DCIT, NEW DELHI vs. SMT. MANJU GUPTA, NEW DELHI

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ITA 1505/DEL/2014Status: DisposedITAT Delhi02 March 2017AY 2008-0094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the protective addition in the assessee's hands could not be deleted prematurely. The matter was remanded to the CIT(A) to first ascertain if the substantive addition in the husband's hands had reached finality.

What were the facts?

During a search, it was found that the assessee's proprietary concern provided accommodation entries. The Assessing Officer made a protective addition of commission income in the assessee's hands and a substantive addition in her husband's hands.

What were the issues?

Whether a protective addition can be deleted before the substantive addition reaches finality. The finality of the substantive addition in the hands of a related party.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI

Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI

Hearing: 25/01/2017Pronounced: 02/03/2017

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed revenue against the order of the ld CIT(A)-XXXII, New Delhi dated 16.12.2013 for the Assessment Year 2008-09. 2. The revenue has raised the following grounds of appeal:- “1. That the Commissioner of Income Tax (appeals) erred in law and on facts of the case in deleting the commission income earned by providing accommodation entries on the entirety.

2. The decision of CIT(A) is based on her order dated 11.12.2013 in appeal No. 376/13-14 in the case of Shri Rakesh Gupta which has been contested by the Department and has not attained finality.

3. (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts.”

3. Ground No. 1 and 2 of the appeal of the revenue are against the deletion of the commission income earned by providing accommodation entries in the hands of the appellant, which was made by the Ld. assessing officer on protective basis.

Page 2 of 4 4. The brief facts of the case are the investigation wing on 26.04.2010 in case of Shri Vishesh Gupta and Shri Rakesh Gupta Group conducted that search u/s 132 of the Act. The business premises of the assessee were also covered in search. During the search, it was found that these persons are engaged in the business of providing accommodation entries through bogus purchase base from the firms owned and controlled by them. This fact was admitted by Shri Vishesh Gupta and Rakesh Gupta in their statement recorded during the course of search, post search proceedings and during the assessment proceedings. The assessee Smt Manju Gupta who is proprietor of M/s. Shri Gobardhan International also provided accommodation entry to two different beneficiaries. The ld Assessing Officer discussed modus operandi of the parties. During the course of assessment proceedings, it was submitted by the assessee that this proprietary concern is managed and controlled by Shri Rakesh Gupta. The affidavit also showed that all commission income based on the turnover of the accommodation entries were owned by Shri Rakesh Gupta. In view of this the ld Assessing Officer determined the accommodation entries amounting to Rs. 143790815/- and calculated commission thereon @5.67% in the hands of the assessee on protective basis and in the hands of Shri Rakesh Gupta on sustentative basis. Consequently on return of income filed u/s 153A of the Act of Rs. 170690/- the ld Assessing Officer added the accommodation entry commission of Rs. 7433985/- in the hands of the assessee and determined the net taxable income of Rs. 7604675/- vide order dated 28.03.2013 passed u/s 153A of the Income Tax Act. aggrieved by the order of the ld Assessing Officer the assessee preferred an appeal before the ld CIT(A), the above addition was deleted holding as under:- “5. I have considered the facts of the case and the submission of the appellant. The issue of substantive addition on account of commission income from providing accommodation entries in the hands of the appellant’s husband Sh. Rakesh Gupta was before me. Vide my order dated 11.12.2013 in Appeal No. 378/13-14 for Assessment Year 2008-09 in the case of Sh. Rakesh Gupta I have directed the Assessing Officer to calculate the commission income at the rate of 2% on the amount of total accommodation entries provided by the appellant to the various parties

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