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Facts
The assessee filed appeals against the CIT(A)'s order confirming an addition of Rs. 5,53,668/- made by the AO as commission income at 2% on total bank credit entries, treating them as accommodation entries based on findings in the case of Jignesh Shah.
Held
The Tribunal noted that the assessee had not misused the opportunity given for hearing and remanded the matter back to the Ld. CIT(A) for a fresh examination of the issue. The appeals were allowed for statistical purposes.
Key Issues
Whether the addition made on account of commission income as accommodation entries is justified when the same income was offered by another party and taxed, leading to potential double taxation, and whether the AO conducted proper inquiries.
Sections Cited
147, 148, 143(3), 245D(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
PER BENCH: Delay Condoned.
These appeals have been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 28.03.2023 for A.Ys. 2012-13 to 2014-15. Since the common facts and issued are involved for all the years under consideration, all the cases are taken up together.
The Assessee has taken the following grounds of appeal:-
“I. Addition on account of commission income @ 2% on total bank credit entries on account of facilitating accommodation entries to various parties - Rs.5.53,668/-
ITA Nos. 989 to 991/Ahd/2024 Asst.Years –2012-13 to 2014-15 - 2–
The ld. CIT(A) has grievously erred in law and on facts in confirming the addition of Rs.5,53,668/- made by the AO being 2% commission income earned on total credit entries appearing in the bank accounts of the company aggregating to Rs.2,76,86,405/- treating them as in the nature of accommodation entries based on the findings in the case of Jignesh Shah in the course of search in his case without proper consideration and appreciation of the facts of the case and the submissions filed before the AO. In view of facts of the case, the impugned addition requires to be deleted.
The appellant states that notwithstanding the above fact, the ld. AO and the CIT(A) have failed to appreciate the fact that since the entire transactions in the bank accounts of the appellant company having been owned up by Jignesh Shah and the income earned therefrom in form of commission income for providing accommodation entries through such bank accounts, which interalia, includes the amount aggregating to Rs.2,76,86,405/- being credit entries in the bank accounts having already been offered by him in the application filed before the Hon'ble Settlement Commission, Mumbai and which has been finally settled by the Interim Board of Settlement vide order u/s.245D(4) of the Act dated 13/12/2023, while passing assessment order in case of Jignesh Shah, the addition made in the case of the appellant on the basis of the same bank accounts does not survive and deserves to be deleted, more particularly when the said income having already been taxed in the hands of Jignesh Shah resulting in double taxation.
The appellant further states that the department has also taxed the transactions in the bank accounts of the company in the hands of the beneficiaries and hence it is a case of multiple taxation of income from the same transactions.
The ld. CIT(A) has also erred in not appreciating the fact that the AO has failed to carry out necessary cross enquiries with DCIT, Central Circle-1(2), Ahmedabad being the AO of Jignesh Shah to ascertain the present prevailing correct facts before making the impugned addition while mechanically relying upon the information received. Thus, the impugned addition in the hands of the appellant without consideration and verification of the said fact is wholly unjustified and bad in law. The appellant company craves leave to add, amend, alter, modify or delete any of the above grounds and to submit additional grounds at the time of hearing of the appeal.”
Ld. CIT(A) has passed an ex-parte order going to non-furnishing of the supporting evidences before him. The Ld. CIT(A) has also issued notices on 26.08.2020, 11.09.2020, 22.02.2023 and 13.03.2023. In pursuance to the above notices the assessee did not submit any evidences/details in support of his case.
ITA Nos. 989 to 991/Ahd/2024 Asst.Years –2012-13 to 2014-15 - 3–
Before us, the Ld. Counsel for the assessee submitted that giving an opportunity for due compliances would be made before the Ld. CIT(A). He also submitted that some of the evidences have been filed before the Ld. CIT(A) which have not been considered while passing the order.
Both the parties fairly submitted that the assesse can be given an opportunity to represent his case before Ld. CIT(A). Hence, the matter is being remanded back to the Ld. CIT(A) for examining the issue afresh and issue notice of hearing to the assesse, the assesse should not misuse the opportunity given for hearing and shall comply with the notices issued without fail.
Since, common facts and issues for consideration are arising for the rest assessment years under consideration, the appeal of the assessee are allowed for statistical purposes for A.Ys. 2013-14 and 2014-15 as well.
In the combined result, all appeals of the assesse are allowed for statistical purpose.
The order is pronounced in the open Court on 20.02.2025 (SIDDHARTHA NAUTIYAL) VICE PRESIDENT Ahmedabad; Dated 20/02/2025 TANMAY, Sr. PSITA Nos. 989 to 991/Ahd/2024 Asst.Years –2012-13 to 2014-15 - 4–
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant
""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.