

The learned Departmental Representative vehemently supported the order of the lower authorities.

7.

We have carefully considered the rival contention and perused the orders of the lower authorities. To the extent of accommodation entry of Rs.13 lacs received by the assessee from Deepsikha suppliers Pvt. Ltd and Beauty suppliers Pvt. Ltd. The learned Assessing Officer considered assessee to be merely accommodation entry provider and taxed the commission income at the rate of 3% on the above sum. The assessee could not show what is the percentage of income, it is earning on such accommodation entries. The learned CIT(A) also confirmed the same. We also found that there is no infirmity in the order of the lower authorities in taxing 3% of the circular trading/ accommodation entry provided by the assessee. In view of this, we confirm the order of the lower

8.

In the result, appeal filed by the assessee is dismissed.

Order pronounced in the open court on 31.05.2022.

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