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Facts
The assessee made cash deposits of Rs. 81,39,504/- in a bank account. The Assessing Officer initially added 8% of this amount to the assessee's income, treating the deposits as accommodation entries and commission income. The CIT(A) upheld the addition but reduced the estimated commission income to 0.75%, following a decision in the assessee's own case for A.Y. 2009-2010, which had also been appealed to the Tribunal.
Held
The Tribunal noted that for the preceding assessment year 2009-2010, a coordinate bench of the Tribunal had already deleted a similar addition. Finding no difference in the facts for the impugned assessment year, the Tribunal followed its earlier decision and deleted the addition made by the Assessing Officer and confirmed by the CIT(A).
Key Issues
Whether the addition made on account of cash deposits, treated as accommodation entries and estimated commission income, was justified, especially when a similar addition for a preceding assessment year had been deleted by the Tribunal.
Sections Cited
131, 143(3), 147
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI SANJAY AWASTHI
आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order dated 12.03.2024, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No.ITBA/NFAC/S/250/2023- 24/1062450159(1), for the assessment year 2010-2011. 2. Shri Somnath Ghosh, Advocate appeared on behalf of the assessee. Shri Manas Mondal, Sr. DR appeared on behalf of the revenue. 3. It was the submission of the ld. AR that in the course of assessment, the Assessing Officer had made an addition of Rs.81,39,504/- representing 8% of the cash deposits in the bank account of the assessee. It was the submission that in the appeal, the ld. CIT(A) had followed the decision of his predecessor in assessee’s own case for A.Y.2009-2010 and held that 0.75% was liable to be treated as income of the assessee. It was the submission that the ld. CIT(A) also observed that the cash deposit in the bank account were in the nature of accommodation entries and the assessee has earned commission income thereon. Consequently, in the impugned assessment year the ld. CIT(A) has followed the decision in assessee’s own case for A.Y.2009-2010 by the earlier CIT(A) and directed the Assessing Officer to estimate the income of the assessee at 0.75%. It was the submission that for the earlier assessment year the assessee has filed an appeal before the coordinate bench of the Tribunal and the coordinate bench of the Tribunal in order dated 17.03.2025 deleted the addition holding as under :- 04. In the appellate proceedings, the Id. CIT (A) after following the decision of the various co-ordinate Benches partly allowed the appeal by deleting the addition to the tune of ₹1,35,93,750/- and sustaining the addition to the extent of ₹14,06,250/- at 0.75% of total accommodation entries provided. Now, the assessee is in appeal before us challenging the part confirmation of the order of the Id. Assessing Officer.
5. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly the cash was deposited in the assessee's bank account in ICICI bank account which belonged to Shri Devesh Upadhyaya, who opened the bank account In assessee's name by using his PAN and operated the same for providing accommodation entries. Mr. Devesh Upadhyaya, deposited 18.75 cores cash in the said bank account and the same was given to various parties as accommodation entries. We have also examined the statement recoded u/s 131 of the Act by the Id. AO of the said person and while answering to question no.11 to 18, Shri Devesh Upadhyaya admitted that the cash deposited in the assessee's bank account belonged to him and he used the bank account for giving accommodation entries. We even note that in his( Shri Devesh Upadhyaya) assessment framed u/s 143(3) of the Act, a copy of which is available at page no. 14 to 16 of the paper book, his Income was assessed by the Id. AO at the rate of 0.10% of the total cash deposits in the order dated 16.03.2016, passed u/s 143(3) read with section 147 of the Act. Considering these facts and circumstances, we are of the view that the addition is partly confirmed by the Id. CIT (A) in the hands of the assessee to the tune of ₹1,06,250, is uncalled for and unwarranted and cannot be sustained as this income has been assessed in the hands of Shri Devesh Upadhyaya. Accordingly, we set aside the order of the Id. CIT (A) on this issue and direct the Id. AO to delete the deletion.
It was the submission that as the coordinate bench of the Tribunal has for the assessment year 2009-2010, deleted the addition on similar grounds, therefore, the addition made in the year under consideration should also be deleted.
In reply, ld. Sr. DR vehemently supported the orders of the ld. Assessing Officer and ld. CIT(A).
We have considered the rival submissions. A perusal of the facts of the present case clearly shows that the ld. CIT(A) has followed his predecessor’s order for assessment year 2009-2010, thereby directing the Assessing Officer to estimate the addition at 0.75%. The order of the ld. CIT(A) for A.Y.2009-2010 was a subject matter of appeal before the coordinate bench of the Tribunal in and the Tribunal vide order dated 17.03.2025 has categorically deleted the addition for the assessment year 2009-2010. As no difference in the facts have been shown, respectfully following the decision of the coordinate bench of this Tribunal in assessee’s case for the assessment year 2009-2010, the addition as made by the Assessing Officer and as confirmed by the ld. CIT(A) for the impugned year, stands deleted.