Facts
The assessee filed two appeals for assessment years 2013-14 and 2016-17 against orders confirming additions made under sections 147/144 of the Income-tax Act. The lower authorities had assessed the assessee as an accommodation entry provider for transactions of Rs. 5,12,20,000/- (treated as unexplained money u/s 69A) and Rs. 27,00,000/-.
Held
The tribunal upheld the treatment of the assessee as an accommodation entry provider. For AY 2013-14, the impugned additions were to be assessed at 1% of the accommodation entries. For AY 2016-17, the addition of Rs. 27,00,000/- was confirmed only to the extent of Rs. 27,000/- (1% of the amount).
Key Issues
Whether the assessee was correctly identified as an accommodation entry provider; and determination of the appropriate percentage for addition on accommodation entries.
Sections Cited
147, 144, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R PER SATBEER SINGH GODARA, JM: These assessee’s twin appeals & 3690/Del/2024, for assessment years 2013-14 & 2016-17, arise against separate orders of Commissioner of Income Tax (Appeals)-26, New Delhi’s DIN and order no.
ITBA/APL/M/250/2024-25/106565082(1), dated 13.06.2024, in case no. 10119/2012-13 for A.Y. 2013-14; and DIN and order no. ITBA/APL/M/250/2024- 25/1065672421(1), dated 14.06.2024, in case no. 11103/2015-16 for A.Y. 2016-17, respectively, in proceedings u/s 147 read with section 144 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’. proceeded ex parte. For the sake of convenience both these appeals are taken up for hearing and disposed of by the instant common order.
It emerges during the course of hearing with the able assistance coming from the Revenue side that both the learned lower authorities in their respective orders, in former assessment year 2013-14, have assessed the assessee as an accommodation entry provider for sale figures of Rs. 5,12,20,000/- involving M/s Paras Gold and treated the similar figures as unexplained money u/s 69A; and of Rs. 27,00,000/- involving M/s Faith Jewellers allegedly as per directions of Shri Naval Kishr Goyal, assessment year wise, respectively.
The Revenue vehemently argues that the impugned additions have been rightly made in the assessee’s hands. It could hardly rebut the clinching fact that even the lower authorities are themselves fair in the former assessment year in treating the assessee as a mere accommodation entry provider, thereby assessing it @ 1% G.P. only. This tribunal is of the considered view that once the assessee is held as accommodation entry provider, the necessary consequence is that very factual position will continue in the impugned latter assessment year as well. Faced with this situation, I uphold the learned lower authorities’ action to the extent that the impugned accommodation entries are to be assessed @ 1% only in assessment year 2013-14 and reject the assessee’s instant appeal and partly allow the latter appeal hrein in very terms. It is made clear that so far as the assessee’s latter assessment year 2016-17, is concerned I have confirmed the impugned addition of Rs. 27,00,000/- at Rs. 27,000/- only.
Necessary computation shall follow as per law. is partly allowed in above terms. A copy of this common order be placed in respective case files.
Order pronounced in open court on 19.12.2024.