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Facts
The assessee is aggrieved by the lower authorities' findings treating its cash deposits and credit entries amounting to Rs. 1,82,90,000/- and Rs. 8,86,03,551/- as unexplained money. The Revenue argued that the assessee failed to prove the source of these impugned cash credits and deposits. The Assessing Officer had previously treated the assessee as an accommodation entry provider.
Held
The Tribunal noted that the lower authorities themselves had treated the assessee as an accommodation entry provider in a preceding assessment year. To meet the interest of justice, the Tribunal directed the assessee to be assessed at a rate of 1% for its credits and deposits, maintaining judicial consistency but with a rider that it would not be treated as a precedent. Regarding Section 115BBE, it was held that the provision applies only to transactions done on or after 01.04.2017, and the assessee is to be assessed under normal provisions.
Key Issues
Whether cash deposits and credit entries were unexplained money and if the assessee was an accommodation entry provider.
Sections Cited
143(3), 69A, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara&
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1056610146(1) dated 27.09.2023, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file persued.
It emerges during the course of hearing that the assessee/appellant is aggrieved against both the learned lower authorities’ respective findings treating it’s cash deposits and credit entries in M/s Axis Bank amounting to Rs.1,82,90,000/-
Moral Alloys Pvt. Ltd. and Rs.8,86,03,551/-, respectively as unexplained money u/s 69A r.w.s. 115BBE of the Act, in assessment order dated 16.12.2019 as upheld in the lower appellate discussion.
Both the parties vehemently reiterate their respective stands against and in support of the impugned addition. The Revenue more particularly argues that it was the assessee’s bounden duty only to plead and prove source of it’s impugned cash credit(s) as well as deposits; as the case may be, in both the lower proceedings. Our attention is further invited to the Assessing Officer’s assessment order in assessee’s case itself dated 16.12.2019 treating the assessee as an accommodation entry provider both regarding it’s corresponding sales as well as purchases; as the case may, assessed @1% commission income in A.Y. 2012-13 as well.
Learned counsel on the other hand submits that the assessee is infact a company stated to be engaged in Metal Trading business whose impugned cash credit and deposits are nothing but regular business sales only which could not have been treated as unexplained in both the lower proceedings.
We have given our thoughtful consideration to the foregoing rival submissions and find no reason to accept either parties stand in entirety. We make it clear that the learned lower authorities had themselves treated the assessee as an Moral Alloys Pvt. Ltd. accommodation entry provider in the preceding assessment year 2012-13 assessment (supra). That being the case, we are of the considered view that larger interest of justice would met in case the assessee/appellant herein is directed to be assessed at the very rate 1% only (qua it’s credits & deposits) by adopting judicial consistency subject to a rider that the same shall not be treated as a precedent. We order accordingly. Necessary computation shall follow.
So far as assessee’s assessment under Section 115BBE is concerned, we quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only.